Jamaica is lagging behind in the uptake of electric vehicles (EVs) when compared to other countries in the Caribbean island, but a government consultant has signalled that the country will be taking over the lead in the region soon.
According to Valentine Fagan, electricity-generation consultant at the Office of Utilities Regulation, Barbados is currently leading, with over 400 registered EVs and is one of the largest users of EVs on a per capita basis. The Cayman Islands, which is also among the four runners in the Caribbean, have registered over 160 EVs in 2019.
“But based on the data we have received from Tax Administration Jamaica in 2018, only 10 EVs were registered, and so we are really lagging behind,” he stated.
However, Fagan said, “The situation is not lost as Jamaica is one of the leaders in renewable energy deployment, so we intend to take that lead position in terms of EVs adoption.”
The electricity consultant, who heads the OUR working group that was responsible for the research and development of a consultation document entitled “Proposals for a Regulatory Framework to Facilitate the Penetration of Electric Vehicles” was speaking at a virtual webinar hosted by the OUR yesterday.
Based on research, Fagan said that one of the main barriers to EV ownership is the cost as it requires 30 per cent more than internal combustion engine (ICE) vehicles.
“We cannot derive the benefits unless we have the vehicles, so to ensure that the vehicles are coming at least on parity with the conventional vehicles, there needs to be a consideration of fiscal incentives to offset the price differential to acquire an EV as against an ICE,” he said.
Noting that government incentives in many countries have played a key role in the proliferation of EVs in the transportation mix, he shared that the OUR has recommended in its proposal that Government play a critical role in facilitating a large penetration of EVs, and one of the ways to do this is to provide fiscal and non-fiscal incentives.
Among the incentives recommended are a reduction of the import duties and other compulsory payments, reduction of the General Consumption Tax and Special Consumption Tax, tax credits to operate EVs, and the provision of government grants to assist with EV purchase.
Other factors affecting ownership of EVs in the country, Fagan said, are concerns about the availability of charging ports, regulatory policies, and the lack of consumer information.
In this regard, he said that the OUR has also recommended that Government provide enabling regulations and policies and establish environmental mandates and targets for EV penetration levels.
But a key area that will have to be addressed in the regulatory framework, he noted, is the issue surrounding EV charging as a framework is needed to determine whether EVs charging will be considered as a supply of electricity, who can participate in EVs charging, how the utility company will recover its investment cost, and if third parties are allowed to participate in the pricing arrangements.
However, Fagan said that given that the JPS holds the exclusive licence to supply electricity, the OUR has proposed that the Government negotiate with the light company to facilitate an amendment to the licence that would exclude EV charging from an activity that would be classified as “supply” of electricity.
“This would certainly open, in an amicable way, the market,” he added.
Further, he said that if activities at the charging stations are exempted and the participation of non-utility companies is permitted, it is suggested that Government develop policy for the entry of non-utility companies, standards for charging stations, policy for interactions between utilities and non-utilities, standards for EV charging, and a policy to ensure the integrity of the electricity grid.
At the same time, Fagan, while noting that those measures may not be readily implemented to increase the wide-scale build-out of the country’s EV market, said that the OUR has proposed short-term measures that include procurement of EVs for the government ministries, departments, and agencies, installation of free charging ports in public places by Government, and encouraging the private sector to install charging ports by offering them incentives such as tax breaks.
In the meantime, the consultant has stressed the need for Jamaica to quickly get on board with the EV transition.
He noted that the majority of car manufacturers globally have announced that they will be moving away from making ICE vehicles to EVs.
“In fact, the United Kingdom has indicated that by 2030, they will stop the sales of ICEs and this will have a tremendous impact on the local market,” he warned.