Saturday, August 7, 2010

Government Energy Subsidies: Poor Paying the Rich

If you've read my blog more than once or twice, you'll know that I oppose wind and solar power subsidies based on the fact that they do not generate electricity consistently or cheaply enough to be considered an 'alternative' energy source. Moreover, I do not believe that increasing the amount of electricity generated from wind farms will significantly reduce carbon dioxide emissions since the intermittent nature of wind power requires fossil fueled generators to be running on 'standby' and because it holds the potential to de-rate or shut down nuclear reactors if the instability becomes too great. (When the nuclear reactors are shut down it will require greater amounts of fossil fueled generators to be used)

Those facts aside, we should not be using government monies to subsidize wind and solar projects for a different social reason.

A great deal of attention has been paid to the growing gap between the rich and the poor, even before the latest financial crisis. One question has been, what is fueling this growing gap? In my opinion, as the saying goes, you need money to make money. If you are rich, you have money to invest to earn more money. If you are poor, you have no money to invest and can only make money directly through an exchange of labour for money (ie by working). But if I may add to that saying, you need money and opportunity.

The Ontario government solar power subsidies were a huge opportunity for those with money to make more money. The government even admits now, that based on their original subsidy rates, the profit margins were in the range of 25-30%. Even the revised subsidy rates still leave the profit margins around 10%. Without the subsidies, building these solar energy projects would leave investors losing money hand over fist.

How much money do you make if you put your money in the bank? In mutual funds? In the stock market? Do you think you're making the equivalent of a 10% profit margin? Probably not.

There is a reason that even Conservatives like Rahim Jaffer were getting into the 'green energy' business.

Those with money, opportunity and the connections are going to be laughing their way to the bank with their profits courtesy of the Ontario taxpayer, thanking their lucky stars to have been at the right place at the right time. Meanwhile, the average worker will have the good fortune to be paying increased electricity rates in order to line the pockets of the fat cats on Bay street.

Perhaps they should send the Ontario government a thank you note in the form of a pink slip next election.

6 comments:

晨晨 said...

Poverty is stranger to industry..............................................

por said...

想別人怎樣對你,你便怎樣對待別人。......................................................

恩宛玲如 said...

在莫非定律中有項笨蛋定律:「一個組織中的笨蛋,恆大於等於三分之二。」..................................................

蕾蕾 said...

在莫非定律中有項笨蛋定律:「一個組織中的笨蛋,恆大於等於三分之二。」..................................................

佳張張張張燕張張張張張 said...

生存乃是不斷地在內心與靈魂交戰;寫作是坐著審判自己。..................................................

sabkon wells said...

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