A brief look at Ontario’s energy saving incentive programs

Energy consumption represents a significant operational cost for building owners and managers, accounting for up to 30 per cent of total operating expenses. As such, energy savings have long been a top agenda item for building owners and managers.

With the escalating energy costs and rising demand for energy efficient buildings, property owners, tenants, and investors have become increasingly aware of both the social and economic benefits to be gained from energy saving initiatives. Not only can investments in building efficiency increase a property’s asset value and profit, but demonstrating responsible environmental stewardship can also contribute to a positive public image and investment appeal.

Governments have followed suit with a range of incentive programs to encourage additional energy saving practices. There are a number of Ontario-based programs designed to support stakeholders in their efforts to improve energy efficiency. From retrofit incentives and training programs to instant rebates, there are multiple opportunities for building owners and managers to find even more ways to increase profitability and property value, reduce environmental impact, and enhance occupant comfort.

Save on Energy Retrofit Program

This program provides financial incentives for businesses to upgrade equipment and speed up payback on energy-efficient equipment. Eligible properties include offices, retail and grocery stores, industrial facilities, restaurants, hotels and warehouses, institutional buildings, agricultural facilities, and multi-family buildings, such as apartments (including social housing) or condominiums.

Eligible projects are those that provide sustainable, measurable, and verifiable reductions in peak electricity demand and consumption. Incentives are available for a range of products and technologies such as lighting controls, HVAC redesign, chiller replacements, variable-speed drive installations, and custom equipment retrofits.

Financial incentives are provided through three streams:

• Custom Stream – This stream provides financial incentives for businesses to undertake larger, more complex retrofit projects, which are more reflective of the participant’s actual operating conditions.
• Prescriptive Stream – The prescriptive stream focuses on commonly used products and technologies and is suitable for more typical upgrades of equipment.
• Greenhouse Stream – This applies to horticulture lighting, both top lighting and inter-lighting, and advanced lighting controls for greenhouses across the province. In addition, incentives are available for greenhouses in the Southwest region of the province for Distributed Energy Resources (DERs), including incentives for photovoltaic (PV) systems in combination with battery storage.

The Save on Energy Retrofit program is also offering an incentive of $860/kW AC for the installation of large solar photovoltaic (PV) systems for businesses in Ottawa.

Strategic Energy Management Program

The Strategic Energy Management (SEM) Program is a two-year cohort-based learning model for small groups of professionals across Ontario. The curriculum includes energy savings-related training on organizational practices, policies, and processes.

Through the SEM program, participants can gain knowledge, expertise, and training in energy management to help their organizations reduce energy costs, improve their organizational skills, and achieve their carbon reduction and environmental goals.

To qualify, the organization must be an owner or operator of an industrial, commercial, or institutional facility located in Ontario, and have a minimum electricity consumption of 3,000,000 kWh in one year.

There are three components of the program:

1. Facilitated peer learning opportunities, including regular webinars and other collaborative events
2. Dedicated support, including one-on-one coaching
3. Online energy management resources, including case studies, etc.

Participants will also receive incentives of $0.02/kWh of electricity savings for implementing eligible measures. In addition, they are eligible for financial incentives for energy savings and for purchasing management tools that do not receive incentives from another Save on Energy or Ontario ratepayer-funded program.

For example:

• A participating organization that achieves 200,000 kWh of savings in year one and additional savings of 300,000 kWh in year two would receive a total of $10,000 in performance incentives – $4,000 for year one and $6,000 for year two.
• Additional incentives for energy management tools such as meters and testing kits up to a value of $5,000, are available to participants who reach key program milestones.

Energy Performance Program

The Energy Performance Program (EPP) rewards customers engaged in making behavioural and operational changes that support capital investment projects and enable them to grow their energy savings year over year.

The program is based on a pay-for-performance model that encourages whole building energy performance improvements, as well as peak demand reduction. Capital and non-capital energy-efficiency measures are rewarded at the same incentive regardless of the types of projects/activities they have implemented.

Electricity savings are determined by comparing metered consumption to an organization’s baseline energy model.

Participants must:

• Be owners and/or operators of commercial, institutional, or industrial facilities located in Ontario
• Commit to participate for three years as well as commit to realize a minimum of five percent energy savings per facility within two years
• Have a minimum annual consumption of 1,500,000 kWh per facility (or group of up to five buildings aggregated into a single facility baseline energy model)
• Have 12 months of hourly interval meter data for each facility.

Instant Discounts Program

With the Instant Discounts Program, organizations can receive instant, point-of-sale discounts on the purchase of energy-efficient lighting products that will help to lower their energy consumption. Instant, point-of-sale discounts are available for existing commercial, agricultural, industrial, institutional, and multi-residential buildings through participating distributors/dealers.

We have a wide knowledge of the real estate and construction industry, and considerable hands-on experience in advising general and niche contractors, property management companies, private developers, and landlords owning residential, industrial, and commercial properties. If you have any questions or need further information, please reach out to the Real Estate and Construction group at Fuller Landau.

About the author 

Matthew Downey, CPA, CA, CBV, CFF, is a Partner in our Valuations team and a member of the real estate and construction group at Fuller Landau. He can be reached at 416-645-6513 or mdowney@fullerllp.com.