If you read what many media pundits say, you might think that solar energy is to blame for Ontario’s skyrocketing energy costs. Despite these claims, don’t pinpoint the blame on solar as the main culprit for Ontario’s customer’s high monthly bills.
The Fraser Institute released a report last year which said Toronto electricity prices doubled the Canadian average between 2008 and 2016.
Prices increased 71 percent, compared to national average of 34 percent. Toronto electricity bills advanced on average $77.09 monthly while Ottawa consumers saw a $66.96 average monthly increase between 2010 to 2016.
The average national increase for electricity bills in Canadian cities was $37.68.
A Toronto ratepayer’s 2016 bill was $201, and $141.00 in Ottawa. Compared to consumers in other major Canadian metropolises who paid $141 monthly for electricity.
The attack on solar energy impacting Ontario’s electricity costs has been relentless by some media outlets. But do they have a point?
Ross McKitrick, a University of Guelph Professor and Independent energy analyst Tom Adams wrote a 2014 an op-ed in the National Post which suggested renewable energy was fleecing Ontario consumers. The authors said in 2013 solar and wind contributed to 20 percent of the commodity cost, while only producing only 4 percent of the total power.
Adams most recently wrote a 2016 op-ed for Inside Toronto where he said:
“Increased wind and solar capacity was the largest contributor to rising electricity prices in Ontario since 2008”.
Adams added that solar generators provide limited output value while receiving direct payments on average $0.48/kWh.
Despite the claims of the National Post, and “Independent” energy analysts like Tom Adams for blaming most of the increased electricity bills on renewables in the province is misleading.
There are many reasons why Ontario’s electricity bill has dramatically gone up.
First, inflation is inflation.
Don Dewees of the University of Toronto told TVO, inflation contributed to nearly 50 percent increase seen in residential rates between 2000 and 2010. Dewees also acknowledged while inflation has slowed down, it still contributed to 30 percent of the increase recently.
Meanwhile, Ontario Clean Air Alliance’s Jack Gibbons told TVO that the costs tied to Ontario’ nuclear power plants played a bigger factor in the rise of consumer costs. Gibbons said nuclear was the largest contributor compared to any other form of electricity generation in the increasing global adjustment (GA) costs.
GA is a monthly surcharge covering a variety of things, including closing coal fire and the Pickering power plants, to developing new electricity generation. Nuclear generation made up 42 percent of the GA cost; gas plants took up 26 percent, while renewables (solar, wind, and hydroelectricity) accounted for 17 percent.
University of York’s Mark Winfield also suggests that Ontario’s aging infrastructure was due for an upgrade. Winfield said the current provincial government had “no choice” but to invest in updating the provinces energy infrastructure as previous governments spent minimal money to support the current power system while creating new capacity.
“We were keeping prices artificially low, and we reached a point where those assets began to reach end-of-life and had to be replaced. And in some cases those capital costs proved to be much more than anticipated,” Winfield told TVO.
Improving Ontario’s energy system with renewables has been critical considering coal-fired power plants in the past have impacted the province with a whopping $4.4 billion in financial, health, and environmental costs.
While inflation, nuclear power generation costs, and updating infrastructure were factors in the rise of Ontario’s consumer electricity costs, solar’s part has been minimal.
As mentioned earlier, renewables only made up 17 percent of GA costs.
Meanwhile, Environmental Defense of Canada said the average Ontario homeowner, pays $9.00 a month for solar, which makes up 5 percent of their bill.
Wind, solar, and biogas combined only makeup 12 percent of the average Ontario consumer bill or $20.00/month.
As Environmental Defense’ Gillian McEachern told DeSmog Blog in 2014:
“As the new kid on the block, renewable energy is all too often blamed for rising electricity costs.”
“The truth is renewables play a relatively small role in Ontarians’ electricity bills today.”
Don’t blame solar for Ontario’s power woes, but rather a perfect storm of other issues (inflation, nuclear generation costs, and aging infrastructure) which came together at the same time.