Last Updated on May 22, 2022 by Mary Pressler
Commercial Energy Incentives by Oncor
Updated February 2022
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.
We previously published an article about residential incentives from Oncor in 2022, and we now provide an overview of their commercial energy incentives.
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 2022
Oncor has announced a budget of US$11,238,590 for energy efficiency measures and solar power systems in 2022. The residential sector is getting US$2,169,220, and commercial clients have access to US$9,069,370, divided as follows:
- Commercial Standard Offer Program = US$ 7,030,930
- Commercial Solar Photovoltaic = US$ 2,038,440
Next, we discuss the main benefits available in each program, 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 2021, the Oncor CSOP provided $8,703,596 in energy incentives: $4,678,898 for lighting upgrades, $3,807,122 for HVAC upgrades, and $217,576 for other upgrades. There were 485 projects, with an average incentive of $26,396 per project. The largest incentive awarded to a single project was $400,506, equivalent to 4.6% of the 2021 budget.
- Applications for Oncor’s 2022 commercial incentive program opened on December 16, 2021.
- The program closes if the budget is depleted earlier, but Oncor can decide to increase funding based on results.
- Just like in residential programs, there is a 15% bonus for projects outside of the five-county metroplex (Dallas, Tarrant, Rockwall, Denton and Collin).
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.
|Upgrade Type||Requirements||Examples of Ineligible Measures|
|LED lighting||-DLC Listed or ENERGY STAR
-LED tubes must be type “C”
-Electronic ballasts: CEE-approved or NEMA Premium, with a maximum THD of 20%
-Meeting the lighting levels specified by the Illuminating Engineering Society (IES)
|-LEDs used as heat lamps
-LED tubes other than type “C”
-Plug loads and track lighting
|HVAC upgrades||-Must be AHRI certified.
-HVAC units with a capacity of 20 tons or more must include AHRI performance data in their specifications.
-Chiller units require a manufacturer simulation at 100% load, under AHRI conditions.
|-HVAC controls only, without an equipment upgrade
-Measures that rely on occupant behavior changes, with zero investment.
-Maintenance, commissioning and operational changes.
*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:
|Type of Lighting Upgrade||Oncor Incentive|
|Screw-in LED in eligible applications||$146.58/kW and $0.040/kWh|
|LED fixture (not screw-in)||$209.21/kW and $0.057/kWh|
|Screw-in LED, corn cob type||$209.21/kW and $0.057/kWh|
|Modular CFL or CCFL fixture||$217.67/kW and $0.059/kWh|
|T8 and T5 Fluorescent||$213.44/kW and $0.058/kWh|
|LED tubes, Type “C” and DLC Approved||$6 per fixture|
|Occupancy sensor controls, lodging guest room||$80 per room|
*If a building has T-12 lamps and magnetic ballasts, savings must be calculated with T-8 lamps and electronic ballasts as the baseline.
|Type of HVAC||Oncor Incentive|
|Variable refrigerant flow systems (VRF)||$294.79/kW and $0.095/kWh|
|Geothermal / ground source heat pump||$294.79/kW and $0.095/kWh|
|Water cooled centrifugal chiller||$387.81/kW and $0.125/kWh|
|Water cooled screw/scroll chiller||$348.13/kW and $0.112/kWh|
|Air cooled centrifugal chiller||$387.81/kW and $0.125/kWh|
|Air cooled screw/scroll chiller||$348.13/kW and $0.112/kWh|
|Water cooled DX unit||$294.79/kW and $0.095/kWh|
|Variable frequency drives for HVAC||$285.29/kW and $0.086/kWh|
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.
An important change in 2022 is the new Commercial Midstream HVAC Program, which covers 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.
|Oncor Incentive Program||HVAC Equipment Types Covered|
|Commercial Standard Offer Program||Chillers, VRF systems, geothermal, water-cooled DX|
|Commercial Midstream HVAC Program||Air conditioners (split & packaged), air-source heat pumps (split & packaged), PTAC, PTHP|
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 2022 is $3,387,390, which is divided as follows:
- $2,038,440 for commercial solar power.
- $1,348,950 for residential solar power.
In 2021, Oncor provided $2,513,873.60 in commercial solar incentives. There were 53 installations completed, with an average size of 40.11 kW and an average incentive of $47,431.58.
The 2022 program started receiving applications on January 25. To be eligible, commercial solar power systems must meet the following requirements:
- Generation capacity between 10 kW DC and 450 kW DC.
- The nameplate capacity must also be at least 75% of building peak demand.
- 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 extended by Congress in December 2020.
- In 2022, solar installations get a 26% federal tax credit.
- In 2023, the incentive drops to 22%.
- From 2024 onwards, the incentive will be 10% and only available for commercial solar power (0% for residential installations).
Commercial solar power currently has a price of around $1,500 per kW in the US. For example, a company can expect to pay around $400,000 for a 500-kW solar PV system. If this project gets the maximum incentive of $120,000, the net price is reduced to $630,000. The owner can then claim a federal tax credit of $163,800 (26%), which results in a final price of $466,200. The combined effect of both incentives decreases the price per kilowatt from $1,500 to $932, which is a total reduction of 38%.
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 2022
For more information regarding solar benefits from Oncor, contact Kate Sudol with 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.