Story from the National Post. (H/T Small Dead Animals via ECM)
The Swedish retail giant IKEA announced yesterday it will invest $4.6-million to install 3,790 solar panels on three Toronto area stores, giving IKEA the electric-power-producing capacity of 960,000 kilowatt hours (kWh) per year. According to IKEA, that’s enough electricity to power 100 homes. Amazing development. Even more amazing is the economics of this project. Under the Ontario government’s feed-in-tariff solar power scheme, IKEA will receive 71.3¢ for each kilowatt of power produced, which works out to about $6,800 a year for each of the 100 hypothetical homes. Since the average Toronto home currently pays about $1,200 for the same quantity of electricity, that implies that IKEA is being overpaid by $5,400 per home equivalent.
Welcome to the wonderful world of green economics and the magical business of carbon emission reduction. Each year, IKEA will receive $684,408 under Premier Dalton McGuinty’s green energy monster — for power that today retails for about $115,000. At that rate, IKEA will recoup $4.6-million in less than seven years — not bad for an investment that can be amortized over 20.
No wonder solar power is such a hot industry. No wonder, too, that the province of Ontario is in a headlong rush into a likely economic crisis brought on by skyrocketing electricity prices. To make up the money paid to IKEA to promote itself as a carbon-free zone, Ontario consumers and industries are on their way to experiencing the highest electricity rates in North America, if not most of the world.
The government’s regulator, the Ontario Energy Board, has prepared secret forecasts of how much Ontario consumers are going to have to pay for electricity over the next five years. The government won’t allow the report to be released. The next best estimate comes from Aegent Energy Advisors Inc., in a study it did for the Canadian Manufactures and Exporters group. Residential rates are expected to jump by 60% between 2010 and 2015. Industrial customers will be looking at a 55% increase.
Going back to 2003, based on numbers dug up by consultant Tom Adams, the price of residential electricity in Ontario hovered around 8.5¢ a kWh in 2003 — the first year of the McGuinty Liberal regime. By 2015, Aegent Energy estimates the price will be up to 21¢, an increase of 135%. Doubling the price of electricity in a decade is no way to spur growth and investment. In this age of global economic competition IKEA may end up with fewer sales of its Billy bookshelves in Toronto because its customers will be bogged down with soaring power bills and a sliding economy.
I wonder how the taxpayers of Ontario, who have just been whacked with the HST, feel about this government waste. By the way, the Ontario Liberal Party is basically analogous the Democrat Party. So this is is going to happen to us, too, if they get their way.
One thought on “Ontario government gives IKEA $685,000 per year in solar power subsidies”
” wonder how the taxpayers of Ontario, who have just been whacked with the HST, feel about this government waste. ”
We feel helpless. Every few years we get to vote, and then our job is to shut up and pay up.