The IESO Conservation Fund program supports innovative energy conservation projects that reduce a business’ demand for Ontario’s public energy. This includes the purchase and installation of energy-efficient technologies, or the development and initiation of internal energy management programs.

Through the program, companies may receive up to 50-100% of eligible expenses to a maximum of $250,000-$1,000,000 in Ontario small business grants. The Independent Electricity System Operator Conservation Fund grants support the development and piloting of innovative processes and technologies that stimulate provide significant energy savings for commercial, residential, and industrial energy users.

This article will help provide answers to most of your questions regarding the IESO Conservation Fund program.

IESO Conservation Fund Clean Technology Grants

What are the program’s objectives?

The IESO Conservation Fund aims to limit the impact of users on Ontario’s public energy grid. The program will do this by:

Supporting the research and development of clean technologies;
Assisting for-profit and non-profit organizations to carry out innovative conservation projects; and
Reinforcing Ontario’s energy planning and procurement processes that lead to improved conservation efforts.

How much funding could my business potentially receive through the program?

Contribution amounts are dependent upon which program stream your business’ project falls into. The following list will provide insight into the maximum funding contribution for each eligible stream:

Conservation Program: Up to 75% of project expenses to a maximum contribution of $500,000.
Conservation Tools: Up to 75% of project expenses to a maximum contribution of $500,000.
Training Programs: Up to 75% of project expenses to a maximum contribution of $250,000.
Community of Practice: Up to 75% of project expenses to a maximum contribution of $250,000.
Strategic Research: Up to 100% of project expenses to a maximum contribution of $100,000.
Emerging Technology Development: Up to 75% of project expenses to a maximum contribution of $250,000.
Emerging Technology Demonstration: Up to 75% of project expenses to a maximum contribution of $500,000.
Strategic Opportunities: Up to 50% of project expenses to a maximum contribution of $1,000,000.

IESO Conservation Fund Eligibility Factors

Who is eligible to receive grants through the IESO Conservation Fund?

Ontario-based for-profit businesses and non-profit organizations with 2 or more employees may be eligible to receive small business grants through this program. Applicants must have a strong project proposal outlining the energy conservation benefits of their product, process, or program.

Local distribution companies, tech-focused companies, academic institutions, industry associations, and public sector organizations are ideal candidates.

What project outcomes will be considered for grant funding?

Projects must deliver one of the following outcomes to be accepted into the IESO Conservation Fund:

Energy Efficiency: Reducing the amount of energy needed during operation while retaining production levels.
Demand Response: Being able to reduce or shift energy use during peak hours.
Load Reduction: Switching from electricity-based equipment to machinery that uses alternative fuel sources.
Load Displacement: Generating electricity behind-the-meter to preserve Ontario’s public energy grid.
Conservation Behaviour: Scaling back activities that are traditionally powered by electricity.

What types of projects are eligible to receive grants from the IESO Conservation Fund?

The program only considers innovative projects that develop and/or pilot new or unique conservation programs, processes and technologies. These projects must lead to energy conservation and cost-effectiveness within Ontario.

Projects must involve one of the following themes:

Conservation Program: Improve an existing or create, test, and evaluate a new conservation program element.
Conservation Tools: Develop and assess a new, innovative energy management tool or approach.
Training Programs: Pilot a new training program to address gaps in workforce skills gap. Programs must possess the potential to become a new capacity building initiative.
Community of Practice: Form and manage a self-sustaining network to share information and best practices.
Strategic Research: Conduct a research study to explore an innovative project or program concept. Researchers must develop a business case to implement as a pilot project.
Emerging Technology Development: Demonstrate, measure, and evaluate emerging technologies and processes that can be tested in a real-world scenario.

Which project expenses are covered by Ontario small business grants?

The IESO Conservation Fund will provide Ontario government funding to cover internal labour/payroll costs, contractor fees, software and equipment purchasing, and marketing expenses.

Specific expenses may include:

Project materials and equipment purchasing;
Payroll for employees directly involved in the project (max. of $800 per day)
Third-party training programs;
Permits and license fees; and
Monitoring, verification, and evaluation of the project’s energy conservation impacts, including data collection, processing, analysis, and management.

What projects are ineligible to receive funding through the IESO Conservation Fund?

Project applications that are focused on research, development and demonstration of transmission, distribution, and electricity generation technologies (ex: solar photovoltaic, wind, bioenergy, and waterpower initiatives) are not eligible to receive Ontario small business grants through this program.

What project activities are not eligible to receive IESO grants?

The following project expenses are not eligible to receive IESO Conservation Fund grants:

Any costs incurred prior to funding approval;
Costs over $50,000 for any consultant or contractor that was not selected through a competitive process;
Overhead expenses generated by a lead applicant or third parties, including any operating costs related to general maintenance and repair;
Real estate expenses;
Hospitality and incidental or food expenses incurred for the project team;
Hospitality or travel costs not in compliance with the Government of Ontario’s Travel, Meals and Hospitality Expenses Directive;
Budget deficits; and
Any costs not directly related to the achievement of the project’s objectives as defined in the contribution agreement between the IESO and the applicant.

Will my business need to provide proof or revenue to be considered?

The IESO Conservation Fund does not require applicants to provide proof of revenue during Stage 1 applications. If the IESO invites an applicant to submit Stage 2 of the application process, financial statements will be required.

Pre-revenue businesses may only be considered for funding if they present a highly innovative idea that meets the program’s objectives.

Applying and Receiving Grants from the IESO Conservation Fund

When is the ideal time to apply for program funding?

Application intake is on a continuous basis until program resources are exhausted. Therefore, applicants may submit proposals throughout the year.

To maximize the amount of funding that can be received, it’s ideal to apply for the program at least 4-6 months prior to the beginning of your project. This will help ensure the application is approved prior to any expenses being incurred.

How should my business apply for the program?

Businesses with suitable projects may submit a Stage 1 application to the IESO; this includes a 5-7 page project overview and a formal project proposal.

Stage 2 applications are submitted by request only and must include a project budget, recent business financial statements, and CVs of the project team.

Mentor Works’ team of Government Funding Planners™ can provide support with application process by understanding your project and aiding the preparation of the technical application with you.

How will my application be evaluated? How long will it take?

Projects will be awarded funding based on how effectively they serve Ontario’s electricity conservation initiatives and what impact the project will have on energy conservation.

Stream 1 applications can take between 2-3 months to review and approve. Upon invitation, candidates will submit a second application that may take 2-4 more months before gaining approval.

Can I apply to the IESO Conservation Fund if this project is already receiving government funding?

Multiple Canadian government funding programs can be used to offset energy efficiency projects. Although other sources of government funding can be accessed, funding sources cannot be used to offset the same tasks supported by the IESO Conservation Fund. Several funding programs can be used if the same government incentive isn’t used multiple times towards the same project and provincial funding isn’t leveraged with another provincial funding program.

Once approved, what are my responsibilities moving forward?

This is determined on a case-by-case basis. The IESO will determine whether or not your business must conduct any follow-up reporting during any negotiations conducted with the applicant.

When can my business expect to receive a funding contribution?

This is determined on a case-by-case basis. However, financial support will only be provided to recipients of the Conservation Fund upon execution of the contribution agreement between the applicant and the IESO, and only according to the specified terms and conditions therein.

Additionally, funding contributions may be paid as a lump sum, or through smaller instalments depending on the terms and conditions set by the Grant Award Committee.

When can my business commence the project?

Its recommended that businesses wait to commence their project until a funding contribution has been approved by IESO. This process can take approximately 4-6 months.

Projects already in the process of completion may still be considered, however its funding potential is reduced one expenses are incurred pre-approval. This makes the expense ineligible for Ontario government grants.

If you have any further questions regarding the IESO Conservation Fund, please contact Mentor Works.

IESO Conservation Fund FAQs for Energy Efficiency Projects