Polaris Wins Approval for 71.4 MW Battery Project in Puerto Rico
Residents have been worried about the stability of Puerto Rico’s power grid for years, as have local officials. A major milestone was made by Polaris Renewable Energy Inc. on May 12, 2026 — a step that marked a new era of energy resilience for the island… Once approved by the FOMB, Puerto Rico’s Battery Energy Storage System (BESS) Standard Offer Agreement (SO1 Agreement) will be officially implemented.
The approval represents the last stage in a challenging three-step regulatory process. Having already received approvals from the Puerto Rico Energy Bureau (PREB) plus one from the Governing Board of Puerto Rico Electric Power Authority (PREPA), all systems are go for one of the island’s most important network upgrades in energy infrastructure history.
Have you ever heard of the SO1 Agreement, and what are the important things about it?
The SO1 Agreement is essentially a contract between the Puerto Rico Electric Power Authority (PREPA) and Polaris Power US, Inc (PPUS), a subsidiary of Polaris Renewable Energy. It is a cornerstone of the Puerto Rico Accelerated Storage Addition Program (ASAP).
Why should the average resident care about an acronym? “ASAP,” for example. Basically, the program is all about bolstering the reliability of the power on the island. Utility-scale battery storage installed at existing plants can smooth the variability of power generation, reducing the risk of blackouts. In this instance, the storage batteries will be co-located at Punta Lima Wind Farm, a wind farm site that is already owned and operated by Polaris through its subsidiary, Punta Lima Wind Farm, LLC.
How does the New Power Supply System work?
Aligned with the new framework, PPUS will undertake the position of “Resource Provider”. They’re the nuts and bolts — the guys who install it and run it day by day. After the project is commercialized, it will provide critical grid services like capacity and “grid support”. In return, PREPA will pay the company a monthly charge based on fixed and performance-based rates.
The scope of the project is vast. Under the agreement, total capacity is 71.4 MW (two units with 35.7 MW each). For context, that amount of energy storage can serve as an enormous cushion for the wind being produced at Punta Lima, making sure that when demand is low, and the clean power from the wind would otherwise simply go to waste in the form of curtailment/pile up behind congested transmission lines, it can instead be discharged when it’s needed most.
Financial and Regulatory, How the Impacts are No Longer Just Financial
It is a long-term contract with a last 20 years from the start date of commercial operations of the project. Financially, the SCPP is $16,000 monthly MW.
A nice thing about it is that there is also an inherent incentive for the company to get federal Investment Tax Credits (ITCs). In the case that the project monitors capacity each month and is not eligible for these credits, the monthly payment could rise to $20,600 per MW. But the FOMB has tied these conditions, saying that the lower rate of $16,000 would remain if the firm does not obtain tax credits based on those specific sourcing decisions regarding “Foreign Entities of Concern” (FEOC).
This explains why Polaris is actively optimizing its procurement process to comply with all federal guidelines, which not only ensures cost effectiveness for the Puerto Rican citizens in a budget-conscious manner but also secures an organically sound financial picture of the project over time as well.
A Final Major Milestone Weeks Away from Energy Resiliency
“The FOMB’s approval represents the final major regulatory milestone for the SO1 Agreement and an important step toward the execution and development of our battery energy storage project in Puerto Rico. We are pleased to continue advancing this strategic initiative, which is expected to support grid reliability and resilience in Puerto Rico while further enhancing the long-term value of our Punta Lima asset.”
Marc Murnaghan, CEO of Polaris | Source: Polaris Renewable Energy
Polaris has been in the game of green energy transition for a while. As a junior Canadian firm whose share float is traded on the Toronto Stock Exchange (TSX), they maintain a balanced and diverse portfolio in Latin America and the Caribbean featuring geothermal, hydroelectric, solar, and wind projects. Currently, their portfolio consists of some 82 MW in geothermal energy, 39 MW in hydroelectricity, 35 MW in solar, and the now operating 26 MW wind park at Punta Lima.
What’s next for the project?
With the heavy lifting of regulatory hurdles behind us, construction and time frames take precedence. In the next month, Polaris is anticipating its updates to really go over both capital costs and a formal “Commercial Operation Date” for the project.
While Puerto Rico is still working through the nuances of its energy transition, projects like Punta Lima BESS show us what a grid that is not only powered by but stabilized by renewables can look like.
