by Ednal Palmer
Solomon Islands remains one of the countries in the world with the most expensive electricity – almost a dollar per kilowatt.
Since the amendment of the Electricity Act of 1969 in 2023, which aimed at improving coverage and cheaper electricity, the United Kingdom (UK) Government has stepped in to support the Solomon Islands in achieving that.
British High Commissioner to Solomon Islands Paul Robert Turner told the media this week that they have been working with the Solomon Islands government to help set up an independent regulatory body.
“It is important that there’s an independent regulatory body to allow for more independent power providers (IPP) to come into the country,” Turner stated.
He said an independent regulatory body can help oversee and facilitate a variety of energy choices.
The British High Commissioner said 90 percent of the Solomon Islands’ energy is from diesel, which he said is not sustainable in the long run.
“Solomon Islands have a difficult geography, and off grid is the best option here. But off-grid has to be a range of energy choices, including solar, so we have to get a regulatory framework in place to allow for more IPPs.
He added that the regulatory piece of work is expected to be completed in the coming months.
“This is very specific and technical work, but we have a lot of experience on this. I am meeting with consultants in the next few weeks, and we will need to have an agreement with the government – political will in the end.”
Mr Turner added that they are doing the best they could with the Solomon Islands to broaden the energy market here.
“The answer for the Solomon Islands isn’t a grid system, the answer is off grid.”
The Solomon Islands experiences high energy costs primarily due to its reliance on expensive diesel fuel to generate almost all of its electricity, combined with the geographic challenge of distributing power across a large archipelago of islands, leading to high transportation costs and a lack of competition in the market.
High energy costs are fatal to economic growth as businesses struggle to survive and thrive in such an environment.It also impacts quality of life, particularly in the healthcare and education sectors.
The Government for National Unity and Transformation (GNUT) has said its goal is to reduce electricity tariffs by 25 percent over the next three years.
Prime Minister Jeremiah Manele agreed during last year’s National Energy Summit that the lack of reliable and affordable energy is more than just an inconvenience – it is a significant barrier to development, education, healthcare, and economic growth.
The Permanent Secretary of the Ministry of Mines, Energy and Rural Electrification (MMERE), Dr. Christopher Vehe, during that event, acknowledged the difficulty in reducing tariffs due to the current monopoly held by the Solomon Islands Electricity Authority (SIEA).
Chamber of Commerce said many small and medium enterprises (SMEs) have been forced to close because they couldn’t afford to pay for electricity..
Some commentators said not all the blame should be placed on Solomon Power, as external factors such as fuel prices on the international market significantly impact local energy costs, with fuel accounting for over 50% of Solomon Power’s total expenses.
GNUT’s key targets include a 50% increase in grid connectivity by 2030 and a 10% increase in rural household connectivity by 2030 and implement measures to reduce fuel costs by 5% annually from 2023.