NASSAU, BAHAMAS- With renewables accounting for just 2.5 percent of The Bahamas’ energy capacity despite steady solar growth since 2015, the draft National Energy Policy 2025–2030 proposes tax incentives for households and businesses to accelerate investment in cleaner technologies and reduce reliance on fossil fuels.
The government has released a draft of its National Energy Policy 2025–2030 for consultation, which outlines a renewed vision for transitioning to a more secure, affordable, and environmentally sustainable energy future. The policy aims to revise the Bahamas National Energy Policy 2013–2033 and sets out the Government’s strategic goals for the energy sector for the next five years. It seeks to inform stakeholders, including service licensees and the public, of the Government’s long-term direction for the sector.
The energy sector is now governed by two core legislative instruments: the Electricity Act, 2024, and the Natural Gas Act, 2024, both of which came into force on June 1, 2024. The Electricity Act establishes a comprehensive regulatory framework for the generation, transmission, distribution, and supply of electricity, while the Natural Gas Act regulates the importation, regasification, storage, transportation, and retail of natural gas. Both Acts are designed to ensure the provision of safe, reliable, least-cost, and environmentally sustainable energy.
The Utilities Regulation and Competition Authority (URCA) is empowered under these Acts to issue regulations that carry the force of law. To date, URCA has issued several regulations relevant to the natural gas sector, including safety standards and operational guidelines. The National Energy Policy itself is grounded in Section 5 of the Electricity Act, thereby forming part of the overarching legal and regulatory framework.
“Recognizing the very significant role of the Energy Sector to national growth and development, the Government has established the Department of Energy to bring focused attention to matters concerning the Energy Sector in The Bahamas,” the draft policy notes. Although URCA retains jurisdiction as the primary regulator, the Department of Energy has been tasked with leading key initiatives. The Department will coordinate with the Ministry of Energy and Transport, URCA, and other agencies to implement the National Energy Policy.
The Department’s responsibilities include revising the policy in consultation with the Minister and URCA, promoting renewable energy initiatives like waste-to-energy (WTE) and ocean thermal energy conversion (OTEC), and spearheading programs such as the National Energy Audit and Retrofit Program. This initiative is designed to help small businesses and low-income households reduce energy consumption. The Department is also responsible for managing relationships with Bahamas Power and Light (BPL), the natural gas and oil industries, collecting and reporting statistical data, and leading public education campaigns.
“The Government recognizes that there are certain roles and functions of the newly established Department of Energy that may overlap and intersect with other relevant Energy Sector agencies. The Government considers it important to emphasize for the avoidance of doubt that the roles and functions of the Department of Energy do not derogate from URCA’s regulatory jurisdiction or the roles and functions of any other relevant Energy Sector agencies,” the draft policy noted.
While renewable energy sources like solar power are gradually increasing in The Bahamas, their overall impact remains limited. Since the 2015 passage of the original Electricity Act, the installation of photovoltaic (PV) panels has steadily grown, but still only accounts for roughly 2.5 percent of the country’s total generation capacity. The fuel mix continues to be dominated by imported fossil fuels. The policy, however, reaffirms the Government’s commitment to cleaner alternatives and energy independence.
To reduce emissions and bolster energy security, the Government is also promoting natural gas as a cleaner and more affordable alternative to heavy and light fuel oil. Natural gas is expected to be commercially available in The Bahamas by 2025 and is seen as essential to the country’s energy transition.
The bulk of electricity in The Bahamas is generated by BPL and Grand Bahama Power Company (GBPC), who together consume nearly all the imported heavy fuel oil. The latest data shows that BPL now uses 30 percent heavy fuel oil, 60 percent light fuel oil, and 10 percent propane. GBPC uses 85 percent heavy fuel oil and 15 percent light fuel oil.
As of the most recent figures, approximately 12,000 kW of privately installed PV capacity exists in the country, 80 percent of which is in commercial settings. About 90 percent of all PV systems are installed on New Providence. Utility-scale PV capacity stands at about 14,000 kW, and around 47,300 kWh of battery energy storage systems have been deployed.
Electricity transmission and distribution remain mostly overhead with significant system losses, ranging between 15 percent and 20 percent. The Electricity Act, 2024 introduces new licensing frameworks, including the Transmission and Distribution Licence and the System Operator Licence, aimed at improving operational efficiency and reliability.
Currently, there are around 135,000 active electricity accounts in The Bahamas, covering about 40 percent of the population. Of these, BPL holds 115,000 accounts and GBPC 20,000, with the majority being residential. Annual electricity consumption is approximately 2 billion kWh, with BPL customers accounting for 86 percent of that demand.
To stimulate investment in renewable energy, the Government proposes a series of tax incentives. “The Government will adopt the following strategies to achieve this policy objective: provide tax credits or rebates for businesses and households that invest in renewable energy systems; create a green investment fund; offer incentives for R&D; reduce investor financial risk; and regularly review incentives to keep pace with technological changes,” the policy states.
