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IESO commits $342M to energy-efficiency retrofit programs

Funds will go to businesses , greenhouses, certain regions of Ontario and smart thermostat users

The Independent Electricity System Operator will allocate an additional $342 million on energy-efficiency incentives across Ontario, including support for parts of the province facing electricity congestion. (Courtesy Independent Electricity System Operator)

Ontario's Independent Electricity System Operator (IESO) plans to contribute $342 million for its retrofit incentive program geared toward businesses, including new initiatives for greenhouses, targeted areas of Ontario and smart thermostat users.

The programs are part of the Ontario government’s 2021-2024 Conservation and Demand Management Framework, which has received approximately $1 billion in funding. It is expected to achieve 725 megawatts of peak demand savings, 3.8 terawatt-hours of electricity savings and cut three million tonnes of greenhouse gas emissions over its lifetime.

IESO director of energy efficiency Tam Wagner told SustainableBiz the retrofit program now accommodates customization, and sets out a list of technologies which are eligible for the incentive.

“These energy efficiency programs are fantastic. They’re one of the most cost-effective resources for the electricity grid,” Wagner said. “As a system planner, as a system operator, it ensures we can maintain reliability so that consumers can have power wherever and whenever they need it.

"And it’s really great in that it also helps consumers from a business perspective in terms of making their business more competitive, more comfortable.”

How the business retrofit program works

The Save on Energy Business Retrofit Program received $136 million, which funds up to 50 per cent of the cost of custom energy-efficiency programs, according to a release.

Previously, the IESO only allowed rebates for measures it deemed eligible under the retrofit program. But businesses were left unsatisfied, Wagner said, because they wanted to save energy in ways that do not fit neatly into set solutions.

“What they asked for was a program where they customize what their savings are within their organization and be able to give back to the grid in that regard, while at the same time making their business be more competitive.”

The custom program is “available for almost anything” that achieves energy savings, she said, from lighting to HVAC systems to weatherization.

Though any business can tap into the funding, it is intended for larger businesses because it offers incentives on the kilowatt scale, which require more resources to measure accurately.

Small businesses would be a better fit for IESO’s other retrofit programs, Wagner suggested. They are more streamlined and simplified while specifying certain technologies like lighting and smart thermostats.

Funding for retrofits will be open until the end of 2024.

Support for greenhouses, regions of Ontario and smart thermostat control

The announcement also includes a focus on three areas of particular interest.

The Retrofit for Greenhouses recognizes their “significant” growth in Ontario, Wagner said.

IESO says energy use in the greenhouse sector in Southwest Ontario is expected to balloon from about 500 megawatts today to approximately 2,000 megawatts in 2035. Greenhouses are electricity-intensive and unique due to their lighting and irrigation systems. To IESO, it's an opportunity to support economic development and maximize energy efficiency.

Wagner said $136 million has been allocated for the greenhouse program.

The Local Initiatives Program offers a double incentive for retrofit programs (except for lighting) in parts of Niagara, Kingston, South Huron Perth, Pembroke and Kenora. It is available until Oct. 3 with more target areas to be revealed this summer.

IESO says these are areas of the province where the transmission grid is congested, which Wagner attributed to increasing demand. The alternative is building more expensive, time-consuming infrastructure, so IESO opted for retrofits to defer that investment.

The Peak Perks program offers a $75 incentive (plus $20 for each year they remain in the program) for residential customers with smart thermostats to reduce electricity use during periods of peak summer demand.

Customers give their thermostat manufacturer control over their smart thermostat, which can automatically lower temperatures by two to four degrees Celsius to reduce home energy consumption.

IESO says residents will be informed when the changes happen. Customers can opt out of any of the 10 temperature change events each year without impacting their incentive and can leave whenever they desire.

What’s in store for IESO

As for what is next from IESO, Wagner said the Ontario energy operator plans to launch a building commissioning program by the summer.

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