Not Just Higher Hydro Prices – Hidden (and not so hidden) Impacts of the Green Energy Act.

Now that warmer weather appears to be here to stay, I’ve been able to get out on some long bike rides in the country. I continue to be interested in the number of solar panel installations  (P.V.) in our region. While the government has amended the compensation arrangement, there appears to be little slowing in the installation rate. I’m told by some who are more involved in the PV industry that while compensation has decreased from ~$.80 to ~$.53 / kw, apparently solar panel pricing has decreased almost proportionately – still leaving investors with returns of >10%. So from an investment perspective it continues to be fairly attractive.

From a governmental perspective, the evidence is even more mixed. Originally touted as a key to the kind of jobs that Ontario needs (which I completely agree with), I’m struck by the deafening silence on the number of jobs this has created. Don’t get me wrong, I’d love to see a robust global manufacturing industry leadership in Ontario, I’m just not aware that this has taken place. In fact, in not only Ontario, but in places in Europe (specifically Germany) investment in PV technology has dropped sharply as people realize that without massive subsidization the technology is challenged. At this point in time, can you think of a western democracy that has both the will and the balance sheet to undertake these kind of subsidizations , never mind whether they are a good idea or not?

In Wednesday’s Financial post there was an interesting opinion on the (not so transparent) effect of these initiatives Click Here to Read. Take the time to read it, it offers up some insight as to what the Green Energy Act might have done to the utility that produces all of the hydro in Ontario (O.P.G.). In these times of somewhat limited fiscal resources, it’s a shame to find out that not only have we signed up for higher electricity prices, but we may have also squandered some value of what used to be an excellent crown asset.

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Have a spectacular weekend!

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