It’s no surprise that electricity prices in Ontario are going up again. Electricity prices have been consistently increasing by an average of 10% over the past 12 years… Before that an average of 8% per year in prices increases. The Ontario Government announced last fall that over the next 3 years, electricity prices in Ontario will be going up 30%… 30% over three years is 10% per year… So what else is new?
You know what that means don’t you? It’s going cost even more to run your household this year! Yeah… It’s going to cost more to do the laundry… more to use the oven… it’s going to cost more every time you turn on the TV… or when one of the kids leaves the light on in their bedroom after they leave for school.
And… it’s going to really hurt when it get’s hot out and you want to turn on your air conditioner.
Heating and cooling your house… and heating you hot water account for over 50% of the cost of electricity in a typical house. That’s a big deal as electricity prices in Ontario soar. So what can you do about it?
The reality is that I don’t see electricity prices in Ontario going down anytime soon… do you?
An inefficient air conditioner, such as a ten year old 10 SEER model will draw twice as much electricity as a more efficient 20 SEER model. TWICE AS MUCH! This could mean the ability to cool your house on those really hot spells in July and August… or sweating in your living room because it simply costs way too much to run that old air conditioner.
A couple years ago, I put some numbers down on paper. Given that electricity prices in Ontario have consistently gone up an average of 10% a year for over a decade… and that we’ve been guaranteed that those same electricity prices will increase 30% over the next three years, I simply created a spreadsheet using those same metrics. Because there are differing rates of electricity for different regions within Ontario… and given that some of us have flat rates, where others are on time-of-use rates, I had to come up with an average cost… for comparison sake.
Just like you, I also pay delivery fees, debt retirement fees, taxes, etc… etc… on top of my already high electricity rate. So, to make things easy, I simply take my total bill (the entire amount that I have to pay and that Hydro wants from me) and I divide it by the total KwH’s that I use. I consistently come up with $0.18/KwH as my average cost for electricity.
Now… when I use $0.18/KwH as my current rate of electricity, then add 10% a year (I’m not inflating things here) I come up with a rate of $0.41/KwH… 10 Years from now… and an electricity rate of $0.82/KwH… 20 Years from now.
At a 10% annual increase in electricity rates (just as rates have increased 10% a year for the past 12 years) we will be paying over 4 times what we pay now in 20 Years.
So if you’re running your old builder grade air conditioner that was installed with the past five to ten years, then you’re likely still going using it in the next ten years… and it’s going to start costing you a lot of money to run.
If you’re looking at a new air conditioner this summer, or in the next few years, then do yourself a favor and spend that extra dollar and get something super high efficient. Yes… it may be considerably more now, but will save you a pile of money down the road when electricity prices in Ontario are ridiculous!