Through its Save on Energy program, the provincial government of Ontario offers various grants and incentives to households and businesses located within the province. The purpose of this article is to cover the current Small and Medium Enterprises (SMEs) grants and incentive programs.

The current Save on Energy business incentive programs are: (1) The Energy Retrofit Program, (2) the Energy Performance Program, and (3) the Industrial Energy Efficiency Program.

It was launched in 2011 and has helped over 250,000 homes and businesses in all sectors across Ontario reduce their energy use through energy-efficient opportunities and resources. Since its introduction, Save on Energy has saved nearly 16 terawatt-hours (TWh) of electricity.

Energy Retrofit Program

Retrofitting your business’s old equipment for energy efficiency is encouraged through this program. Retrofits are available under three streams: (1) Lighting, (2) HVAC, and (3) Manufacturing.

Amount of Funding:

To a maximum of $1,000,000 per project, this program provides 50% of eligible project costs.

Program Eligibility:

Owners and lessees can receive retrofit incentives for:

  • Spaces or buildings used for commercial purposes, such as offices, retail stores, restaurants, hotels, and warehouses;
  • Food and beverage, automotive, plastic, steel, mining, paper, and chemical industry facilities;
  • Buildings used by institutions such as hospitals, universities, and municipalities;
  • Buildings with multiple units, such as apartments (including social housing) or condominiums
  • A wide range of agricultural facilities, including dairy, pig, and poultry farms, greenhouses, and nurseries.

Eligible Projects:

It is generally only retrofit projects that reduce peak electricity demand and consumption in a sustainable, measurable and verifiable way that are eligible for the retrofit program.

Examples of eligible projects include:

  • Lighting retrofits
  • Lighting controls
  • HVAC redesign
  • Chiller replacement
  • Variable-speed drive installations

When To Apply for the Energy Retrofit Program:

The deadline for submitting and approving program applications is December 31, 2024. By December 31, 2025, projects that have been approved for funding must be completed.

Learn more about the Energy Retrofit Program.

Industrial Energy Efficiency Program

For large businesses in the industrial sector in Ontario, this program provides funding for large projects that reduce energy consumption.

Amount of Funding:

A large, complex industrial energy-efficiency project can receive up to $75,000 in financial incentives under this program.

Eligible Businesses:

  • Industrial facility owners or operators in Ontario;
  • Industrial facilities in Ontario that are owned and operated by third parties.

Eligible Projects:

The following criteria must be met by all projects eligible for funding through the Industrial Energy Efficiency Program:

  • Energy-efficiency improvements applied to, or supporting, industrial processes;
  • The minimum electricity savings should be 2,000 MWh per year (which represents a reduction of at least 15% of the baseline electricity consumption of the relevant industrial process); and
  • Utilize commercially available technology that does not fall outside of program eligibility.

What is the deadline for apply for the Industrial Energy Efficiency Program?

It is expected that applications will open on October 1, 2022, and close on August 15, 2023, for the second round of funding for this program. It is anticipated that awards will be made in late 2023 to projects that have been approved in the second round of applications. A future intake of this program will be announced later.

Learn more about the Industrial Energy Efficiency Program.

Energy Performance Program

As part of this program, financial incentives will be provided for long-term improvements in operational and maintenance energy efficiency, as well as equipment upgrades through a multi-year, pay-for-performance incentive structure. During the eligible timeline of the project, this program offers a one-time payment for pre-project energy usage, as well as a Pay-for-Performance Period.

Pre-Project Funding:

Receive a one-time advance payment based on your anticipated Performance Incentive, calculated as follows:  Baseline Energy Consumption * 2.5% * $0.04/kWh.

Project Funding:

Your Performance Incentives must be calculated for each Pay-for-Performance Period as follows: 

  • Energy Incentive Rate of $0.04/kWh multiplied by the Electricity Savings; and 
  • Peak Demand Incentive Rate of $50/kW multiplied by the Peak Demand Savings. 

When to Apply for the Energy Performance Program

All applications must be approved by December 31, 2024.

Learn more about the Energy Performance Program.

Get to more about Canadian government funding programs by downloading a free copy of our Navigating the Funding Process slide deck to learn more about applying for funding in-house, research support, and technical writing support.

Mentor Works is a business support organization specializing in Canadian government funding. The Ontario-based business has helped hundreds of businesses build and execute their funding strategy through a mix of federal and provincial government grants, loans, and tax credits. Mentor Works offers free online resources, funding webinars, and news via their website at www.mentorworks.ca.

Author: Matt Mongeon

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