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Zapped: The High Cost of Ontario's Renewable Electricity Subsidies

Author

Listed:
  • Benjamin Dachis

    (C.D. Howe Institute)

  • Jan Carr

    (Ontario Power Authority (retired))

Abstract

Ontario’s Green Energy and Green Economy Act subsidizes producers of renewable electricity by paying them far more for their output than the prevailing market price of electricity. Wind power receives a fixed electricity price of 13.5 cents per kilowatt-hour, and solar receives even larger amounts. This subsidy will result in additional costs to the average Ontario household of $310 per year; ostensibly designed to reduce emissions and create jobs, Ontario’s renewable electricity subsidy is an expensive way of meeting these goals. The drag of unnecessarily high electricity costs on the Ontario economy could be reduced if the province did not award any further subsidized contracts to renewable electricity generators.

Suggested Citation

  • Benjamin Dachis & Jan Carr, 2011. "Zapped: The High Cost of Ontario's Renewable Electricity Subsidies," e-briefs 117, C.D. Howe Institute.
  • Handle: RePEc:cdh:ebrief:117
    as

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    File URL: https://www.cdhowe.org/public-policy-research/zapped-high-cost-ontario%E2%80%99s-renewable-electricity-subsidies
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    References listed on IDEAS

    as
    1. Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2010. "Economic impacts from the promotion of renewable energy technologies: The German experience," Energy Policy, Elsevier, vol. 38(8), pages 4048-4056, August.
    2. Patrik Söderholm & Ger Klaassen, 2007. "Wind Power in Europe: A Simultaneous Innovation–Diffusion Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(2), pages 163-190, February.
    3. repec:zbw:rwirep:0156 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Economic Growth and Innovation; renewable energy; Province of Ontario; Canada; Feed-In-Tariff (FIT) program; energy subsidies;

    JEL classification:

    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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