How does behind-the-meter solar affect Global Adjustment charges in Ontario?

Q: How does behind-the-meter solar affect Global Adjustment charges in Ontario?

It depends on the facility’s customer class. For Class B customers, Global Adjustment is generally based on monthly electricity consumption. For Class A customers participating in the Industrial Conservation Initiative, GA is based on the facility’s contribution during Ontario’s five system peak hours. Solar affects the two structures differently.

Clear answer

Clear answer, explained.

For Class B customers, Global Adjustment is generally calculated using monthly electricity consumption multiplied by the applicable Class B GA rate. Behind-the-meter commercial solar reduces electricity purchased from the grid when the facility consumes solar generation onsite, which can reduce the consumption to which Class B GA applies. IESO

For Class A customers participating in the Industrial Conservation Initiative, the calculation is different. Their monthly GA charges are based on a Peak Demand Factor reflecting their percentage contribution to Ontario demand during the five highest system peak hours in the applicable base period. IESO

Solar can reduce a Class A facility’s contribution when solar generation is occurring during one of those system peak hours and reduces the facility’s grid withdrawal at that time. However, solar production depends on weather and time of day, so the GA impact should not be assumed as a fixed percentage of annual solar generation.

Facilities specifically focused on managing peak consumption may also evaluate commercial battery storage because storage can be dispatched according to facility demand and peak-management objectives. Solar and storage can also be evaluated together where the facility’s load profile supports both technologies.

Key points

What this means in practice.

Class A and Class B customers are treated differently for Global Adjustment.
Class B GA is generally based on monthly electricity consumption.
Class A GA is based on the facility’s contribution during Ontario’s top five system peak hours.
Solar can reduce GA exposure, but the effect depends on customer class and timing.
Class A GA savings from solar should be modelled rather than assumed.
Battery storage can provide an additional tool for managing peak-demand exposure.

When this applies

Best-fit environments.

Your facility is evaluating solar and Global Adjustment is a significant electricity-cost component.
You are a Class A customer participating in ICI.
You want to understand whether solar production will coincide with system peak periods.
You are comparing solar and battery storage as part of a broader electricity-cost strategy.