Ontario feed-in tariffs creating solar jobs at the cost of a donut per month
Photo: Daniel NugentUsing a measure of cost that all Canadians understand, a provocative new report says the impact of Ontario’s feed-in tariffs for solar photovoltaics (PV), which will create 70,000 jobs, is no more than one Tim Hortons donut per month.
Tim Hortons is a popular Canadian coffee-shop chain found in even the smallest village.
The confidential report comes at a time of heated political debate in the provincial capital of Toronto about the cost of the current government’s Green Energy and Green Economy Act. Ontario’s feed-in tariff program is the most visible — and the most controversial — aspect of the policy.
The report by ClearSky Advisors was prepared for private, and so far unnamed, clients. However, a summary has been released to the media.
ClearSky says that by 2015, Ontario’s solar PV industry will have created 72,000 person-years of jobs.
Ontario plans to close all its coal-fired power plants by 2014. Generation by renewable sources, including solar PV, will be used to offset the coal-fired generation lost.
Program cost minimal
Critics of the program say that feed-in tariffs are the cause of what they claim are increasing electricity costs.
Not so, says ClearSky’s summary. Cost of electricity in the province will increase slightly to a maximum of about one percent of a typical household’s bill, then decline steadily as the initial contracts work their way through the system.
Solar PV is the most expensive of the new renewable energy technologies. Though costs are rapidly declining, generation from solar PV is still several times more costly than that from wind, hydro, or biogas. Thus, feed-in tariffs for solar PV are a lightning rod for critics of renewable energy.
In a previous report, ClearSky estimated that Ontario will install 3,000 megawatts of solar PV in the next five years. During the period studied in this report, ClearSky says Ontario will install a total of 6,000 megawatts of solar PV by 2021. For comparison, California is expected to have a total installed capacity of 800 megawatts and the U.S. 1,700 megawatts of solar PV by the end of 2010.
If ClearSky’s estimates become reality, Ontario will soon become the largest center of solar PV development in North America by a wide margin, and rival European countries, which are currently the leaders in solar generation.
More jobs from solar PV than coal or nuclear
The Green Energy Act was in part justified by the job-creation potential in Ontario’s industrial sector, which was hard hit by the collapse of North America’s auto manufacturers.
Implementation of the province’s feed-in tariff program by the Ontario Power Authority includes a controversial domestic content provision. In effect, a substantial portion of any solar system installed in Ontario must be manufactured in the province.
ClearSky’s summary suggests that this policy may in fact work as intended at creating new jobs. The report says solar PV creates 12 times more jobs than nuclear per kilowatt-hour of electricity generated and 15 times more than coal.
More jobs per dollar invested
ClearSky calculates that while investment in solar PV results in 30 percent to 40 percent as much electricity as investment in conventional sources, the investment in solar PV pays dividends in job creation. According to ClearSky’s summary, investment in solar PV creates 2.4 to 6.4 times more jobs than a similar investment in conventional sources.
Ontario solar PV billion dollar market
At the current pace of development and with the limitations of a weak, antiquated grid in mind, ClearSky projects that between 2010 and 2015, Ontario’s burgeoning solar industry will attract nearly $7.8 billion (USD) in private capital.
Clean generation saves ratepayers 20 percent
On Oct. 17, 2010 the Ontario government announced a rebate of 10 percent on ratepayers’ electricity bills to compensate for what it calls the “Clean Energy Benefit” of the Green Energy Act. The rebate will be paid for from tax revenue.
In a posting on their website, “Why Ontario’s Clean Energy Benefit Makes Sense — Sort Of,” ClearSky argues that the rapid development of clean sources of generation to replace the existing coal-fired plants saves taxpayers money by eliminating coal’s social and environmental costs.
The posting has revised interest in a long-forgotten report on the cost of coal-fired generation. The 2005 report, Cost Benefit Analysis: Replacing Ontario’s Coal-Fired Electricity Generation [PDF], tallied the then social cost of electricity from the province’s nuclear-powered and fossil-fired fleet of generators. The report says Ontario’s coal-fired power plants cost Ontario nearly $0.127 (USD) per kilowatt hour in environmental and social impacts.
According to ClearSky, new renewable generation under the Green Energy Act’s feed-in tariffs saves ratepayers the equivalent of 20 percent on their electricity bills. Thus, they reluctantly say, the province’s Clean Energy Benefit does appear justified and could be even higher.
While ClearSky’s market analysis won’t settle the debate on the future of Ontario’s electricity system, it clearly shows that the province is headed toward becoming a leader in renewable energy development, and especially in the creation of a solar PV industry.