Solar Power ! - A Green Environment or Red bank account?
The provincial government has re-issued a limited number of time sensitive certificates permitting interested parties to install solar power panel systems for production of electricity to sell to the government.
The municipal FS 2015-22 report dated Dec.14 2015 concerns the installation of two FIT (feed in tariff) large solar panel systems at the old landfill site and on the municipal garage roof, both on the 7th line.The FS 2015-27 report dated Nov.23 2015 refers to the potential installation of up to ten Micro-Fit systems on the roofs of municipally owned properties at Stewart Street, the compost waste transfer station, 390 Sykes St., the museum, harbour pavilion, harbour house, Riverside, Bognor and Woodford halls. The main differences between FIT and Micro Fit systems is the amount of electricity that each system can produce.
The FIT system size is basically unlimited and can be installed anywhere and receives up to 24.2 cents per kWh. Much of Ontario's farmland is being converted to solar power farms. The cost for the two FIT systems is estimated to be $1.45 million for the landfill site and $288,000 for the garage rooftop system, a total of $1.738 million.
The Micro Fit system can only produce a maximum of 10 kwh, is usually installed on residential roof-tops and receives a higher price per unit. These prices paid by the provincial government to electricity producers have declined from an initial high of 80 cents per kwh since the implementation of the FIT programmes to less than 30 cents per kWh and continue to decline. Total installation costs for the ten named sites is estimated at $400,000 assuming that no repair work has to be done on the roofs.These so called 'green energy' initiatives will cost MOM $2.138 million which will have to be borrowed thus increasing our debt load. We already have one large debt due to the cost of Meaford Hall of $2.3million, we do not need another $2.138 million added to this amount. Increasing our debt load for 'wants' reduces our borrowing power for 'needs' such as promises made concerning roads.
Senior management have provided council with a plan in compliance with councils strategic priorities
2015-2018 of (1) establishing goals to increase revenue for MOM by 'investing in infrastructure' and (2) show that we are seriously involved in protecting the environment by 'ensuring sustainability'. This highly questionable solar panel investment has been accepted in principle by members of council. However, there has been no public debate on this subject, no comment on what due diligence and risk analysis this report has been subjected to (as demanded by council in 2015) and, much like all other economic development projects in this municipality, no consultation with volunteer members of the Economic Development Advisory Committee or other interested parties. So let's look at the facts and see whether what we get is worth the extra debt burden of another $2m plus.
ECONOMICAL BENEFITS -
Solar power has many advantages in the renewable energy scheme of things but it is not economical compared to other forms of power production. Ontario Hydro now pays 29 cents per kwh to Micro Fit system producers for electricity when hydro and nuclear power can be produced or purchased by the energy distributors for about 6-7 cents a kwh. Guess where Ontario Hydro get the money from to pay the high subsidy to electricity producers? Check the increase in you hydro bill!
It has been proven that without huge price subsidization, solar power production in Ontario is not economical due in part to lack of sun and too much winter snow cover. According to the Owen Sound Times, Owen sound finished 86th out of 100 Canadian cities on the list of sunless days. It is the leader in most sunless days in Ontario, the reason being its closeness to water. Meaford would be little different. On July 30 2015, the hottest day of the year in Ontario, solar power was only able to provide .3% of all energy required, less than the power provided by wind and/or bio-fuels.The most efficient solar panel used commercially is made by 'Sun Power' and has a maximum efficiency rating of 21.5%, almost a 10% lower efficiency rating than wind turbines. In Bangladesh, a third world country, solar power amounts for almost 4% of electricity production but is produced for only 17 cents per kWh. The North American grid can only absorb a given amount of power into its system before refusing to accept more. Unlike water, wind, gas or nuclear producers, solar energy cannot be turned off or diverted from 'the grid'. This results in power from cheaper producers being turned off or more money being spent on increasing the size of the grid. Ontario produces far more power than it needs and actually sells surplus at below cost to New York state.
"The government should only do what governments can do well' (Paul Martin former PM) implies that government should concentrate on governing, not investing, the private sector does it better!
The Wynne government with its politically motivated flavour of the year "Green Energy Act' ensures that residents of Ontario pay the highest electricity bills in Canada. Why? Because of the disgustingly high subsidy paid to solar power and other favoured 'green' energy producers. One of council's 'Strategic Priorities for 2015-18 is to "Review our energy plan and strive for more energy use from renewable sources'.(Ensuring sustainability -action item C). Like the rest of the 20 page Strategic Priority report, it sounds impressive but it mentions nothing about our part time council assisted by largely ill informed staff
investing taxpayers money to the amount of over $2m in a business venture that the municipality should not be investing in. Almost all financial experts, with the probable exception of communist regimes, agree that governments should follow and assist private enterprise, not invest in businesses they know nothing about.
Micro-fit roof top. Micro fit income @ 38.4 cents per kWh = 4500
Debt.repayment P/I @3.47% = 2280
Insurance = 250
Net annual income - single project $ 1970 (for10) $19,700 per year
This income is based upon the assumption that each system produces the output required at the rate of 38.4 cents compared to 2016 rate of .29 cents; the interest rate does not change and other expenses such as repair, maintenance, insurance, or MPAC costs do not increase.
FIT -ground FIT income @ 21.9 = 159,870
Debt.repayment P/I @ 3.24% = 98,850
Maintenance = 9,000
Insurance = 4,500
Net annual income $ 47,520 (for 20 years)
The 7th line roof top FIT@ 24.2 cents will have a net income of $ 10,350 (for 20 years)
$57,870 per year
If the total net revenue as stated above is $77,570, the average taxpayer(5600) will save approximately $13.85 each year. Compare this municipal saving with electricity cost increase. Unfortunately, there is no analysis provided to guarantee revenue and no background data on the efficiency of the panels. If the consultant used an average for efficiency, the revenue figure could be hopelessly too high. There is no breakdown for maintenance and with heavy snows and the extremely high winds around Meaford, no one can know what the average maintenance per year would be over the 20 year life expectancy of the panels. The building roofs have to be certified by a professional engineer as being strong enough and the true integrity of a roof cannot be guaranteed unless if has been checked beneath its shingles which adds further to the cost.The Return On Investment (ROI) pay back time is not known and there is a serious lack of real financial data in this report. Based on the uncertain financial facts that we have and without due diligence, we should not proceed with this or any other solar panel venture as it will put us closer to our debt level and reduce our ability to borrow for roads,bridge replacement etc which are necessities rather than wants.
ENVIRONMENT -The Strategic Priorities report further implies that we should invest in FIT programs and become a leading' green' municipality in Ontario. The current Ontario government also wants us to be seen as leaders in protecting the environment. No one can reasonably dispute the fact that we do need to become more 'green' minded. However, there is a dollar cost to 'going green'. We can already see the actual costs of producing so called clean green wind turbine energy on health, property values and construction of the turbines themselves. When the leases expire what will be the cost and who will pay for their removal ? 'For every action, there is a re-action'. Two years ago when the Greek nation was near bankruptcy and citizens could not afford fuel bills, many started to cut down national forests for fuel leading to an increase in pollutants and a decrease in carbon absorbing vegetation. A month ago, some friends and I were having a 'coffee morning' when the discussion turned to the latest increased cost of our electricity bills.I apologetically stated that because of the increased rates, I had started heating my home by burning more wood. I was amazed when the other four, all apologized for doing the same thing. We were all concerned with the environment but the high cost of our primary source, namely electricity, had forced us to turn to a cheaper, although less 'green' source of heating. Protecting our environment by investing in solar power is not the most efficient or cost effective way to 'go green'. If it is not cost effective, it will not happen. Fortunately, we do have our own real made in MOM alternative, hydro power, just waiting to be developed!
The vast majority of solar panels are produced extremely cheaply in China. China's basic source of fuel is coal and China opens a new coal mine every week. Coal, the dirtiest of fossil fuels is used to manufacture solar panels designed to produce clean green renewable energy! Two potentially dangerous substances, lead and cadmium are used in the manufacture of some solar panels but fossil fuels are used to mine them!
The normal life expectancy of solar panels is between 20-25 years and the question must be asked as to how and who will be responsible for their disposal. There are panel re-cycling companies in the USA, China, Europe and Britain but none in Canada. Many countries have re-cycling costs built into their price, much like a tire tax. In Ontario, there are no such provisions in place to deal with these waste products. At the end of their usefulness, will they be abandoned to contaminate our next generations environment?
In Bangladesh, a third world nation without large power resources are investing in solar farms but prohibit them from being constructed on agricultural land. This is done in part to maintain and protect valuable food producing land and also in part to preserve the natural flora and fauna which assist in absorbing carbon. In Ontario, in actuality, there is no protection for farmland or food producers. EDF,(electricite de france) a huge french power producer is buying up opposition to their construction of a 60 megawatt solar farm on 300 acres of prime agricultural land in Napanee. In Southgate, a farmer has leased some of his land to a solar power producer who will build the panels high enough above the ground to enable his sheep to graze below. If power transmission lines are harmful, what effect will the electric magnetic fields from the panels have on the lamb chops we have for supper?
As with wind turbines, who will clean up once their useful life cycle has ended? What will happen to the rural environment that we all know and love? This insane desire for green energy at any price is encouraging more and more people to be overly concerned with making a quick buck. There appears to be little concern for the true long term cause and effect on our environment. Quick fix solutions subsidized by our governments and paid for by ourselves seem to be the order of the day. In an attempt to protect the environmental future of our planet for the next generation, we are in fact burdening the next generation with even more garbage to dispose of. Solar power generation should not be permitted in our Municipality.
There is no real evidence to show that by borrowing $2.138 million and investing in this 20 year 'business' venture, the Corporation of the Municipality of Meaford will benefit environmentally. We do not produce any of our own energy so we cannot be re-newing. Why would we increase the carbon footprint (manufacturing) and develop future garbage (worn out systems) by creating something that we can call 'green'(..er, than coal?) even though we do not need it? Re-newable energy systems, which include solar and wind are great for replacing carbon producing fuels and should be used, where viable, to produce energy for those who need it. MOM has more than sufficient green hydro and nuclear power for our needs. We do not need solar power just to be known as 'green' like Brant County. They have 14000 households, a population of 31,000 and annual revenue of $96 Million vs our approximate $20Million. Their tax rate in 2015 was 1.07 per 00 CVA. Ours is 1.36 per 00 CVA. Brant tax payers are not over taxed!
The purpose of a municipal government is to provide services for the good of all its residents and this council, headed by the mayor, was elected by taxpayers based on promises made, to ensure that only desired services were implemented. Investing in FIT programmes is not a needed service desired by the taxpayers but rather a high risk investment and this council has received no mandate from the electorate to assume the mantle of a financial advisor and risk our money.
Investing in FIT programmes is a potential gamble with no end result for the next 20 years. If things do not go according to plan, it is us, the taxpayers who will be responsible for any losses incurred. How many staff and council members who support this program have actually invested any of their own money in FIT systems? In a corporation, the investment is liquid and if a stock holder wishes to leave, the shares can be sold. With this system, there is no such option for taxpayers.
The recent Auditor general's report shows that our provincial government has totally screwed up the Ontario Electricity market. $37 billion has already been wasted and a further $130 billion will be spent to complete all the outstanding FIT contracts. To comprehend what $130 billion looks like, imagine $100 bills placed end to end around the equator, six and a half times. We are all overpaying for electricity that we do not need. 'Renewable green energy' at any cost is the flavour of the Wynne government. It should not become the flavour of the Clumpus government. MOM should pass on making an investment in FIT programmes which will make electricity in Ontario even more expensive than it already is.
"to proceed with the project, with knowledge is insane,
to proceed with the project without knowledge, is just plain stupid"