Puerto Rico generates most of its electricity from fossil fuels, with natural gas and petroleum accounting for the vast majority of the island’s power. The grid relies heavily on fuel that must be shipped in by sea, making electricity expensive and vulnerable to disruption. A small but fast-growing share comes from rooftop solar, and the island has legally committed to reaching 100% renewable energy by 2050.
The Current Fuel Mix
Petroleum has historically dominated Puerto Rico’s electricity generation, supplying roughly 70% of the island’s power. Natural gas accounts for the next largest share, followed by coal in single digits and renewables making up a small fraction of grid-scale generation. That mix has been shifting toward natural gas in recent years as the island works to retire older oil-burning units and phase out coal entirely.
The largest power plant on the island is Costa Sur, a 766-megawatt natural gas facility on the southern coast. It runs on liquefied natural gas (LNG) that arrives by tanker ship and is converted back to gas at the EcoEléctrica terminal in Peñuelas. That terminal is currently seeking approval to double its truck-loading capacity to meet growing natural gas demand across the island. Other major plants include the Aguirre complex and Palo Seco, both of which have historically burned petroleum products.
Why the Grid Is So Fragile
Puerto Rico’s geography creates a fundamental problem for its power grid. Most of the large generating plants sit along the southern coast, but the heaviest electricity demand is in the San Juan metro area on the northern coast. Connecting the two requires transmission lines routed through mountainous terrain in the island’s interior, and those lines are difficult to access for maintenance and extremely vulnerable to hurricanes.
When Hurricane Maria struck in 2017, corroded anchor rods caused transmission towers to collapse across the mountain corridors. A Department of Energy investigation identified anchor rod corrosion as the root cause of many tower failures. Restoring power took months in some areas, and the experience exposed how dependent the entire northern half of the island was on a handful of long, fragile transmission paths from the south.
Energy planners have since recommended moving generation closer to where people actually live, building regionalized mini-grids, and creating pre-planned segmentation strategies so that if one part of the grid goes down, other sections can keep operating independently. The island’s backbone transmission system runs at 230 kilovolts, which is adequate for current needs. The vulnerability isn’t capacity. It’s geography and aging infrastructure.
Coal Is on Its Way Out
Puerto Rico’s only coal plant, the AES facility in Guayama, is scheduled to stop burning coal by 2027. The Puerto Rico Energy Public Policy Act (Act 17 of 2019) mandates a complete coal phase-out by that year. AES is currently evaluating whether to convert the plant to natural gas or incorporate renewable energy rather than shutting down entirely. Once coal generation ends, the island’s fossil fuel mix will consist almost entirely of natural gas and petroleum.
Rooftop Solar Is Booming
While grid-scale renewables still make up a small percentage of total generation, distributed solar on homes and businesses has exploded. By December 2024, approximately 145,715 homes and businesses were enrolled in net metering programs with a combined installed capacity exceeding 1,032 megawatts. That’s more than a threefold increase from roughly 40,000 residential installations in 2020.
What makes Puerto Rico’s solar boom unusual is how many systems include batteries. About 80% of new solar installations now incorporate battery storage, up from less than 60% in 2021. For many Puerto Ricans, adding a battery isn’t about saving money on electric bills. It’s insurance against the next blackout. After years of grid failures, residents and businesses have essentially started building their own backup power systems.
Renewable Energy Targets
Act 17 of 2019 set aggressive renewable energy milestones: 40% of electricity from renewables by 2025, 60% by 2040, and 100% by 2050. The law also calls for eliminating fossil fuel generation entirely by mid-century. Puerto Rico is nowhere near the 2025 target, though the rapid growth in rooftop solar is closing part of the gap outside the traditional utility framework.
Federal funding is playing a role in the transition. Congress approved $1 billion for the Department of Energy to improve grid resilience in Puerto Rico, and in late 2025, DOE announced the reallocation of $365 million specifically to address the island’s grid resiliency crisis and keep energy affordable. Additional formula grants of over $7.4 million have been directed toward grid modernization to reduce the impacts of extreme weather.
Why Electricity Costs So Much
Puerto Rico’s electricity rates are among the highest in the United States, and the fuel mix is the primary reason. Nearly everything the island burns to make electricity arrives on a ship. Petroleum and LNG prices fluctuate with global markets, and the added cost of marine transport pushes rates higher than in mainland states that can pipe in natural gas or mine coal domestically. The island’s aging, inefficient plants compound the problem by burning more fuel per unit of electricity than modern facilities would.
This cost pressure is part of what’s driving the rooftop solar surge. For many households, installing panels and a battery is cheaper over time than continuing to pay some of the highest electric rates in U.S. territory. It also provides something the central grid has repeatedly failed to deliver: reliable power when a storm hits.