Case Study: Solar for Commercial Buildings in Ottawa – Taking Advantage of the Ottawa DER Large Solar PV Funding Incentive

• Location: Ottawa, Ontario (eligible for the Ottawa DER Large Solar PV Funding Incentive)
• Building Type: Commercial office space, 30,000 sq. ft.
• Annual Electricity Consumption: 400,000 kWh
• Current Utility Rate: $0.12 per kWh (average rate for commercial electricity in Ontario)
• Peak Demand: 80 kW (average during operating hours)

The facility operates primarily during business hours, and most of its energy consumption comes from lighting, HVAC, and office equipment. 

These conditions allow for significant utilization of solar energy, reducing reliance on the grid and helping the facility achieve lower emissions while meeting its sustainability goals.

• Proposed System Size: 100 kW solar PV system
• Estimated System Cost: $250,000 – $300,000 (including installation, equipment, and labor)
• Ottawa DER Large Solar PV Funding Incentive:
  The program provides up to $860 per installed kW for large solar systems. For a 100 kW system, this translates into a maximum incentive of $86,000
• Net Metering: The facility will not be eligible for net metering under this program, meaning excess solar energy cannot be fed back into the grid for credits. 
  • Without net metering, all grid-tied solar energy generated must be consumed on-site during production hours to maximize cost savings. This limitation highlights the importance of aligning solar energy use with the building’s operational energy demand or exploring energy storage solutions to capture excess energy for later use.

Without Solar – Current Electricity Costs

• Annual Electricity Consumption: 400,000 kWh
• Current Utility Cost:
  • 400,000 kWh × $0.12 per kWh = $48,000 annually

Currently, the building spends $48,000 per year on electricity. By installing a 100 kW solar system, this building could significantly reduce its reliance on the utility grid.

Solar System Energy Production Estimate

• System Size: 100 kW
• Location: Ottawa
• Estimated Annual Solar Production: 120,000 kWh (dependent on factors such as system orientation, panel efficiency, and weather conditions)

Reduction in Electricity Costs (without net metering)

• Savings Calculation:
  • 120,000 kWh × $0.12 per kWh = $14,400 annually

By generating 120,000 kWh of solar energy annually, the building could save $14,400 per year on electricity costs.

Solution to Lack of Net Metering

Since net metering is not available for this project, the building cannot offset electricity costs during high-use months (such as winter) by feeding excess energy back into the grid. However, there are still several ways to maximize the financial viability of the system:

1. Maximize Solar Utilization:
   The building should aim to use as much of the solar energy it generates during business hours. This can be done by aligning solar energy production with peak demand for the building. Since the system is expected to generate 120,000 kWh annually, the building may be able to offset up to 30-35% of its total annual energy usage, directly reducing its grid reliance during the day.
2. Battery Storage:
   Although the building cannot export energy to the grid, battery storage can be added as a supplemental solution. Batteries would allow the facility to store excess solar energy produced during the day and use it during evening hours or during periods of peak electricity demand, thereby reducing reliance on the grid during non-sunlight hours.
   • Estimated Battery Storage Cost: Installing battery storage can cost between $100,000 – $150,000 depending on system size. A well-designed battery system could store 30-50% of the system’s daily output for use at night, further reducing utility costs.
3. Load Shifting and Energy Management:
   The building can also implement energy management strategies to shift non-critical energy loads (such as some HVAC functions or equipment) to the hours when solar energy is available. This approach minimizes the building’s reliance on grid electricity during peak hours and maximizes solar energy use throughout the day.

Total Savings (Without Net Metering)

• Annual Solar Production: 120,000 kWh
• Annual Savings from Solar: 120,000 kWh×$0.12 per kWh=$14,400 savings annually120,000 \, \text{kWh} \times \text{\$0.12 per kWh} = \text{\$14,400 savings annually}120,000kWh×$0.12 per kWh=$14,400 savings annually
• Total Annual Electricity Cost After Solar: $48,000−$14,400=$33,600 annual electricity bill\text{\$48,000} – \text{\$14,400} = \text{\$33,600 annual electricity bill}$48,000−$14,400=$33,600 annual electricity bill

So, even without net metering, the building can still reduce its annual electricity bill by $14,400 and maintain a significantly lower electricity cost.

1. Ottawa DER Large Solar PV Funding Incentive:
   The incentive reduces the upfront cost of the solar system, making the investment more accessible and improving the return on investment. The $86,000 incentive significantly lowers the barrier to entry for commercial buildings looking to install solar.
2. Battery Storage as a Supplement:
   To address the lack of net metering and increase savings, the building can implement battery storage. While this adds an upfront cost, it extends the utility savings and improves energy security, particularly during high-demand periods.
3. Long-Term Savings:
   Over the 20+ year lifespan of the system, the commercial building can enjoy significant savings on electricity costs. With electricity prices expected to rise over time, the savings from solar will likely increase, improving the overall return on investment.
4. Sustainability and Brand Value:
   Investing in solar energy helps the building reduce its carbon footprint, which can enhance its sustainability credentials. This can be a selling point for tenants or customers, contributing to higher occupancy rates or attracting environmentally-conscious businesses.

For commercial buildings in Ottawa, participating in the Ottawa DER Large Solar PV Funding Incentive offers a financially compelling opportunity to reduce energy costs and improve profitability. While the inability to participate in net metering may initially seem like a limitation, strategic energy management, battery storage, and aligning solar generation with peak demand hours can still result in significant savings and a solid return on investment.

With the $86,000 incentive covering a substantial portion of the upfront cost and annual savings of $14,400, the building can expect to pay back its investment in just over 11 years and enjoy continued savings and sustainability benefits for decades.

For commercial real estate investors in Ottawa, solar offers a low-risk, long-term solution to controlling energy costs, increasing property value, and meeting sustainability goals—all while benefiting from government support through the Ottawa DER Large Solar PV Funding Incentive.

Maximize energy savings and elevate your office building’s sustainability with expert solar installations in Ottawa. 

Contact us today for a free commercial solar consultation!