IESO Conservation Fund: How to Qualify for Energy Management Grants

The IESO Conservation Fund is an Ontario government funding program that helps businesses better manage and reduce electricity consumption through innovative projects. This includes, but is not limited to, the development and piloting of energy conservation programs, tools, training, and technologies. Interested parties can apply for funding during one of the program’s scheduled intake periods; there are typically multiple intakes offered each year.

Conservation Fund applicants may receive up to 50-75% of the project’s eligible costs to a maximum $100,000 – $500,000 in energy technology funding. Specific amounts depend on the type of project completed.

To qualify for funding through the IESO Conservation Fund, applicants must be an incorporated non-profit or for-profit entity, plan to develop or pilot innovative energy programs, practices, and technologies, and have the financial and management capacity to carry out the project to completion. Other eligibility criteria apply; continue reading this article to learn if the program is a good fit for your organization.

What is the Ontario IESO Conservation Fund?

Provided by Ontario’s Independent Electricity System Operator (IESO), the Conservation Fund offers non-repayable contributions (government grants) to support businesses and non-profits that take an innovative approach to energy conservation and demand management. Many businesses have already used to fund to make sustainable changes that benefit their profitability and lessen their impact on Ontario’s energy grid.

By placing an enhanced focus on energy reduction and management, applicants can receive non-repayable contributions of up to 50-75% of project costs.

Eligible applicants are encouraged to apply for funding during one of its defined intake periods. Typically, the program extends multiple application intakes per year and supports application intake for a month at a time. Interested businesses and non-profits should proactively seek information on upcoming intakes and apply ahead of their project start date. For a more detailed look at the program and application process, please read Mentor Works’ IESO Conservation Fund overview blog.

Applicant Eligibility for IESO Energy Conservation Funding

There are a wide range of organizations that can apply for the IESO Conservation Fund. This includes Ontario-based:

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

Ineligible IESO Conservation Fund Applicants

Alternatively, individuals (including incorporated individuals and sole proprietorships) are not eligible to receive energy conservation funding.

Project Eligibility for the IESO Conservation Fund

Projects well-aligned to the program will seek to transform the market and be a catalyst for large-scale change, either within the company or across Ontario. IESO Conservation Fund projects can span up to 36 months in duration and focus on seven areas including:

1. Conservation Programs

• Project Types: Testing or revision (in part or in whole) of an energy conservation program. Projects must contain evaluation, measurement, and verification phases.
• Funding Contribution: Up to 75% of project expenses to a maximum $500,000.

2. Conservation Tools

• Project Types: Development and assessment of new management approaches (such as an internal policy or standard), or tools to establish an actionable plan for energy conservation.
• Funding Contribution: Up to 75% of project expenses to a maximum $500,000.

3. Training Programs

• Project Types: Piloting targeted training programs to close internal skills gaps. The training provided must lead to higher efficiency as result of better practices.
• Funding Contribution: Up to 75% of project expenses to a maximum $250,000.

4. Community of Practice

• Project Types: Forming a self-sustaining network that shares information and best practices with industry partners.
• Funding Contribution: Up to 75% of project expenses to a maximum $250,000.

5. Strategic Research

• Project Types: Conducting a research study that identifies a project or program to be completed. The organization must have an actionable pilot project following the conclusion of this research.
• Funding Contribution: Up to 75% of project expenses to a maximum $100,000.

6. Energy Conservation Technology Demonstration

• Project Types: Testing a pre-commercial technology in a real environment to demonstrate, measure, and verify the innovation.
• Funding Contribution: Up to 75% of project expenses to a maximum $500,000.

7. Strategic Opportunities

• Project Types: Large-scale pilot projects for projects with a significant strategic impact. Projects 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.
• Funding Contribution: Up to 50% of project expenses with no set maximum contribution.

Required Project Outcomes

Projects that are well-positioned for Conservation Fund success will align with one of the above categories, while also providing the benefits below. Applicants should ensure that their project produces a favourable outcome, such as:

• Energy Efficiency: Reducing electricity consumption while retaining a similar level of end-use service. Energy efficiency is the gain realized from using more energy-efficient equipment, processes, and buildings.
• Demand Response: Reducing electricity demand during peak hours, or shifting some demand to off-peak hours.
• Conservation Behaviour: Reducing electricity consumption by scaling back an activity that uses electricity.
• Load Reduction: Switching common electric equipment away from using electricity to use another fuel source such as geothermal or solar heating or cooling. For example, instead of using an electric hot water heater, use a solar hot water heater.
• Load Displacement: Generating electricity by an onsite, behind-the-meter project driven by a primary energy source of process waste heat, waste power, waste by-product, or waste gas. Such applications must have a net efficiency benefit to the user and must not be fueled by diesel, coal, or any other fuel disallowed by the OPA.
• Efficient Electrification: Converting to electricity as a fuel source for equipment, processes, or buildings while minimizing overall consumption and/or peak demand impacts. Electrification of vehicles is not considered for this category.
• System Integration: Managing multiple loads and/or other behind-the-meter energy resources to produce a net energy efficiency benefit and/or reduce peak demand.

Projects Ineligible for the IESO Conservation Fund

Some projects are not a good fit for the Conservation Fund. These include projects that:

• Focus on the research, development, and demonstration of transmission, distribution, and electricity generation technologies, and
• Provide a net-positive greenhouse gas emissions impact.

IESO Energy Efficiency Grants: Expense Eligibility Criteria

IESO Conservation Fund project budgets must comprise eligible expenses, including:

• Project-specific materials, equipment, products, and services;
• Salaries and benefits of employees directly involved in the design, selection, purchase, and installation of the project;
• Engineering, scientific, technical, management, and contracting services, including training;
• Permits and license fees;
• Funding for marketing, communications, and workshops directly related to project activities;
• Costs associated with the monitoring, verification, and evaluation of the project’s impacts, including data collection, processing, analysis, and management; and
• Equipment and products, including diagnostic and testing tools and instruments and associated software.

Expenses Ineligible for Ontario Government Funding Contributions

Conservation Fund contributions will not support ongoing expenses or costs associated with:

• Activities completed or costs incurred before the funding is approved;
• Costs over $50,000 for any single consultant or contractor that has not been selected through a competitive process;
• Costs associated with the purchase of real estate;
• Any overhead costs generated by the lead applicant or third parties, such as operating costs related to general maintenance and repair;
• Hospitality and incidental or food expenses 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.

How to Apply for the IESO Conservation Fund

Are you an eligible applicant with projects and project expenses that fit the IESO Conservation Fund’s mandate? If so, consider using your upcoming project to apply for funding. There is a two-stage application process required to access funding, so apply well ahead of your project’s start date to ensure the process can be completed and your application approved prior to incurring funding-eligible expenses.

To get started, applicants must prepare a Project Application template. This serves as a basic overview of your organization and proposed project, and enables IESO to provide a filter for projects that are either likely or unlikely to be approved for funding. If called forward to the next stage, applicants must develop a comprehensive project proposal complete with an exhaustive project budget, milestones, and intended project impacts. This is used to determine approval into the program and can take up to two months to be reviewed. Upon review, applicants receive notification of the funding decision and can kick-off their project.

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