Friday, October 5, 2012

Glut of Ontario Solar Panels Versus Ontario's Solar Subsidies

Here's a good New York Times article on the massive glut of solar panels being produced by various Chinese companies and how some companies are likely to go bankrupt. From an Ontario perspective, the fact that Premier Dalton McGuinty has tried to create a solar manufacturing industry with massive subsidies to individuals and companies installing solar here in the province is not looking smart.

Some interesting facts from the article including the price of coal versus solar power in China: "The average cost of electricity from solar panels in China works out to 19 cents per kilowatt-hour, said Mr. Li. That is three times the cost of coal-fired power. But it is a marked improvement from 63 cents per kilowatt-hour for solar power four years ago." That's actually quite impressive for solar. However for Ontario the sad fact is that we never needed to subsidize solar power to up to 80 cents a kilowatt-hour, as the price would have came down anyway from Chinese production, nor is there going to be any solar industry to speak of in Ontario save for installation as solar panel firms here can't compete with Chinese prices.

So we have the worst of all worlds, no solar industry, combined with massive electricity prices, especially compared to US states where power prices have been going down due to cheap natural gas prices (and not cancelling natural gas plants willy nilly). Also a related negative is that high rates are guaranteed to those rich enough to install solar installations in Ontario, while the price goes up for everyone, including the poor. Obviously that's not great for inequality, especially since this is just rent seeking.


3 comments:

  1. I think the mis-management of strategy planning is the failure of this bankruptcy.

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