- Comments (40)
- Text Size: Down Up
moneysense.ca, 9/09/10
Steep Increases Forecast for Ontario Electricity Prices
If you are an Ontario resident and recently received your hydro bill, you may find that you are paying much more for electricity these days. First, staring July 1st, 2010, the Harmonized Sales Tax added an extra 8 percent to your electricity bill. Previously, the Ontario Energy Board hiked electricity charges from 5.8¢/kWh to 6.5¢/kWh for the lower tier (600 kWh per month in the summer and 1,000 kWh in the winter) and from 6.7¢/kWh to 7.5¢/kWh for the higher tier. Rates for Time-Of-Use billing increased from 4.4¢/kWh to 5.3¢/kWh for off-peak and 9.3¢/kWh to 9.9¢/kWh for on-peak use. Mid-peak rates remained the same. Media reports estimate that the rate hikes will add between $7.60 per month for a typical household.
Electricity bill for an average household: $1,140
Impact of rate hikes: $91.20
Impact of HST: $98.50
Unfortunately, the bad news may not end there. A recent column in The Ottawa Citizen said that Ontarians will face even higher rates to pay for green power initiatives and further increases in electricity rates and electricity delivery charges. The Citizen points to estimates that by 2015, Ontario residents will be paying 42 percent for electricity than they do currently.
moneysense.ca, 9/09/10
It would be interesting for some expert(s) to predict what price increases might be required to generate the same increase in power needed in the future if we went with more nuclear instead of green power. I suspect we might be surprised to find the cost increases even greater.
The need for more power is coming from increased demand as well as the retiring of coal fired generation.
You missed another cost increase that OEB has mandated to Hydro One. Transport tariffs have been allowed to increase for direct customers of Hydro One. For example, “seasonal high density” customers (e.g. cottage owners) are now finding their transportation charges increasing 8.6% ($8.02 per month). As well, I now find that Hydro One charges me each month approximately $20/mo even when I have the hydro turned off during the winter season. So, I am paying Hydro One even though I am not using their product. An operator tells me this charge helps Hydro One maintain the infrastructure that allows me to use their product (when I use it) as well as deal with fallen lines after storms or other outages. Looks like another way to take money from Ontario taxpayers!
@David: It does seem that the claim that green energy initiatives will hike costs isn’t without debate. Here’s the opposing view published in another Citizen column:
“But Tom Carpenter, a research associate at Queen’s University’s Institute for Energy and the Environment, said claims that green energy will drive up the price of electricity are “simply false.”
Over the next two or three years, Carpenter said, the impact of FIT projects on electricity rates will be negligible, because the high-priced renewable energy will only represent a tiny fraction of the province’s generating capacity.
As the program expands, he said, economies of scale will kick in and prices will come down sharply.”
Reference
@Patty: I do not know if Ottawa Hydro (who is our supplier) also increased distribution charges. They may well have. I’ll have to look into my past bills. Ottawa Hydro also charges a fixed $10.20 per month. And we haven’t yet switched to TOU billing. Some reports indicate that TOU increases residential bills by 8% on average.
Ouch, I’m glad I live in Quebec
Maintaining a power grid takes A LOT of work. Hydro-QC has thousands of workers dealing with production and transmission issues everyday. I recently worked on a small transmission line (20km) built for a mine. It cost upwards of $10M only for the construction phase, and this figure does not include deforestation, road construction, materials, hydro employee payroll or other circumstances! That’s a VERY small project.
However, the rate increase IS excessive, especially if the forecasts are right. It will bring Ontario rates extremely high (some of the highest in Canada) – http://bit.ly/8ZhzGK
Maybe it’s time to look into reducing heating costs by using alternatives? Canadian FInancial DIY wrote an interesting post on geothermal heating – http://bit.ly/b7MfIf
(I really have to learn html…)
Here’s a note from Pat published here with permission:
The Hydro One charges are to direct customers (eg. those who are not served by municipal utilities). They will not show up on your Ottawa bill in the same manner. My view is that regulator agencies like to the OEB have been given a free hand by the Liberal government to raise user charges as much as possible to reduce the need for CRF capital and general tax increases. The Blue Box fiasco this summer is a classic example. Outrageous!!
@David. Nuclear’s dirty little secret is that it is the most expensive form of power on the planet, especially when you have to factor in the handling of nuclear waste. Photovoltaic (solar) power is the second most expensive form of electricity, but it is a distant second to nuclear.
Hydroelectric power has a massive up-front capital cost and also a huge environmental impact due to the flooding associated with creating a head pond – but once all of that is done, the actual electric power harvested from hydro is very cheap. Also, there are only so many rivers you can dam up until you don’t have any places left to build.
I personally think that it’s our duty to look for ways to consume less anyways. Higher power rates would actually help to make it economically feasible to, for example, justify the installation of better insulation and to look at living more efficiently (in smaller spaces) so that you have less space to heat to begin with…
We, as a society, are just addicted to living in giant mansions and having tons of stuff we don’t use to fill up those massive spaces. It’s simply unsustainable. Imagine that we’ve set the example and now people in China and India all want to own huge 3500+ sq ft homes, keep 2.5 cars and 5 acres of lawn. When all 5 billion people on this planet reach that goal, then we will need about 5 planet earths!
I know that I noticed the increase in our summer electricity bill. Imagine the shock you would see if the cost of a government service or municipal utility went down and stayed down. That would be shocking. Or even actual tax cuts clean across the board. Ha! I must be daydreaming!
Before I say anything, here’s some background on me. I work for a company that is heavily involved in the wholesale side of electricity in Ontario. We import/export electricity to/from Ontario and surrounding areas.
First, Tom Carpenter is wrong, the costs are large and very real. His problem is he is just looking at the fit and microfit plans, which has basically just been green masturbation for the average Joe who wants to put up a wind turbine or some solar cells on his roof so far. The real damage is coming from the fact that not a single megawatt of new generation will be built in the province without some form of gaurentee payment from the government and those gaurentees are exorbitant. All the many gigawatts of natural gas generation that has been built have contracts, all the wind generation, all the new hydro, all the new nuclear have contracts and all those contracts are at above market rates.
You can watch how much extra this stupidity is costing Ontario every month here: http://www.ieso.ca/imoweb/b100/b100_GA.asp
(last month was an easy month, it only added an extra 170 million to Ontarian’s bills).
Some of the contracts are fixed price contracts (i.e wind at 135 dollars a megawatt, when there isn’t a single month in the forward curve for Ontario electricity going out to 2016 over 60 dollars and the vast majority of months are under 50 dollars. For those of you counting, with your average wind farm generating at 30 % of capacity, that a mellow $223,0000 per year subsidy per megawatt of wind and you guys in Ontario have bought 1100 megawatts of wind so far.) The contracts for gas plants are contracts for differences, and no one really knows exactly what they say because the Ontario Power Authority keeps them confidential. My best estimate is that they are made up of a fixed price payment each month around $10,000 per installed megawatt and a variable payment based upon whether the unit was told to run during hours that were not profitable. The OPA has signed at least 3 gigawatts of these types of contracts.
The end result is that the costs are very real and substantial right now and they will only get worse as new above market rate contracts are signed. Anyway, I can ramble on about this stuff all day because thinking about it is a full time job for me… If you have questions or want to hear more please post here and I will try to answer the questions.
Phil S: Our one and only duty is to pursue things that make us happy. If consuming less makes you happy then good for you. Here’s another thing that high electricity prices make economically feasible to do: Move jobs that use electricity elsewhere. Seems like a good idea for the place that is supposed to be Canada’s manufacturing hub eh?
Also: nuclear’s dirty little secret is that it would be the cheapest form of electricity by far if the government got out of the way. We keep building these massive cement structures that are way over engineered using designs that have remained largely unchanged since the 1960′s because that all the government will approve. If the government got out of the way we would see massive innovation in that sector. Instead we get the same old crap from the 60′s because nuclear operator’s single biggest fear is that they build a nuclear generator and the government doesn’t let them turn it on and so they keep pumping out the same old crap (told to me in confidence by an engineer working in the sector here in Canada).
just looked at my power bill from alberta, and last month i was paying 8.7 cents per KWH, which sounds like its more than what you will be paying after your increase…the final cost including gst and tranmission charges for 650 kwh of power used was $95.08. Is that steep compared to Ontario?
Received the woes of an Ontario Hydro user, although I am a British Columbian. It does read as if it is all quite horrible. I think it is seen only in terms of immediate rate hikes, however, and obscures the fact that the province is trying both to come to terms with a poverty of hydro resources and to do so in a way that will allow two things: the possibility of a lower impact on the environment and the possibility of future sustainability. The Cost Of Green is the ogre that emerges whenever people try to come to terms with environmental sustainability. There is every reason to believe that these costs will crest and come down the other side with a much more healthy power supply in a much more healthy economy.
I don’t think the sky is falling.
We have been paying artificially low prices for a long time. The sooner we pay the true cost of generating and distributing electricity, the sooner we may realize we don’t want to use as much. We already have the technology to substantially reduce our power consumption, but the economics do not make sense with the current price we pay. This will obviously change over time.
[...] This post was mentioned on Twitter by Canadian Capitalist, rmacready. rmacready said: Ontario electricity prices by the numbers – http://bit.ly/aqXieQ Hydro bills going up by 42% by 2015. [...]
[...] Canadian Capitalist points out how Ontario customers can expect their electricity rates to increase this year and for the next several. Since I work in this industry I can say most customers in Canada will [...]
@Boris Yeltsin. Any business that prefers to waste resources or otherwise operate in an unsustainable fashion and can pick up and leave the country on a whim will do so regardless of electricity prices.
China is already full of businesses who can operate as wastefully as they want. Companies are pouring in there right now, but there will be a day of reckoning for them as well, when the communist party someday in the future finally gets fed up with the pollution and brown-outs.
Mathew said we are paying less than we should for electricity. Upon what do you base this? You see the dollars that our government is willing to spend on power from inefficient sources…money they flush down the drain and then recover form us through high electrical bills…debt repayments and the use fo tax dolalrs that should be going elsewhere , but instead go to pay for outrageous power costs…and you say we are not paying the true cost of electricity. You are right..we are paying more!!
@ Phil S: You wrote: “Nuclear’s dirty little secret is that it is the most expensive form of power on the planet, especially when you have to factor in the handling of nuclear waste. Photovoltaic (solar) power is the second most expensive form of electricity, but it is a distant second to nuclear.”
Sorry, I somehow inadvertently pressed Submit
. PhilS, can you point where you read that? I’ve read some about this, and generally it’s accepted that Solar PV and thermal are the most expensive, by far.
I always like to look at the dollar impact. Let’s consider an example of installing solar farms instead of a new 2000 MW nuclear plant. I’ll use the 20 year contract solar price for commercial properties of 10 MW which is $400/MW. OPG is currently paid around $60/MW for nuclear.
2000 MW x 24 hr/day x 365 days/year = 17,520,000 MWh / year
if we take the price difference of $400 – $60 = $340/MWh,
It will cost ratepayers an extra $5,956,800,000 per year to have solar power over nuclear.
Over the 20 year contract period the solar price will remain at $400/MWh and nuclear rates will rise. Even assuming a conservative 5% yearly increase in nuclear rates, we will pay a grand sum of $105,401,069,047 by choosing solar over nuclear.
Please explain how this is cheaper?
How many on-going jobs do solar farms create versus nuclear?
How much valuable farm land are we wasting by building these solar farms?
Which option would you choose in this situation?
Where are all the “Giant Brains” in Ontario????????Hydro Quebec has megawatts of water generated power……..so much that they are selling it to the U.S. Their rates are far below ours and they still have dams to build and existing dams that are half off line. Why don’t we build additional lines and buy their power and forget all the B.S. that Ontario Hydro wants us to believe about Nuclear, Solar, Gas Fired and Coal Fired plants. Lets start a petition to HST McGuinty to negotiate a deal with Quebec today…..not a hundred years from now.
@Phil S: It’s pretty easy to argue that only businesses that wish to waste resources stay in Ontario. The fact of the matter is it is expensive to operate there, primarily because Labour is way over priced. I would say the businesses that move to China are choosing to operate efficiently.
The Chinese government is already getting fed up with the pollution and brown outs. You know what they are doing? They are closing all their old coal plants and upgrading to new, cleaner coal. They are also moving away from targetting manufacturing jobs on to targetting higher value jobs like accounting, programming etc. If you think the Chinese will kick any manufacturers out of the country, you are a moron. They will do what we did in the 70′s through present day and grow the high value, low pollution work force and palm the new manufacturing jobs off on Africa and other asian nations.
@Wally: Seriously? A gigantic 1200 MW line was just finished this year between Ontario and Quebec. You know what is happening on that line? Quebec is buying Ontario power so they can turn off their hydro and fill their reservoirs. You can watch it happen in real time right here if you want: http://www.transenergie.com/oasis/hqt/fr/schemas.htmlx
If you think Quebec has all this excess energy then you have no idea what you are talking about. The vast majority of their extra energy is from a deal signed with NewFound land that basically allows Quebec to steal the energy from this huge dam in NFL at a small fraction of market value. They do have a decent amount of undeveloped hydro potential but it is just that, undeveloped. To develop that potential would require many billions of dollars and it isn’t very likely much of that energy would end up in Ontario. There are much better paying markets to the south of Quebec in New York and New England.
Read what I posted before. Your electricity bill is going up because of the government, not in spite of it. Those morons signed all these above market contracts with new generation ranging from gas to solar to hydro to wind. If they would have just left well enough alone and installed some scrubbers on the coal plants to green them up a bit Your electricity bill would be much lower.
[...] suggested that Ontario residents who are facing steep increases in their hydro rates (See post Steep Increases Forecast for Ontario Electricity Prices) can cut their electricity bills by as much as $750 per year by taking half a dozen simple steps. [...]
[...] Canadian Capitalist, The Toronto Star, The Ottawa Citizen and Tom Adams [...]
[...] Canadian Capitalist sounds the alarm on hydro costs. If you’re setting your electricity budgets based on rosy forecasts or Premier McGuinty’s nebulous promises to address rising electricity rates, you’d better think again and get ready to dig deeper [...]
Viva Dictatora McGuinty!
“If you think Quebec has all this excess energy then you have no idea what you are talking about”
Well on the “know what they’re talking about” scale, I’m sorry to say that the Canadian Hydropower Association ranks far above a bogus handle in a web forum. And they say there is a 11 GWe of undeveloped hydro in the James Bay area. This shouldn’t be surprising, because if you look at the original documents for the project you’ll note several dams were never built, due to lack of demand and lack of capital.
And that’s just James Bay. As you note, they’re getting power from NL, and on the other side there’s lots of power in MB as well. Let’s also not forget that we were actually *in the process* of running a line from northern Ontario to Manitoba to tap into their capacity, which at that time was 5 GWe. That project died in 1989 when the economy tanked, and power demand along with it.
Regardless of what happens, running new lines to QB and MN will be cheaper than building nuclear here in Ontario. Really, what else do we need to say?
Nor should we forget that there’s another 5 GWe of hydro right here in Ontario, although it is spread out all over the north and that would require more capital than a line to Mani-Quebec. And that said, what’s the #1 complaint about industry in the north? No electrical capacity and high delivery costs. Running some 768 HVDC lines would certainly fix that issue.
If you’ve made it this far, repeat this as required: there is enough hydropower in Canada to power every electrical demand we’ve had at our peak, as well as all of our cars if we go to plug-in hybrids. We could become the “greenest” nation on earth, for little effort and a little more money.
No savings for switching to off peak in Ontario. I moved 80% of my usage to off peak and calculated the average cost of a kwh = $0.20. Same price for the last 12 months no matter what I did or when I did it = TOU is bull sh1t.
In direct response to the price doubling I reduced my usage from 800 kwh a month to 200kwh. Off grid will be the end game. Boycotting the corrupt bloated dying crown Corp. feels good.
Switched from 180 watts of CFL to 20 watts of LED. Cook on gas or charcoal. Use a laptop instead of desktop. Boycott.
Can you believe that Ontarions voted McGuinty back in!!!!!!!!!!!!!!
What is wrong with people who do not look at the whole picture…..HST, Smart Meters,Hiring of more bureaucrats., this is what has killed other economies…Britain has a 20% VAT……..gee we’re good our hST is only 13%
………………
Greece, Italy and Spain……………..watch out……..we could be next
@maury markowitz
Do you have any idea how many billions of dollars it would cost to tap those 11 GW of undeveloped hydro? I addressed this already, but you didn’t get it, so I will address it in more detail so that perhaps you will understand.
Quebec has no extra built hydro capacity. They own approximately 5 GW of hydro capacity from the churchhill falls hydro project in NFL and in aggregate the vast majority of that energy flows through Quebec and is sold into New England and New York because those markets are premium markets (aka they will pay more for electricity) than Canadian markets. Ontario also exports a lot of power to the USA because Americans pay more for electricity than Ontarians.
To build up enough of that Quebec and Atlantic provinces hydro power to supply Ontario would be hugely expensive. I’m not going to go into the math of explaining that because it would be too long for here, but I will say that your own ontario government thinks a hydro project needs a gaurenteed rate of 12.2 C/kw for 40 years to be developed (http://fit.powerauthority.on.ca/quick-facts-table-1). This is approximately 3.5 times the wholesale price of electricity in Ontario. This simple cost analysis entirely ignores the fact that any extra production in Quebec or the Atlantic provinces would likely flow directly to the US due to the US being willing to pay more for the electricity than Ontario. (by the way, hydro electricity that uses dams isn’t all that green, it causes a lot of ecosystem damage)
I will say again that the main driver of high electricity prices in Ontario is the Ontario government signing stupidly bad contracts with generation. The global adjustment has been higher than the wholesale price of electricity for a very long time now. This means that you pay one amount for your actual electricity and then you pay another, higher amount to pay off all these out of market electricity contracts! You’re paying more for bad government contracts than you are for actual electricity! If the government cancelled all these dumb contracts the wholesale price of electricity would rise, but it would not double. The spread to american markets is usually only half a cent to a cent and a half wide, so having prices even a cent higher on the wholesale side would stop a lot of exports to America and free up a lot of capacity right there. If the whole sale prices were 2 cents higher Ontario would probably become a net importer from the USA and wouldn’t even need to build new generation for a while. Instead Ontarians are paying 3 + cents more a kw every month for the current situation. It boggles the mind.
@Boycott: it all depends… if you include the fixed charges (delivery, regulatory, etc) in your “average cost”, then the lower your consumption the HIGHER the average! It’s just simple math. At extreme, if you consume 1kWh/month (close to nothing), this average would be around $20/kWh !
That’s not to say TOU is necessary cheaper or better, by all means! Apples for apples, if you switch 80% of your consumption to off-peak, the blended rate would be 0.8×6.2c + 0.2×10.8c=7.12c. That’s basically the same as the 7.1 c “flat rate”.
But again, reaching 80% may not be easy. We are really careful about peak-hours, and still our September usage was 60% off-peak, 20% mid-peak and 20% on-peak. You can schedule the laundry, cooking and diswashing to be off-peak, but you cannot avoid the morning and evening program.
Regards,
Vasile
@vasile – indeed. Over the next 5-10 years I will be hunting for the elusive ” $20 kwh ” as I slowly go off grid. My most recent bill has dipped below the 150 kwh per month mark. I am already 10% off grid and find it to be a very enjoyable hobby. Solar panels require zero maintenance and produce 20-30 years worth of free electricity. There is no way nuclear is cheaper than this or can even compete (in it’s present form). I only need to spend around $7000 to go totally off grid DIY. I find this to be an attractive business model. No middlemen. No bureaucrats. No corruption. No excessive taxation.
Ontario’s electrical system is corrupt beyond recognition and bankrupt thanks to nuclear. Mc guinty wants to build more nuclear? More welfare for AECL? More stranded debt for the banks to profiteer on while the residents of this province suffer? No thanks. Sorry its not my fault you weren’t profitable. When you compare that to solar (free energy) it’s a no brainer. No matter what anyone says there is no way solar costs more than nuclear in it’s present form. Most of the candus shut down at less than a quarter of their life expectancy for billion dollar retubing. Then there are the decommissioning costs. Oh yeah we spent that because we ” needed it for something else ” style of accounting. Uranium mines are good? Keep chugging the tritium kool aid kids. 20,000 employees with half of them making over $100,000? I’m boycotting asap. All of them can be replaced by cheap solar panels from china RIGHT NOW. Hallehluah! Socialists saved by Communists. Adam beck must be doing somersaults. I strongly dislike hydro in it’s past and present forms and intend to discontinue doing business with them asap. Most products or services consumers have choice. There is no way to introduce competition in a inherent monopoly. When you do introduce additional generators they don’t want to compete with themselves and lower their profits. Good luck with the enron designed electrical market. Last one in north America eh? I know they can make my dream of the $20 kwh come true. Bureacracy gone wild!
@Boycott – I work for one of the OPG nukes and wanted to chip in and straighten some things out:
1) Solar – I agree that if everyone chose to install their own solar panels and live off grid, we’d all be better off; However, when the government offers them 80 cents/kwh for 20 years you know we’re all in for a world of hurt (well I guess you won’t be since you’ll be off grid). If we increased our power from solar up to 10%, our average price for power would double. That’s a guaranteed way to get the remaining industry in Ontario to leave.
2) Electricity prices – OPG is the only control the government has over electricity prices and we’re down to about 50% market share. The liberals are slowly disolving the company by shutting down our assets (coal) and not allowing us to invest in new ones (renewables). OPG nuclear is paid a fixed rate of around 5.5 cents/kwh for all the baseload power we can produce. All those 100k’ers and we’re still the cheapest supplier and all of our profits go back into McGuinty’s hands for him to piss it away.
3) Debt – The cost over-runs when OPG built it’s plants were mostly due to the government halting the project. I’m sure there was some miss management in there, but something like 50% of the cost of Darlington was interest charges and penalties that accrued while the project was on hold. As for the stranded debt, McGuinty has already collected enough money to pay off the debt, but the payments from your electricity bill go directly into government revenue, not on the debt. Easy to see why that’s not paid off.
4) Corruption – Ontario Hydro was an amazing company back in the 80′s. We were world leaders in power research and then came the Americans. The government stepped in assuming the company wasn’t running well and swapped out the executive team when a bunch of corrupt americans. They in turn recruited a bunch of their buddies and ran the company into the ground which resulted in the split up of the company. I think we’ve come a long way since that point. We’re running a lot more reliably and the company is very focused on costs. (eg. we had to pay for our own christmas lunch, since the company won’t cover any meals). Ever since that bad audit of Hydro One, the OPG finance folks have been all over costs like a pack of dogs on a 3 legged cat.
5) Refurbishment – as for managing a nuclear refurbishment, I guess the ball is in our court to prove we can do it on schedule and on budget. NB power failed miserably at it … we had to send some OPG managers to help get them back on track. It’s going to be difficult, but I think we’re on the right track to be successful.
I hope, for the sake of the rate payers, that the government gets moving on the new nukes or else we’re going to be screwed in Ontario. There is a deep valley coming in the total power supply curve around 2020 (Pickering end of life and Darlington mid-refurb) and if you think Quebec or the US is going to give us cheap import power in our time of need, I’ve got a bridge to sell you.
I look forward to your response.
wall + writing = free unlimited energy forever.
Merry Christmas,
B. Cott
*no smart meter required.
@boris yeltsin:
“Do you have any idea how many billions of dollars it would cost to tap those 11 GW of undeveloped hydro?”
Yes I do. It will cost between $1 and $2 per watt, so about $11 to $22 billion for 11 GW. These are the numbers used by the OECD and DOE for new large hydro projects, and are well in-line with ongoing projects in Canada and around the world.
For comparison, overnight costs for nuclear are around $4 to $4.50, and real costs are over $8, as one can easily calculate from the recent AECL bid for Darlington B (26 billion for 3.2 GW = $8.25). So if we want to build that same 11 GW with nuclear, it would cost about $90 billion.
So which would you prefer, the limitless power of hydro for $20 billion, or greatly fluctuating price of nuclear for $90 billion?
“’I’m not going to go into the math of explaining that because it would be too long for here”
Uh huh.
“Quebec has no extra built hydro capacity”
Quebec has an average of 9 GW of spare capacity for 2/3rds of the year, and another 11 GW left undeveloped. That is a simple statement of fact, one that you can trivially look up on the Canadian Hydropower Association web site.
“but I will say that your own ontario government thinks a hydro project needs a gaurenteed rate of 12.2 C/kw for 40 years to be developed”
LOLZ. That’s the price for micro projects, like microFIT solar. For large scale developments they pay, on average 1.1 cents. For comparison, power from Churchill falls is 0.27 cents/kWh.
“simple cost analysis entirely ignores the fact that any extra production in Quebec or the Atlantic provinces would likely flow directly to the US due to the US being willing to pay more for the electricity than Ontario”
Except for the obvious counterexample that Ontario buys power from Quebec all the time and recently upgraded our interchanges to allow another 500 MW of peak capacity. We pay the going commercial rate of 6.5 cents/kWh in this case, which is less than what we pay our own nuclear generators.
“the main driver of high electricity prices in Ontario is the Ontario government signing stupidly bad contracts with generation”
Perhaps. Or perhaps it’s the $21 billion in stranded debt? I’ll let others judge the validity of your argument.
@Hydro Worker
1) Solar – I agree that if everyone chose to install their own solar panels and live off grid, we’d all be better off;
Great! Because according to a recent study at Queen’s University, using Ontario as its example, the price of PV has already fallen to grid parity some time in the last 6 months or so.
This isn’t surprising if you think about it. Fixed-axis panels (like on a house’s roof) get about 1250 kWh/kW/year in Toronto (real numbers). So if I install 1000 W of panels, four common 250 W models for instance, it will provide 1250 kWh a year. The equipment, if purchased on the open market, goes for about $2 to $2.50 a watt. so the equipment costs will be around $2000 to $2500. They should last at least 25 years.
So then, ignoring the discount factor and degradation for the moment, LCoE = 1250 x 25 / 2500 = 12.5 cents/kWh. I pay about 15 to 20 cents/kWh on my bill, so as you can see, I’m better off putting up panels than buying it from Toronto Hydro. Even if one factors in a useful discount rate and real-world degradation, and continues to ignore the real-world 40+ year lifetimes, it still comes out around 15 to 20 cents.
Of course the government has done a wonderful job of making this impossible to achieve in practice. They wrote the FIT/microFIT system as if they were dealing with large companies like OPG. There’s permits, inspections, paperwork, metering issues, you name it. This adds $3500 to $8000 to the cost of the system. So there’s more cost in paperwork than actual panels!
This is why CanSIA is pressing for the ending of all subsidies by 2020. CanSIA stands for “Canadian Solar Industry Association” – and yes, they want the subsidies to end.
@Maury: I think the correct calculation is $2500 / (25 years*1250kWh/year) = 8c/kWh. Unfortunately, this doesn’t include installation (another $3000 for a 2-3 kWh system?), degradation and all the fees, as you already noted. If you add those, you’re probably closer to 25c/kWh. Agree, this may look better for bigger systems than 1kW.
What I would like to understand is how your bill comes to 15-20c/kWh. Do you divide the bill amount to the number of kWh?
Vasile
Yes, you are of course correct on the calculation. That’s *twice today* that I inverted it in Google – I use google’s search bar as my calculator, which is great but you have to watch your order of ops *very* carefully.
Large installs in the US are going in, with *everything* included, for between $3 and $3.50 a watt. Residential installs in California are well under $4, again, *everything* included.
For a 1 kW system that means an additional $3.5 a watt just for paperwork in Toronto. You can see the problem.
As to my bill, it’s actually down now because of the wonderful “Clean Energy Benefit” – great name BTW! My latest bill, in my hand, comes to 14.7 cents/kWh.
Note that this *is* an apples to apples number in this case, because if you put panels on your roof it turns the meter back, and all tariffs on your bill are based on consumption (even though some of them shouldn’t be, like debt repay which should be income tax based IMHO).
Yep my latest average kwh cost was 27 cents due to my usage going below 150 kwh per month. The avg over the last 12 months was 20 cents as I ramped usage down from 800 kwh/month to 200kwh/month.
You can buy solar for $1.50 a watt now. So a 1kw array would go for $1500. Divided by 31250kwh (25 years @ 1250kwh/yr) = 4.8 cents per kwh. Now that doesn’t include all costs. Extra costs generally represent another $1500 to $3000 for an array of that size depending on what you implement. But the bottom line is 1kwh solar = 10-15 cents. That’s not cost parity. For me it’s nearly 2- 3 times cheaper than current prices that I am paying on my bills.
Ho Ho Ho !
> Yep my latest average kwh cost was 27 cents
Ouch!
> You can buy solar for $1.50 a watt now
Not for small systems. The best you can do is about $2 for panels and inverters, add another $1 for BOS.