Most small Caribbean countries, particularly the Eastern Caribbean States, depend almost entirely on petroleum to supply their electricity needs - with oil and gas expenditures taking between seven to 20 percent of a country's GDP.

Historically, most Caribbean islands have relied heavily on imported diesel and heavy fuel oil (HFO) to power massive generators. This "centralized" model is why electricity costs in the Caribbean are among the highest in the world, as the fuel must be shipped in and is subject to global price volatility. However, in 2026, the region is undergoing a massive transition toward renewable energy to improve resilience against hurricanes and reduce costs. Many islands, such as Barbados and Jamaica, have installed large-scale solar farms, while others like Saint Kitts and Nevis are exploring geothermal energy from their volcanic terrain. Some islands also utilize wind farms and biomass. Because the islands are isolated, they often use "Microgrids" combined with large-scale battery storage to ensure the lights stay on when a storm damages the main power lines. While the majority of the Caribbean still depends on traditional fossil fuel plants for "baseload" power, the shift toward a "Hybrid" model is accelerating, with many nations aiming for 100% renewable energy by 2030 to protect their fragile ecosystems and tourism-driven economies.