There is uncertainty as to whether developers will meet the deadline
Puerto Rico’s Energy Czar, Josué Colón, acknowledged Friday that he does not know how many renewable energy developers will be able to start construction by July 4, the cutoff for preserving eligibility for the federal Investment Tax Credit (ITC).
The deadline triggered an intense, last-minute push across the island’s energy sector.
“That is up to the companies now. We fulfilled our job of approving all 22 projects,” Colón told Caribbean Business during an aside at the swearing-in ceremony for a new Chamber of Commerce president.
Colón’s admission follows a government sprint to finalize contracts under an accelerated process created by Executive Order 2025‑047. The order declared an energy emergency and directed PREPA and the Puerto Rico Energy Bureau (PREB) to fast-track solar and storage projects that could qualify for ITCs. It stressed the need to “evaluate, negotiate and approve with the greatest diligence” projects capable of meeting federal deadlines, noting that the credits are essential to financing new generation.
Yet even after the emergency push, officials still cannot say how many developers will satisfy the July 4 construction-start requirement or the separate December 31, 2027 placed-in-service deadline.
The uncertainty intensified after a Washington, D.C., federal judge reinstated the longstanding “Five Percent Test” on June 6, ruling that the Treasury Department had failed to justify eliminating the rule. The decision restored a clearer way for developers to show they began construction: spending at least 5% of total project costs. That route is generally simpler than relying on the more subjective “physical work of a significant nature” standard.
Still, some industry experts told this publication that the approvals may have arrived too late to materially change Puerto Rico’s position.
The court ruling coincided with Puerto Rico’s own eleventh-hour approvals. On June 30, just four days before the federal deadline, the Financial Oversight and Management Board (FOMB) approved PREPA’s PPOA with CK1, LLC, a 25‑MW solar project in Juana Díaz, under the accelerated review process. The Board marked the agreement as “Approved with Observations,” while noting that CK1’s pricing — a first-year base rate of $121/MWh with no escalator — compared favorably with earlier procurement rounds and with other projects reviewed under the emergency process.
On July 3, one day before the cutoff, the FOMB approved PREPA’s Coquí Power Portfolio, an eleven-project solar package negotiated through the same accelerated process. The portfolio includes Aguirre Solar Farm, LLC; Caracol Solar Farm, LLC; Esmeralda Solar Farm, LLC; Santa Isabel Solar Farm, LLC; Guayama Solar Farm, LLC; Juana Díaz Solar Farm, LLC; La Tuna Solar Farm, LLC; Naguabo Solar Farm, LLC; Sabana Grande Solar Farm, LLC; Salinas Solar Farm, LLC; and Sierra Solar Farm, LLC.
But the Oversight Board also cautioned that interconnection studies remain incomplete, and that LUMA “cannot certify available interconnection capacity” until those studies are finished. Because the studies are a condition precedent to closing, delays could threaten compliance with both the July 4 construction-start deadline and the December 31, 2027 placed-in-service deadline. The contracts also allow developers to terminate without penalty if interconnection costs exceed $20 million, adding another layer of uncertainty.
The result is a high-stakes race in which Puerto Rico’s effort to preserve federal incentives has collided with incomplete interconnection work, elevated pricing concerns and approvals issued within days — and in some cases hours — of the federal deadline.
The companies did not answer requests for comment.
