DOE redirects $365 million from Puerto Rico's solar projects to oil-dependent power grid

Fast Company

22-05-2025

The U.S. Department of Energy announced Wednesday that $365 million originally slated for solar projects in Puerto Rico will be diverted to improve the island's crumbling power grid, sparking an outcry just days before the Atlantic hurricane season starts.
The funds had been in limbo in recent weeks, with the Department of Energy missing a recent deadline to finalize contracts worth $365 million that would see battery-operated solar systems installed at health clinics and public housing units in Puerto Rico.
The money had been set aside for that purpose under the administration of former U.S. President Joe Biden.
'That money was spring loaded to flow now,' said Javier Rúa Jovet, public policy director for Puerto Rico's Solar and Energy Storage Association.
He and others criticized the move.
'This is shameful,' Democratic New York Rep. Nydia Velázquez wrote on X, noting that the funds were meant to serve the most vulnerable.
'Republicans have turned their backs on those who need it most, just 1 week before the start of hurricane season,' she wrote.
Grantees that include the nonprofit Hispanic Federation had said the funds were urgently needed to provide stable power to people including those on dialysis as major outages continue to hit Puerto Rico.
'Pretending that reallocating these funds will make any immediate difference on the stability of the electric grid, when the grid already has an $18 billion allocation, is just a way to distract from the real consequences of their decision. Puerto Rico deserves better,' said Frankie Miranda, the federation's CEO and president.
The Department of Energy said in a statement that the money would now be used 'to support technologies that improve system flexibility and response, power flow and control, component strength, supply security, and safety.'
A spokesperson for the Department of Energy told The Associated Press that the money would used for things including upgrading aging infrastructure, clearing vegetation from transmission lines and dispatching baseload generation units. The department said it has final authority over how the funds will be used, adding that the solar projects were not scheduled to be constructed until 2026.
U.S. Energy Secretary Chris Wright said in a statement that redirecting the funds would ensure that 'taxpayer dollars are used to strengthen access to affordable, reliable and secure power, benefiting more citizens as quickly as possible.'
Meanwhile, Puerto Rico Gov. Jenniffer González praised the move in a statement, saying it would help all 3.2 million residents on the island instead of 'a few customers.'
'Puerto Rico is facing an energy emergency that requires we act now and deliver immediate solutions. Our communities, businesses, and healthcare facilities cannot afford to wait years, nor can we rely on piecemeal approaches with limited results,' she said.
González previously came under fire as her support for investing $1 billion of federal funds in solar projects across Puerto Rico appeared to fade.
A spokeswoman for the governor did not immediately respond to a request for additional comment and details.
A spokeswoman for Josué Colón, the island's so-called energy czar, did not immediately respond to a request for comment.
Dwindling power generation
Rúa Jovet noted that there are currently at least $16 billion in unspent funds from the U.S. Federal Emergency Management Agency meant to improve Puerto Rico's electric grid, adding that the $365 million should be used for its original purpose.
'There is nothing faster and better than solar batteries,' he said. 'We should all be moving as fast as we can on generation.'
Officials in Puerto Rico already have warned that there will be a shortage of generation this summer. In addition, the Atlantic hurricane season starts June 1, and it is predicted to be above average, with nine anticipated hurricanes, four of them major.
Many in Puerto Rico worry that any storm, regardless of how small, could knock out the grid given its fragile state.
Puerto Rico already was hit with island-wide blackouts on Dec. 31 and April 16.
The diversion of funds come as González criticizes the work of Luma Energy, which oversees transmission and distribution of power on the island, and Genera PR, which oversees generation.
The two private companies were contracted by the previous administration as Puerto Rico's Electric Power Authority struggled to restructure more than $9 billion in public debt, with mediation still stalled.
'Elections have consequences'
Under Biden, there was a push for more renewable energy projects in Puerto Rico, where crews are still rebuild the power grid after Hurricane Maria hit in September 2017 as a powerful Category 4 storm. But the grid was already weak before the storm hit given a lack of maintenance and investment for decades.
Rúa Jovet said the Department of Energy's decision is an ideological one supported by the administration of U.S. President Donald Trump.
Of the $1 billion allocated for solar projects in Puerto Rico under Biden, $450 million already has been granted to install solar rooftop and batteries in thousands of homes located in rural areas or whose occupants have medical needs.
Overall, roughly 117,000 homes and businesses on the island currently have solar rooftops.