How to Reduce Energy Costs with Solar Panel Installation

Every agricultural, commercial, and industrial facility owner in Ontario knows the pain of rising electricity bills. 

In the past five years alone, commercial energy costs in Canada have climbed by 15–25% in many regions, with Ontario’s rates among the highest in the nation. 

Much of the burden comes from the province’s Global Adjustment (GA) fees and other charges that make energy costs unpredictable. 

But there’s a proven way to take control: solar panel services. The cost of solar technology has fallen over 80% since 2009, and with today’s government incentives, Southwestern Ontario businesses can significantly reduce their energy costs, with typical solar system paybacks ranging from 5–8 years and some projects achieving returns in as little as 3 years depending on available incentives and local rate structures.

In this post, we’ll unpack what that journey actually looks like, everything from payback periods to the generous incentives that make going solar panel installation more affordable than ever.

We’ll also touch on the benefits that don’t show up on a balance sheet, like shrinking your carbon footprint and gaining a measure of energy independence. 

At the end of the day, the goal is simple: to give you a clear, credible roadmap for saving money with solar, one that’s rooted in the expertise of local partners like Toews Power.

Why Solar Energy is a Game-Changer for Your Finances

From a financial perspective, solar power is one of the best investments a facility can make today.

Many solar systems for businesses now achieve payback in as little as 5-8 years, after which they continue generating essentially free electricity for decades. 

Many modern solar panels typically carry 25 to 30-year performance warranties. Studies suggest they can still produce around 80% of their original output even after 40 years.

This means that once your system is paid off, your facility enjoys a long period of very low operating costs. It’s like getting power at near-zero cost for 20+ years. Few other capital investments can offer that kind of long-term benefit!

• ROI & Payback: Many commercial solar systems in Southwestern Ontario see payback in 5–8 years, though some achieve returns in as little as 3 years when incentive programs and favorable rate structures apply
  

• Ongoing Savings: A good-sized system can offset up to 100% of your grid energy use. This means significant monthly bill reductions.
  

• Price Stability: By generating your own electricity, you lock in a portion of your energy costs for years to come. This can shield your business from future rate hikes.

• Brand & ESG Benefits: Solar paneling showcases your commitment to sustainability, which can enhance your brand, satisfy investor targets, and attract eco-conscious clients.

How Toews Power Calculates Your Facility’s Current Energy Baseline

Before we design your solar energy system, we take the time to understand exactly what we’re offsetting. 

This process, calculating your facility’s energy baseline, means determining how much energy you use, when you use it, and what you’re paying for it. Doing this upfront ensures your system is sized for maximum savings and efficiency. 

Here’s how we establish your energy baseline:

• Collect 12 Months of Bills: We gather your electricity bills from the past year to account for seasonal variations in usage and costs. This full-year picture helps us capture summer cooling spikes, winter heating loads, and other seasonal patterns.
  

• Measure Usage & Costs: We record your total annual kWh and total annual energy spend. Many commercial bills also include demand charges based on the highest kilowatt demand in a billing cycle, we track these peaks and identify when they occur.
  

• Identify Patterns: We analyze your usage trends, pinpoint seasonal demand spikes, and review your demand charge history to help you optimize your usage. This helps us determine which loads could be reduced by solar solutions and where efficiency improvements could further lower costs.
  

• Set a Realistic Savings Target: With your baseline established, we model the potential cost reductions for your specific rate class. While some facilities can offset up to 80% of their electricity costs with solar, the exact percentage depends heavily on your Ontario rate category:

• Residential High Density (RHD), Residential Low Density (RLD), and General Service Electric (GSE): These classes typically see the highest offsets, often in the 70–80% range, because a greater portion of their load can be replaced with solar generation.

• General Service Demand (GSD): Offsets are usually around 33%, as demand charges make up a larger share of the bill.

• Class A Users: These are often better served by a behind-the-meter system (no export to the grid), targeting demand reduction rather than pure energy offset. Class A customers can also take advantage of the 50% Save on Energy Retrofit Grant and apply the Federal Investment Tax Credit (ITC) to the remaining balance.
  
  This savings target becomes the foundation for system design to ensure we fit the solar installation to deliver the best possible ROI for your specific rate class and operational profile. The exact sizing will be refined with a solar professional, but having this target is useful for initial planning.

How Solar Slashes Energy Bills

Once you know your energy baseline, it’s easier to appreciate how exactly solar power can slash those energy bills in half. 

Installing solar panel saves money in multiple ways:

• Net Metering (Offset Grid Consumption): Southwest Ontario (and many other regions) has net metering programs that make solar especially cost-effective.
  
  With net metering, your solar panels are connected to the grid, and any time you produce more power than your facility is using, the excess is sent to the grid, and you earn a credit on your bill.
  
  In essence, the utility acts as your energy bank. You only pay for the “net” difference between what you consume from the grid and what you produce and send back.
  

• Peak Demand Reduction: Many commercial customers pay hefty demand charges based on the highest kW demand in a month.
  
  Solar can help reduce these costs, but only if your facility’s peak demand occurs during daylight hours when the solar system is producing power. When those peaks align with solar generation, you can effectively “shave” the load seen by the utility and lower your demand charges.
  
  For Class A industrial customers in Ontario, producing power during the province’s peak hours also cuts your Global Adjustment (GA) fees for the following year.
  
  In short, when peak periods overlap with solar production, solar panels can both offset energy costs and reduce the high kW peaks that drive up your bills.
  

• Reduced Reliance on the Grid – Protection from Price Increases: Depending on your facility’s rate class, load profile, and how your peak demand aligns with solar production, you may be able to cut your grid consumption anywhere from a modest reduction to nearly zero.
  
  In cases where most of your energy use occurs during daylight hours, and your peak demand coincides with solar output, you can offset the majority of your electricity needs with on-site generation.
  
  By reducing or even eliminating grid purchases during these costly periods, you insulate your business from future rate hikes and the volatility of market-driven energy prices

• Load Alignment: Solar produces power during the daytime, generally from morning through late afternoon, which coincides with typical peak usage hours for businesses.
  
  By generating your own power during these expensive periods, you avoid buying high-cost electricity from the grid. 

Designing a Solar Energy System for Maximum ROI

Designing your solar system correctly is crucial to hitting that maximum savings target cost-effectively.

Toews Power approaches each project with careful engineering:

• Right-Sizing: Avoid overproduction (credits expire annually) and underproduction (missed savings). The ideal system will generate roughly what you consume (on an annual basis), no more, no less.
  

• Site Optimization: Evaluate how much suitable area you have for solar panels. Large, unobstructed rooftops or ground areas are a big asset.
  

• High-Quality Components: Use bankable brands with strong warranties and low degradation rates. High-efficiency solar panels can produce more power per square foot.
  

• Monitoring: Real-time system monitoring ensures you’re hitting your production targets.
  

• Future-Proofing: If you anticipate your facility’s energy use growing (maybe you plan to add new machinery or an HVAC upgrade later), you can design the solar system with some flexibility.
  

Affordable Solar Systems: Funding & Incentives in Southwest Ontario

One of the biggest reasons you can achieve energy cost reduction so quickly (within two years) is the wealth of funding programs and incentives available.

For businesses in Southwestern Ontario (and across the province), there are robust incentives that dramatically cut the upfront cost of solar and accelerate your payback. 

• Save on Energy Retrofit Program: Up to $860/kW or 50% of project costs, funded by Ontario’s IESO.

• Residential Incentives: You can receive $1,000 per kilowatt (kW) for energy efficiency upgrades, plus access to up to $40,000 in 0% interest financing through the Canada Greener Homes Loan to support energy-efficient home retrofits.
  

• Federal Clean Technology ITC: 30% refundable tax credit on eligible solar costs.
  

• Accelerated Depreciation (Class 43.2): Write off most of the investment quickly to reduce taxable income.
  

• Net Metering: Receive full retail credit for excess generation, carried over for up to 12 months.

How much does it cost to install solar panels

In Southwestern Ontario, commercial solar installations typically range from $1.00 to $1.80 per watt. The total project cost depends on factors like system size, site conditions, equipment selection, and installation complexity. 

Incentives such as the Save on Energy Retrofit Program and the Federal Investment Tax Credit (ITC) can significantly lower the net cost, reducing payback time and boosting ROI.

Risks, Pitfalls & How to Avoid Them

Like any major project, going solar has its risks and potential pitfalls. 

However, with proper planning and due diligence, you can mitigate these issues and ensure a smooth, successful solar installation that delivers the expected savings. 

• Choosing the Wrong Installer or Contractor: Watch for red flags such as unusually low bids or pushy sales tactics that gloss over technical details.
  
  A quality solar installer will be transparent, answer all your questions, provide a detailed proposal, and not shy away from specifics about hardware or expected challenges.
  

• Poor Sizing: Avoid over- or undersized systems. Clear communication of your goals will help the engineers plan accordingly.
  

• Structural Oversights: Conduct a thorough site feasibility study early. This includes a structural analysis of the roof and a shading study. For instance, not all sites are ideal. If your roof is in poor shape, it’s better to reroof before solar installation.
  

• Paperwork Delays: Incentives require pre-approval. If you have missing deadlines, it can cost you thousands and disqualify you for rebates.
  

• Neglected Maintenance: Check the monitoring portal weekly to ensure all inverters are working and output is normal. Do a yearly visual inspection. In Ontario, panels usually shed snow naturally, but you can clear them if safe for winter output.

Toews Power’s long-standing track record in solar systems means these risks are proactively managed.

Get Started Today with Solar Panel Services

Ontario’s current solar incentives and low equipment costs have created a window of opportunity for commercial and industrial facilities. 

By working with a proven partner like Toews Power, you can realistically achieve a significant energy cost reduction in under two years, all while improving your sustainability profile and insulating your business from volatile energy prices.

Ready to take control of your energy costs?
Contact Toews Power Solar Services for a comprehensive assessment and discover how much you could save. 

The sooner you start, the sooner you’ll see those savings on your bottom line.