The cost of green energy has a relatively small impact on residential electricity bills in Ontario, a new study to be released Friday suggests, and that will not change significantly even as renewables take up a bigger portion of power generation.
That should be a lesson for other provinces considering the shift to renewables, says the study's sponsor, Environmental Defence Canada, because it shows Ontario's pro-green energy plan is not as costly as some critics claim.
The analysis conducted for Environmental Defence by independent energy consulting firm Power Advisory LLC, shows that the cost of energy from solar, wind and bioenergy currently makes up about 9 per cent of an average electricity bill in Ontario. Other forms of power make up about 48 per cent of the bill, while the balance is the cost of delivering power, a regulatory fee, tax and a charge to retire the debt on nuclear power plants. Ontario residents also get a 10-per-cent rebate called the "clean energy benefit."
In 10 years time, the study says, renewables will account for about 16 per cent of a household's total bill.
By that time, the Ontario government has projected, solar, wind and biofuel will make up about 17 per cent of the province's energy supply, up from about 5 per cent in 2013.
Renewable power is often blamed for rising electricity costs, said Environmental Defence campaign director Gillian McEachern, but they "play a fairly small role in Ontarians' electricity bills today."
Ontario's opposition Conservatives have often criticized the Liberal government's green-energy policies for driving up electricity cost, and they have pledged to kill off subsidies to wind and solar if they take power.
In Ontario's long-term energy plan released in December, the government estimated that an average monthly power bill in the province will rise from about $137 this year to about $191 in 2024– a jump of about 40 per cent. But Ms. McEachern said the bulk of that increase will come from inflation, not the increasing use of renewable source of power.
There are also significant benefits of the shift to renewables that are not reflected in those bills, she said, such as the reduction in health care costs that will result from the elimination of coal-generated power in the province. The distributed nature of renewable power – such as when solar panels are installed on rooftops – can also reduce the cost of transmitting power over long distances, she added.
While the report focuses on Ontario, where the debate over green energy has been most intense because of the province's efforts to promote renewables, there are lessons for other provinces, Ms. McEachern said.
"There is this false perception that [Ontario's] Green Energy Act has failed," she said. "That is potentially damaging for the transition to renewable energy nationwide. The lesson here is that Ontario has gotten off coal, has put in place renewables, and the ... cost to the average person is minimal."
As the cost of renewables – particularly solar power – continues to fall, they will become "more and more appealing," she said.
The Environmental Defence report also underlines the value of conservation and improved energy efficiency as means to keep energy bills under control. And it recommends an assistance program to help low-income households pay their power bills.