Energy

Transformation Is Creating Opportunity

Puerto Rico’s energy transformation is creating opportunity by providing expertise, technology, and critical services to the local market.

100%
Island’s goal to source all electricity from renewable sources by the year 2050
$10.5B
in federal funds have been designated for energy grid enhancements
100%
exemption from excise and sales tax on Green or High Efficiency Energy products
Energy Sector in Puerto Rico

Energy Infrastructure in Complete Reconstruction

  • The federal government has allocated over $77 billion for infrastructure reconstruction after the passing of Hurricane María over Puerto Rico in 2017. The investment is designated for infrastructure repairs, especially projects related to energy, telecommunications, and transportation.
  • These funds, a combination of FEMA, HUD/CDBG-DR, CARES Act, and American Rescue Plan Act, have supported hundreds of projects to renovate, improve, and strengthen Puerto Rico’s energy grid.
  • Federal funds also ensure access to clean energy options, improving resiliency, carbon footprint reduction, and increased self-sufficiency for residences and commercial enterprises.

Local Development Energy

  • Puerto Rico is embracing the renewable energy revolution. The Puerto Rico Energy Policy Act of 2019 (Act 17) requires Puerto Rico to source 40% of its electricity from renewable sources by 2025, 60% by 2040, and 100% by 2050. Additionally, the law opened the local marketplace to energy producers and servicers.
  • As energy activities decentralize, the Puerto Rico Energy Bureau is working to ensure a regulatory landscape that provides the flexibility to produce, sell, distribute, and monitor energy use across all sectors and sizes of users or developers.
  • In June 2021, LUMA Energy assumed the operation and maintenance of power transmission and distribution across the island. They are currently training linemen and undergoing a comprehensive grid study to enable more integration of renewables and distributed energy resources.
  • Manufacturing operations with heavy energy needs make up almost 50% of the local economy. As such, the private sector is making great strides in energy innovation. For example, Combined Heat and Power (CHP) and renewable fuels are taking center stage for industrial users.

Competitive Landscape for Growth

+ Puerto Rico has the talent you need to be successful. 60% of college graduates hold a STEM degree, so there is an abundance of talent ranging from software developers to civil & industrial engineers to support you.

+ Industry associations, like the Renewable Energy Contractors Association (ACONER in Spanish) and the Solar Energy and Storage Association (SESA), can help you connect with developers, technology partners, and project opportunities. There are also growing tech and entrepreneurship communities to help startups & multinationals establish successful operations in Puerto Rico.

+ Incentives support wide ranging energy-related activities:

  • Green energy production
  • Manufacturing and assembly of energy equipment
  • Development of energy-related software
  • Export of energy-related services from Puerto Rico to the world

Tax Incentives

Puerto Rico offers a unique package of smart tax incentives designed to help your operation grow, innovate, take risks, and hire talent.
  • 4% fixed income tax rate on eligible income
  • 100% tax exemption on capital gains and distribution of dividends
  • 75% exemption on property tax
  • 75% exemption on municipal construction rate
  • 50% exemption on municipal license tax
  • 100% exemption from State Excise and Sales & Use Taxes on certified green energy equipment
  • 15-year standard tax exemption grant period, eligible for 15-year renewal
  • Up to 50% tax credit on R&D expenditures

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Samuel Talman

Sam Talman

Business Development Manager
+1 (865) 964-9957
stalman@investpr.org