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We explore the factors that affect the development of renewable energy in the Caribbean. The Caribbean region can serve as a laboratory in studying the institutional issues relating to energy development due to the differences in political jurisdictions over a short distance. Based on 12 case studies and 75 in-depth interviews with a variety of stakeholders, we identified five factors that appear to be critical for the development of renewable energy in the Caribbean: entrepreneurship attitudes, the role of local champions, the electric utility influence, informal institutions and the influence of international agencies.

We built a multiple regression model to test these relationships through a survey of 34 political jurisdictions in the Caribbean. The statistical analysis we conducted suggests that informal institutions have a significant impact on the extent of renewable energy development, while the incumbent electricity utilities …