Powering a Unified Caribbean: Charting the Path to 100% Renewable Energy
Insights from RMI's Caribbean Regional Transition Scenario report show how adoption of renewables can unlock energy independence and long-term prosperity by 2035.
With its abundant natural resources — from sunshine, to wind, to geothermal and hydro — the Caribbean is well positioned to lead one of the world’s most meaningful clean energy transformations.
Traditionally, fossil fuel imports, and the dependence and high prices that come with them, have been the go-to energy solution for these islands. Now with advancements in new renewable energy technologies and the adoption of forward-thinking policies, Caribbean communities are breaking away from their reliance on aging, inefficient, and unaffordable diesel-based energy infrastructure.
Despite this progress, without ambitious climate and energy targets, Caribbean countries risk locking in outdated systems that perpetuate high costs, vulnerability to changing fuel prices, and increased exposure to climate impacts. Put simply, the choice is between continued fossil fuel dependency and clean energy independence.
Operating at 100 percent renewables by 2035 is both technically possible and financially advantageous for the Caribbean, according to RMI’s breakthrough A Caribbean Regional Transition Scenario report. Analysis showed that natural and abundant resources, such as sun and wind, are more economically cost-effective in a region that routinely pays twice or even three times the average mainland price for imported fuel. Wind and solar also offer lower long-term costs, greater energy security, and enhanced resilience compared to continued dependence on imported fossil fuels.
The time for an energy revolution in the Caribbean is now. As countries convene for COP30 in Brazil, the Caribbean represents an opportunity to show how an entire region can live up to the ambitions of the Dubai Energy Package, where parties agreed to transition away from fossil fuels and triple renewable energy capacity at COP28. The Caribbean’s progress can serve as a powerful example of how regional collaboration and decisive action can accelerate the global clean energy transition.
“The urgency of this transition cannot be overstated. It is not just about mitigating climate change; it is about building a more resilient and prosperous Caribbean. It is about empowering our communities, fostering innovation, and creating a brighter future for generations to come. The [Caribbean Regional Transition Scenario] report serves as a call to action, urging us to embrace the transformative power of renewable energy and work together to build a sustainable and thriving Caribbean.”
Transition pathways and energy options
The Caribbean’s historic reliance on diesel (or LFO – light fuel oil) for electricity generation is in large part due to its ease in transporting, storing, and deploying the fuel through adaptable generator technology. This dependence, although convenient for delivery to islands compared to other fossil fuels, comes at a high cost and creates economic and energy security challenges across the region.
Two facts drive the search for alternatives: 1) LFO is already one of the most expensive power generation options available; 2) those fuel prices are expected to not only rise in the long term, but remain vulnerable to geopolitical shocks. This leaves island nations with a choice: invest in alternative energy options that are both sustainable and more affordable, or remain trapped in a volatile global oil market that threatens economic stability and energy security.
Our analysis explores what an accelerated, phased transition to renewable energy could look like from an energy economics perspective across the region’s most common power sources. The report compares five options — light fuel oil, natural gas, solar PV with storage, onshore wind with storage, and geothermal with storage — to identify a least-cost transition pathway that strengthens resilience and reduces exposure to geopolitical and market volatility. The analysis considered fuel, construction, and operating costs, along with expenses for transporting and delivering fuel. Using these factors, we estimated the total investment needed over 25 years (2025–2050), as shown in Exhibit 1.
Exhibit 1
All three renewable options — solar and BESS, onshore wind and BESS, and geothermal — become significantly cheaper through 2050 and offer lower lifetime costs than both LFO and natural gas as soon as 2027. While liquified natural gas (LNG) is often viewed as a short-term bridge away from LFO, the findings show it cannot compete economically with renewables, even when factoring in storage for grid stability.
Even with the clear economic advantage of renewables, reaching 100 percent renewable energy by 2035 will require balancing economic potential with technical and political realities. Progress depends on stronger regulatory frameworks, major grid upgrades, and expanded battery storage — all of which demand time and heavy up-front investment. As this report also shows, reaching renewable energy goals will require islands to follow multiple pathways at once, combining rooftop solar, community microgrids, and utility-scale projects like solar and wind farms, while expanding independent power producers and tapping geothermal resources where possible. By blending centralized and decentralized solutions, Caribbean nations can make the most of their renewable potential.
A phased approach is therefore the most practical path forward, recognizing the region’s infrastructure and policy challenges.
Two phases of a just energy transition in the Caribbean
The Caribbean Regional Transition Scenario report outlines two phases for a successful transition: 1) Early adoption for long-term cost-effectiveness (2025-2030); and 2) Maintaining momentum toward net zero goals (2030-2035).
This first phase of the transition offers a chance to cut costs while building momentum toward a resilient, renewable future. The analysis considered a 50 percent transition and 100 percent transition to alternative energy sources by 2030 and 2035, respectively. It shows that reaching approximately 50 percent renewable power generation by 2030 is both practical and financially smart, with solar PV emerging as the most cost-effective path forward. Though solar requires a higher upfront investment, it delivers long-term savings, reduces exposure to fuel price swings, and strengthens energy independence for local communities.
However, Caribbean islands grapple with aging grids, limited storage capacity, and complex regulatory processes that slow the integration of new renewable projects. Barbados has seen backlogs of solar interconnections due to the challenge of modernizing its grid fast enough to keep up with growing clean energy demand. Unlocking the benefits of a renewable energy transition within the next five years will require targeted investment in battery storage and grid upgrades, streamlined regulations to attract private investors, and closer collaboration among governments, utilities, and communities.
The second phase focuses on moving from a 50 percent renewable energy transition to a full 100 percent shift in energy systems. This would require local governments to demonstrate strong leadership through renewable-friendly policies and implementation plans, as they must address the technical, regulatory, workforce capacity, and institutional challenges that may occur. Regional collaboration and knowledge sharing between countries would help island nations scale and mobilize investments for projects, and a strong renewable network would encourage other countries to follow suit.
As seen in both proposed phases, increased investment in battery storage systems and grid infrastructure would be essential in maintaining momentum for the energy transition. Utility companies must keep pace with these investments and adjust their operational and business models to become grid operators and service providers. Innovative technologies, such as those that allow digital grid management, must be adopted to accommodate distributed energy integration and a more complex and diverse energy grid. Decentralized solutions, such as rooftop solar PV and battery energy storage, can be utilized to reduce the burden on land resources.
This two-phased approach to the Caribbean’s energy transition depends on creating the right conditions for projects to succeed. Many renewable initiatives stall early because of limited funding and technical expertise. Expanding support for project development, including feasibility studies, environmental reviews, and grid assessments, can help turn these ideas into bankable investments and lay the technical and regulatory groundwork for future investments. Regional partners and development organizations play a key role in building local capacity and helping projects move forward. Public awareness, community involvement, and job training are equally important to ensure the transition is fair, inclusive, and lasting, so that everyone benefits from a cleaner and more resilient energy future.
Resilience is key
To achieve a successful transition, energy infrastructure must be built to last. Islands are uniquely vulnerable to environmental changes and geopolitical shocks, and resiliency must be a forethought when constructing transition models based on local needs.
Resilience should be considered at both the systems and infrastructural levels. Systems-level resilience is the ability of a society, economy, and environment to withstand and recover from disruptions while continuing to function. Infrastructural resilience focuses more specifically on the strength and reliability of physical infrastructure like power plants, transmission lines, and storage systems. They are connected, as strong infrastructure supports reliable systems, and resilient systems depend on well-coordinated technical, institutional, and social foundations.
Designing energy systems that are local, flexible, and spread across multiple sites makes islands more resilient to disruptions. Distributed energy resources, as noted above, reduce dependency on large, centralized grids that are more vulnerable to storms or outages. At the same time, renewable infrastructure should be built to withstand extreme weather by using stronger materials and design standards suited for hurricanes, as noted in more detail in RMI’s recent report, Solar Under Storm III. These considerations can protect critical services during disasters while keeping energy systems affordable over the long term.
“A successful transition ensures that energy is no longer a barrier to opportunity but a gateway to empowerment. It promises equitable access to affordable, clean energy; jobs in emerging industries; and resilience to the climate crises that threaten the region’s very existence.”
A new chapter for the Caribbean
The path forward for the Caribbean will rely on reducing dependence on imported fossil fuels, modernizing outdated infrastructure, reskilling the workforce, and investing in renewable-based technologies. A Caribbean Regional Transition Scenario shows how the technologies of solar, wind, geothermal, and battery storage not only outcompete LFO and LNG but are already reshaping how energy is produced and shared across the islands.
The coming decade will determine how the region captures that opportunity. By combining strong leadership and collaboration, Caribbean nations can build energy systems ready for the future ahead. A 100 percent energy transition by 2035 is both achievable and affordable, and the actions taken today will determine the region’s long-term resilience and prosperity.
