Oncor Commercial Energy Incentive Programs

Commercial Energy Incentives by Oncor

Oncor is the largest transmission and distribution utility (TDU) in Texas, with over 10 million customers and a service territory that covers the Dallas-Fort Worth metroplex. They have some of the largest energy incentive programs in the state, covering energy efficiency and solar power, for both homes and businesses. 

Here is an overview of the commercial energy incentives offered by Oncor in 2023. We also have a page covering their residential incentive program.

NOTE: The Public Utility Commission of Texas (PUCT) reviews and approves all incentive programs offered by utility companies in the state.

Oncor Energy Incentive Budget for 2023

Oncor has announced a budget of $21,712,120 for energy efficiency measures and solar power systems in 2023. The residential sector is getting $11,178,360, and commercial clients have access to $10,533,760 divided as follows:

• Commercial Standard Offer Program = US$ 8,493,760
• Commercial Solar Photovoltaic = US$ 2,040,000
• Oncor will also be providing around $1.2 million for projects that have been carried over from 2022.

It is important to note that incentives are offered through approved service providers, and not directly for commercial customers. However, companies with a peak demand of over 50 kW may be allowed to complete upgrades on their own, if they can demonstrate the required technical capability to Oncor program managers.

• New construction projects require a post-inspection
• Retrofit projects in existing building require a pre-inspection and post-inspection

Here we will discuss the main benefits of  the Oncor Commercial Standard Offer and Solar PV programs, and eligibility requirements for commercial customers.

Oncor Commercial Standard Offer Program

The Commercial Standard Offer Program (CSOP) is designed to help businesses reduce their electricity costs and environmental footprint. The program offers incentives for many types of energy efficiency measures, but it focuses on two main areas:

• LED lighting
• Efficient HVAC – heating, ventilation and air conditioning

In 2022, the Oncor CSOP provided $6,216,107 in energy efficiency incentives across 333 different projects. On average, each project achieved 40 kW in demand savings and 201,424 kWh in energy savings.

• Applications for Oncor’s 2023 Commercial Incentive Program opened on December 23, 2022.

• The deadline for CSOP applications is November 15, 2023. The program closes if the budget is depleted earlier, but Oncor can decide to increase funding based on results.
• There is a 15% bonus for projects outside of the five-county metroplex (Dallas, Tarrant, Rockwall, Denton and Collin).
• For example, an incentive of $100,000 in DFW becomes $115,000 for an identical project outside of the metroplex.

Incentives are available for both new constructions and existing buildings. An inspection is required after all projects, and in existing buildings there must also be a pre-inspection. The minimum incentive is $500 per project, and the maximum amount is 50% of the total cost of energy efficiency measures.

The CSOP eligibility requirements depend on the type of energy efficiency measure. The following requirements apply for LED lighting and HVAC, which are the most common upgrades in this program:

*The requirements for all eligible measures are provided in the CSOP Program Manual.

The Oncor CSOP offers the following incentive rates for eligible lighting and HVAC upgrades:

*If a building has T-12 lamps and magnetic ballasts, savings must be calculated with T-8 lamps and electronic ballasts as the baseline.

The Oncor commercial incentive program focuses mostly on LED lighting and HVAC upgrades. However, incentives are also available for the energy efficiency measures in the following table:

The Commercial Midstream HVAC Program was introduced in 2022, covering equipment types not included in the table above:

• Air conditioners (split, mini-split and packaged)
• Air source heat pumps (split, mini-split and packaged)
• Packaged terminal air conditioners (PTAC)
• Packaged terminal heat pumps (PTHP)

In this program, Oncor collaborates with approved equipment providers, offering point-of-sale discounts for contractors and end users. The following table summarizes the equipment types covered by each incentive program.

Commercial Solar Photovoltaic Program

The Solar Photovoltaic Standard Offer Program (SPVSOP) is available for both homes and businesses in the Oncor service area. The total budget for 2023 is $3,390,000, which is divided as follows:

• $2,040,000 for commercial solar power.
• $1,350,000 for residential solar power.

In 2022, Oncor provided $1.32 million in commercial solar incentives. The program completed 33 solar PV installations with an average project size of 39.2 kW.

The 2023 Solar Incentive Program opens for applications on February 6. To be eligible, commercial solar power systems must meet the following requirements:

• Generation capacity between 10 kW DC and 450 kW DC, or a capacity covering at least 75% of building peak demand (whichever is less).
• There must be no solar panels already operating in the property.
• The solar power system must be installed in an existing building.
• Energy storage is mandatory to qualify for the incentive in residential solar installations, but optional in commercial installations.

The maximum incentive amount is $120,000 per project. When this benefit is combined with the nationwide Investment Tax Credit (ITC), the cost of solar power can be greatly reduced for Oncor’s commercial customers. The solar ITC was increased to 30% and extended through 2034 in August 2022, thanks to the Inflation Reduction Act (IRA).

• The 30% federal tax credit is now available for commercial batteries in both stand-alone and solar plus storage applications.
• Before the IRA, only batteries getting at least 75% of their charge from solar panels or other onsite renewables would qualify.

Commercial solar systems currently have an installed price of around $1,660/kW in the US (Source: SEIA Solar Market Insight Report). For example, a company can expect to pay around $747,000 for a 450-kW solar PV system. If this project gets the maximum incentive of $120,000, the net price is reduced to $627,000.

The owner can then claim a federal tax credit of $188,100 (30%), which results in a final price of $438,900. The combined effect of both incentives decreases the price per kilowatt from $1,660 to $975 (a total reduction of 41%).

NOTE: This is just a simplified example. To get an accurate solar PV system quote, a professional assessment of your building is necessary.

These incentives are provided through approved solar installers such as Pro Star Energy, and not directly to Oncor customers. However, companies can get incentives directly if they demonstrate the technical capacity to install and manage a solar power system. The company must also have an Electrical Contractor License or Master Electrician License.

Cash in on Oncor Incentives in 2023

For more information regarding solar benefits from Oncor, contact ProStar Energy. From conception, to financing to installation, ProStar does it all.

Note: Quick Electricity is a Texas retail electricity provider, not a subsidiary or otherwise affiliated with Oncor. Our goal is to provide consumers with updated, concise information surrounding the Texas energy market.