In an “Earth Day” press release today, TD Bank inadvertently makes the link as to why energy prices are rising despite being awash in surplus supplies of electricity and natural gas:

Karen Clarke-Whistler, Chief Environment Officer, TD, predicts that solar panels will be standard on homes in 10 years. “Energy prices are only going to go one way, and that is up, so homeowners will be looking for ways to reduce costs,” said Clarke-Whistler. “With an increasing number of provincial government-backed incentive programs being rolled out across the country, we expect the solar products market to evolve rapidly. We can expect product innovation, a wider choice of products and increased affordability as more manufacturers enter the market.” [my bold]

If energy costs are inevitably going up it has as much to do with governments bilking the rate payer so they can subsidize high-cost sources of energy such as solar PV.

The fact that consumers would respond to such bribes, though, is not surprising. Without the bribes, many would spend their money differently. Instead of trashing their current furnace to replace it with a subsidized, high-efficiency model, they just might hang on to it for a while longer, and spend their savings on other things. Installing solar panels on their roof tops wouldn’t merit a second look if not for the massive subsidies. And somehow TD thinks it is prudent to pile on and up the ante.

In the realm of energy, economic considerations have become secondary. The decision faced by the consumer is no longer — should I keep my older furnace and pay a little more for energy or buy a new furnance and save on my energy bill? — but how big is my tax credit?

The TD Canada Trust Green Home Poll also revealed that 66% of Canadians say that tax credits would make them more likely to make energy efficient upgrades to their homes. “This shows that financial incentives really work when it comes to encouraging energy efficient home upgrades, so we hope that our Green Mortgage rebate will encourage our customers to consider renewable energy sources for their homes,” says Wisniewski.

Once hooked on subsidies, consumers come to expect it and may even hold out in the expectation of even bigger bribes in the future. The inevitable result is that the taxpayer ends up subsidizing many choices that consumers would have eventually made anyways.

Is it any wonder energy costs are going up?