In the wake of a sanctioned 7% electricity rate increase, Jamaican enterprises are facing intensified financial strain, prompting urgent calls from industry leaders to transition to solar energy solutions. Garnett Reid, President of the Small Business Association of Jamaica (SBAJ), has publicly advocated for this shift, citing the devastating economic aftermath of Category 5 Hurricane Melissa and the compounding pressure of rising operational costs.
The hurricane, which struck the island’s southwestern region on October 28, has precipitated a severe decline in sales, with reports indicating a 20-30% reduction in revenue for small and medium-sized businesses. Reid emphasized that this downturn, coupled with the newly approved utility hike, threatens the viability of numerous enterprises during the critical holiday season. ‘Many businesses will not experience a Merry Christmas,’ he stated. ‘They will either operate at a loss or barely break even.’
Electricity represents one of the most substantial input costs for Jamaican businesses, powering essential equipment from refrigeration and manufacturing machinery to computing systems. The increase, approved by the Office of Utilities Regulation (OUR), is attributed to JPS’s heightened reliance on costlier fuel alternatives after Hurricane Melissa disrupted natural gas supplies. The storm also caused an estimated 30% reduction in JPS’s sales, further driving up the fuel and Independent Power Producer (IPP) rates.
Reid expressed particular disappointment with the management of JPS and the perceived lack of transparency regarding a $150 million loan allocated to the utility for restoration efforts. He has called upon Energy Minister Daryl Vaz to provide clarity on the loan’s utilization, questioning whether it was intended to aid consumers directly.
To mitigate future vulnerability, the SBAJ president strongly recommends that businesses invest in solar power to achieve greater energy independence and cost predictability. Furthermore, Reid advocates for structural reform in Jamaica’s energy sector, urging the government not to renew the JPS contract under current terms and to encourage market competition to improve service quality and pricing.