Last Updated on July 17, 2021 by Mary Pressler
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. Oncor Energy has some of the largest energy incentive programs in Texas, covering homes and businesses.
We previously published an article about residential incentives from Oncor in 2021, and we now provide an overview of their commercial energy incentives. Note- the Public Utility Commission of Texas (PUCT) evaluates all incentive programs offered by utility companies in the state.
Oncor’s Energy Incentive Budget for 2021
Oncor has announced a budget of $26,654,464 for energy efficiency measures and solar power system in 2021. The residential sector will get $17,262,410, and commercial clients have access to $9,392,054, divided as follows:
- Commercial Standard Offer Program = US$ 7,353,614
- Commercial Solar Photovoltaic = US$ 2,038,440
In this article, we will 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 footprints. 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 2020, the Oncor CSOP provided $7,700,000 in energy incentives: $5,187,021 for lighting upgrades, $2,284,577 for HVAC upgrades, and $228,402 for other upgrades. There were 325 projects, with an average incentive of $23,668 per project. The largest incentive awarded to a single project was $413,135, which represented more than 5% of the 2020 budget.
Applications for the 2021 commercial program opened on December 15, 2020, and will be received until November 15, 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.
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:
|Upgrade Type||Requirements||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)
-Service life of 14 years for indoor lighting, 15 years for outdoor lighting
|-LEDs used as heat lamps
-LED tubes other than type “C”
|HVAC upgrades||-Must meet DOE Standards
-Must meet the IECC 2015
-Meet the minimum efficiency values specified in the program manual for each type of system (EER, SEER, IEER, kW/ton, HSPF, COP, etc.)
|-HVAC controls only, without an equipment upgrade
-Measures that rely on occupant behavior 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|
*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|
|Air conditioner or heat pump, DX type||$404.79/kW and $0.095/kWh|
|Geothermal / ground source heat pump||$336.90/kW and $0.101/kWh|
|Centrifugal chiller||$387.81/kW and $0.125/kWh|
|Non-centrifugal chiller||$348.13/kW and $0.112/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.
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 2021 is $3,387,390, which is divided as follows:
- $2,038,440 for commercial solar power.
- $1,348,950 for residential solar power.
In 2020, Oncor provided $2,680,807 in commercial solar incentives. There were 68 installations completed, with an average size of 33.02 kW and an average incentive of $40,424. Since there was a high demand for incentives, the initial budget was increased by over $700,000.
The 2021 program is receiving applications from January 27 to April 16. To be eligible, commercial solar power systems must meet the following requirements:
- Generation capacity between 5 kW DC and 300 kW DC.
- The nameplate capacity must also be at least 75% of the building’s peak demand.
- There must be no solar panels already operating in the property.
- The solar project must be installed in an existing building – new constructions are not eligible in the 2021 program.
- There is a 15% incentive bonus for projects outside of the five-county metroplex
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 recently extended, in December 2020.
- In 2021 and 2022, solar installations will 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 $2,000 per kW in the US. For example, a company can expect to pay around $600,000 for a 300-kW solar PV system. If this project gets the maximum incentive of $120,000, the net price is reduced to $480,000. The owner can then claim a federal tax credit of $124,800 (26%), which results in a final price of $355,200. The combined effect of both incentives decreases the price per kilowatt from $2,000 to $1,184, which is a total reduction of 40.8%.
Generally, these incentives are provided through approved solar installers, and not directly to Oncor customers. However, companies can get incentives directly if they can 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.
2021 Oncor Commercial Program Presentation
2021 Commercial Standard Offer Program Manual
2021 Oncor Solar Program Presentation
2021 Solar Photovoltaic Standard Offer Program Manual