Total energy subsidies, across all fuel types, account for 25% of the price of electricity in Ontario. Of that 25%, by far the largest segment is nuclear subsidies, which total $3.6b/year. It is these nuclear subsidies, and the retirement of the $19.5 billion debt that Ontario inherited at the break up of Ontario Hydro in 1998, that has been the overwhelming contributing factor in rising hydro bills in the province.
Once all currently contracted solar power sites are built out and generating, solar subsidies will still only account for $0.19b/year and will grow to at most $0.38b/year by the end of the FIT program. That’s still just one tenth of total nuclear subsidies, and solar power has the significant added value of producing power when demand is highest and electricity is most needed. On a $100 hydro bill, the amount currently attributable to solar power in Ontario is a little less than 86 cents.
Electricity demand and supply varies with season and time of day. Ontario is sometimes spoken of as having an energy surplus, but that is a simplification of the reality of Surplus Base Generation. Ontario is oversupplied with energy at night and in the winter, when demand is lowest. This is also the time when wind power produces the most heavily. Wind power, which currently receives more than double the total annual subsidies solar power does.
Ontario is on the verge of a peak power electricity deficit, with peak being the hot summer days when solar power produces most of its electricity. Further, transmission and distribution infrastructure make up the single largest component of electricity cost. Distributed generation, where solar panels are located at the point of electricity consumption, actively works to reduce those costs.
Solar subsidies are an investment in much needed new targeted generation for Ontario.