Clear answer, explained.
A 100% annual solar offset does not necessarily result in a $0 electricity bill.
Commercial electricity bills contain more than the charge for electricity consumed from the grid. Depending on the utility, rate class and province, the bill can also include demand charges, distribution charges, fixed customer charges and other tariff-specific costs.
Solar can materially reduce the amount of electricity a facility purchases from the grid, but it does not automatically eliminate each of these other bill components. The exact impact therefore depends on the facility’s rate structure, when electricity is consumed, how solar generation aligns with that consumption and how exported generation is credited.
This is why commercial solar savings should be modelled using the facility’s actual utility bills and electricity profile rather than assuming that 100% annual electricity offset equals a zero-dollar bill.
What this means in practice.
- 100% annual solar offset and a $0 electricity bill are not the same thing.
- Solar primarily reduces electricity that would otherwise be purchased from the grid.
- Demand, distribution, fixed and other tariff-specific charges may remain.
- The financial result depends on the facility's utility rate structure.
- How solar production aligns with facility consumption can affect the value of the generated electricity.
- Financial modelling should use actual utility bills and rate information rather than annual kWh alone.
Best-fit environments.
- A solar proposal shows a high or near-100% annual electricity offset.
- You want to understand what portion of your existing electricity bill solar can actually reduce.
- You are reviewing projected solar savings before approving a capital investment.
- Management is comparing annual solar generation with the facility's current utility costs.
