Ontario offers bonus incentives on retrofits

Ontario offers bonus incentives for retrofits

New conservation programs and time-limited specials unveiled for Q2 and Q3
Tuesday, May 2, 2023

Bonus incentives for energy efficiency upgrades will be available to select commercial and multifamily landlords and condominium corporations in Ontario during the second and third quarters of 2023. Project proponents in Niagara Region, Kingston, Pembroke, Kenora and some mostly rural areas of Huron and Perth counties can qualify for double the usual incentive dollars for non-lighting prescriptive measures if they submit applications to Ontario’s Save on Energy program by October 3.

Meanwhile, the looming reintroduction of the custom track retrofit program will come with a province-wide boost to the funding ceiling since it was last offered in 2020. The payout has been set at $1,200 per kilowatt (kW) or $0.13 per kilowatt-hour (kWh) of achieved savings for both non-lighting and lighting projects. However, the latter is scheduled to be short-lived, lasting only until a planned shift to point-of-purchase subsidies occurs later this fall.

“Take advantage of these incentives for lighting now because we’re expecting to introduce the midstream lighting program in Q4 this year,” Rob Edwards, private sector business manager with Ontario’s Independent Electricity System Operator (IESO), urged last week during a webinar sponsored by the Building Owners and Managers Association (BOMA) of Greater Toronto. “What that means is lighting will no longer be part of either the prescriptive or custom retrofit program.”

That’s part of a slate of adjustments set for the final half of the 2021-24 conservation and demand management (CDM) framework, many of which are related to an additional $342 million in program spending that the Ontario government pledged last September. The time-limited bonus incentives for the five specified areas where the electricity transmission network is deemed to be “constrained” were announced in early April, while the custom retrofit program is to be formally relaunched on May 17.

“We are looking at increasing savings, both in megawatts (demand) and in energy by the end of the framework,” Edwards reiterated.

Customized retrofit options and building commissioning program coming soon

The scope of retrofit program was narrowed solely to prescriptive measures with incentives tied to a specified list of energy-efficient products and equipment beginning in 2021, in an effort to simplify and speed up approval of applications. The IESO’s midterm review of the 2021-24 CDM framework, released last December, credits that move for cutting the program’s administrative costs by “nearly 50 per cent on a per-kWh basis” but also cites “customer dissatisfaction” with the disappearance of the customized retrofit option among its key findings.

In announcing the pending relaunch of the program, the IESO states: “This will enable the program to incent more energy-efficiency measures in non-standard projects that are more reflective of actual operating conditions, and to capture more savings.” Along with a more lucrative incentive rate, the new version will no longer impose a $1 million maximum per project, provided the incentive covers no more than 50 per cent of project costs. As well, project proponents will not be required to submit a measurement and verification (M&V) plan unless they receive at least $80,000, providing more room to manoeuvre than the previous $40,000 threshold.

In an associated change coming into effect May 17, the incentive structure for networked lighting controls will switch from $0.15 per square foot to $0.35 per kWh. Looking past May, incentives to promote commissioning/retro-commissioning of existing buildings — initially intended to be rolled out in 2022 — are now promised for June.

The IESO has a program administrator in place and is currently recruiting qualified delivery agents to guide enrollees through the three components of the commissioning program. Participating owners/managers can receive: an investigative incentive of up to $50,000 for the commissioning agent’s review and recommendations; an incentive of up to $50,000 based on a formula of $0.03 per kWh of confirmed energy savings for implementing the recommended energy-saving measures; and a further incentive of $0.03 per kWh to a maximum of $50,000 for maintaining those savings for a full year.

“In order to participate in the program, you must go through an approved commissioning partner,” Edwards advised. “We’re looking at getting 20 to 50 commissioning agents on board.”

Regional adders, targeted local initiatives and recruitment for capacity building

Time-limited bonus incentives — which the IESO has dubbed “regional adders” — could be extended to more areas of the province as the year progresses. For now, commercial electricity customers (including multifamily landlords and condominium corporations) in 35 specified postal code districts are eligible. The 20 within Niagara region encompass several cities and towns, including Niagara Falls, St. Catharines, Thorold, Welland, Fort Erie, Port Colborne, Grimsby, Dunnville and Beamsville. Elsewhere, bonus incentives are on offer in St. Marys, Kingston, Amherstview, Gananoque, Pembroke, Petawawa, Kenora and Keewatin.

The regional adders are separate from other targeted local programs, which have either recently been launched or are expected to be deployed in the coming months. They are meant to respond to concerns about electricity system stability in four areas of the province: the Richview community in the west end of Toronto; York Region; Ottawa; and the Belle River area of Windsor-Essex, and will be a collaborative effort of the IESO and the pertinent local distribution company.

Edwards also made a pitch for the recently launched strategic energy management program, suggesting that there is still plenty of time for companies and their designated staff representatives to join the envisioned capacity-building exercise. Ultimately, IESO administrators foresee as many as 10 groups, each geared to a particular type of facility such as office, multifamily, grocery-anchored retail, etc.. Participants will be eligible for incentives of $0.02 per kWh of energy savings implemented and up to $5,000 to invest in energy management tools.

“We no longer provide incentives for an organization to hire an energy manager, but this is the next best thing,” Edwards asserted. “The basis of it is: education; training; best practices; and tools. We want these practitioners to hang out together and share best practices. There’s going to be a ton of training available and we’re really excited to see this.”

One thought on “Ontario offers bonus incentives for retrofits

  1. Incentives such as this will be a crucial component in addressing the urgent need for retrofitting existing buildings to reduce carbon emissions and address the climate crisis. Governments and building owners should prioritize retrofitting as a key component of their climate action plans, and work towards implementing effective policies and funding mechanisms to support these efforts.

Leave a Reply

Your email address will not be published. Required fields are marked *