IESO Conservation Fund: Ontario Energy Efficiency Grants

IESO Conservation Fund Ontario Government Funding for Energy Efficient Equipment

Energy conservation activities have long been linked to environmentalism, but the shifting economics of energy use, especially in Ontario, has led to many businesses “going green.” There is now a financial case to be made for investing in energy-efficient technologies; higher energy rates and increased global competitiveness are putting pressure on manufacturers and other energy-intensive industries to consider projects that lower energy consumption.

Fortunately, government grants such as the IESO Conservation Fund support energy conservation projects led by businesses, non-profits, and electrical utilities. Through the program, applicants can access Ontario government funding for clean technology (cleantech) and other projects that have a significant impact on overall energy consumption. Funding can offset a portion of costs and help Ontario entities complete projects sooner than would otherwise be possible.

The IESO Conservation Fund offers up to 50-100% of eligible project costs to a maximum contribution of $250,000-$1,000,000, depending on the project/stream proposed.

To access the IESO Conservation Fund, Ontario businesses and organizations must develop a comprehensive application that reviews their project in depth. This includes a review of the applicant, project feasibility, and overall impact to the applicant or Ontario’s energy system. Applications must be submitted during one of the program’s scheduled intake periods.

IESO Conservation Fund: Energy Reduction Grants Ontario

The IESO Conservation Fund offers Ontario government grants to support the strategic investments of Canadian businesses, non-profits, and electrical utilities. Through the program, companies can reduce the cost of energy efficiency projects and overcome the barriers to adopting innovative clean technologies.

Applicants may receive up to 50-100% of direct project costs to support energy conservation initiatives, such as strategic planning and purchasing/installing new equipment.

There are eight streams of funding available through the program. These include:

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  • Conservation Program
  • Conservation Tools
  • Training Programs
  • Community of Practice

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  • Strategic Research
  • Emerging Technology Development
  • Emerging Technology Demonstration
  • Strategic Opportunities


Conservation Program

Up to 75% of project expenses to a maximum $500,000. This supports the testing or revision of an energy conservation program (in part or in whole). Projects must contain an evaluation, measurement, and verification phase to be deemed eligible.

Conservation Tools

Up to 75% of project expenses to a maximum $500,000. This supports the development and assessment of a new management approach (such as an internal policy or standard) or tools to establish an actionable plan for energy conservation.

Training Programs

Up to 75% of project expenses to a maximum $250,000. This supports piloting targeted training programs to close skills gaps (leading to higher internal efficiencies).

Community of Practice

Up to 75% of project expenses to a maximum $250,000. This supports forming a self-sustaining network that shares information and best practices with industry partners.

Strategic Research

Up to 100% of project expenses to a maximum $100,000. This supports conducting a research study that identifies a project or program to be completed. The outcome of this research study would become a pilot project for the business to complete.

Emerging Technology Development

Up to 75% of project expenses to a maximum $250,000. This supports validating a process or technology’s potential and advancing its state of commercial readiness. At the end of these projects, the innovation should be at a pre-commercial demonstration stage.

Emerging Technology Demonstration

Up to 75% of project expenses to a maximum $500,000. This supports testing a pre-commercial technology in a real environment to demonstrate, measure, and verify the innovation.

Strategic Opportunities

Up to 50% of project expenses to a maximum $1,000,000. This supports large-scale pilot projects for projects with a high strategic impact. These projects cannot be completed at a smaller scale, and should attempt to influence the future of conservation programming. Projects are infrequently accepted to this stream, and most businesses would be better candidates for the streams described above.

Organizations Supported through the IESO Conservation Fund

Energy efficiency grants provided through the IESO Conservation Fund can be awarded to Ontario-based:

  • For-profit incorporated businesses;
  • Non-profit organizations;
  • Local distribution companies (LDCs);
  • Industry associations;
  • Educational institutions; and
  • Public sector organizations.

Conservation Fund grants will only be provided to Ontario-based organizations. Individuals and family households cannot apply for this program, but may be eligible to receive a variety of Save on Energy incentives.

Project Eligibility for IESO Energy Conservation Grants

To qualify for the IESO Conservation Fund, applicants must propose a project that aligns with one of the eight project categories noted above. In addition, projects should deliver solid energy conservation metrics, such as:

  • Energy Efficiency: The overall reduction in energy consumed while retaining a similar level of end-use service.
  • Demand Response: Demand reduction during peak hours, or shifting demand to hours when the grid is more available.
  • Conservation Behaviour: Limiting activities that are powered by electricity.
  • Load Reduction: Replacing common electric-powered equipment with alternatives that use a different fuel source, such as solar or geothermal heating/cooling.
  • Load Displacement: The business will generate electricity onsite, behind the meter, to reduce energy consumption from the grid. This must have a net efficiency to the business (i.e. more energy is produced than consumed by the process) and not be fueled by coal, diesel, or any source not allowed by IESO.

IESO Conservation Fund: Successful Applicants

Some past projects that were successfully awarded funding from the IESO Conservation Fund include:

  • ArcelorMittal Dofasco Industrial Lighting/Cooling: Canada’s largest producer of flat carbon steel completed two IESO Conservation Fund projects. One focused on the demonstration of new LED lighting fixtures that produce less heat than metal halide lighting (HID). The company’s other project focused on the development of a new variable-speed fan to keep motors cool. Typically, these fans provide fixed-flow which is effective, but not energy efficient.
  • Horizon Utilities Conservation Marketing: Electrical utilities often market energy-saving incentives to their customers, but this method has rarely been driven by actual energy use data. Horizon Utilities used the IESO Conservation Fund to change this and ultimately improve their marketing efforts. With support from a geographic information system (GIS), the utility mapped where energy was being used the most. Horizon could then selectively market to these customers, reducing the cost of marketing projects and optimizing their customers’ experience.
  • Toronto Zoo Air Conditioning: The Toronto Zoo has significant cooling requirements, not only for the benefit of employees and customers, but also for certain animal exhibits to thrive. To improve the efficiency of their cooling systems, Toronto Zoo invested in Ice Bear technology. Ice Bear is a rooftop technology that generates ice in the evenings when rates are lower, then uses the ice to optimize system efficiency through the day when rates are higher.

Apply for IESO Conservation Fund Energy Reduction Grants

To apply for the IESO Conservation Fund, eligible organizations must complete a two-stage application process that includes a:

  • Project Overview: A high-level overview of the project to be considered for funding. This is a screening stage meant to only move eligible projects ahead to the full application. Project overviews can take approximately four to six weeks to review from the deadline, at which point applicants are notified of the decision.
  • Full Proposal: If invited to submit a full proposal, applicants are required to prepare a much more detailed review of the project, organization, and proposed budget. This is reviewed and used to determine whether an applicant receives funding, and what the contribution level will be. This phase can take upwards of two to three months.

To discuss your eligibility for the IESO Conservation Fund and explore ways to optimize the government funding application process, please contact Mentor Works.

Funding Funding Now, Contact Mentor Works

Posted: March 18, 2016 by Jeff Shepherd. Updated: June 15, 2018 by Jeff Shepherd.

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