Ontario IESO — XLerate Program (Save on Energy)

Insider Tip

Apply for the Project Feasibility Study (PFS) funding first — IESO covers 50% of the study cost and the study is typically required for larger projects anyway. The PFS not only reduces upfront risk but also creates a documented technical baseline that strengthens your full XLerate application. Critically, you must apply before signing any purchase agreements for project equipment; retrospective applications are ineligible. If your facility is in a grid-constrained local area, confirm this with your local distribution company (LDC) before applying — the $450/MWh rate vs. $300/MWh can substantially change the project economics. Projects must achieve at least 50% of anticipated savings to receive any incentive payment, so conservative savings estimates with solid M&V plans are advisable.

Rejection Pitfalls 5

• Application submitted after a binding purchase commitment was signed for project equipment
• Projected electricity savings fall below the 600 MWh/year minimum threshold
• Technology is not commercially proven or is on the program's excluded technology list

Success Profile

Large industrial manufacturers, hospitals, universities, and municipal facilities with significant electricity consumption and identifiable large-scale efficiency opportunities (600+ MWh/year savings potential). Facilities in grid-constrained areas of Ontario benefit from the higher $450/MWh incentive rate. Organizations with dedicated energy managers or sustainability teams who can manage the M&V process.

Evaluation Criteria

Applications are evaluated by IESO technical reviewers on: (1) technical plausibility of the projected electricity savings, (2) project complexity and feasibility, (3) measurement and verification plan quality, (4) whether the technology is commercially available and eligible, and (5) grid-constraint status of the project location. Projects in grid-constrained areas receive the higher $450/MWh rate and may be prioritized.

Application Steps

Required Documents 8

Eligible Expenses 5

• Equipment and material costs for energy-efficiency improvements
• Installation and commissioning costs
• Engineering and project management fees
• Measurement and verification (M&V) costs
• Project feasibility study costs (50% covered by IESO separately)

Ineligible Expenses 5

• Costs incurred before the application is submitted or before a Participant Agreement is executed
• Equipment that does not meet the minimum 600 MWh/year savings threshold
• Excluded technologies (confirmed at application stage with IESO)
• Operating costs and ongoing maintenance
• Costs for equipment outside Ontario

Intake Periods

Continuous intake — program launched November 2025 and is open year-round. Applications should be submitted well in advance of equipment purchase decisions.

Deadline Notes

Applications must be submitted before entering into any binding purchase commitment for project equipment or services. The program is open continuously as long as funding is available. Projects must be completed within five years of the execution date of the Participant Agreement.

Open Application Portal →

Ineligible Organizations

• Residential and small commercial electricity customers
• Organizations outside Ontario
• Projects in sectors not covered by the program (e.g. purely commercial office or retail without industrial/institutional element)

Compatible Programs

Clawback Risk

Low Risk

No traditional clawback — incentive is pay-for-performance (paid only after verified savings are confirmed). If actual savings fall below 50% of anticipated, no incentive is paid. Between 50% and 100% of anticipated savings, the incentive is prorated to verified savings.