Save on Energy has announced a reduction to its Retrofit program incentives for onsite solar generation, effective June 30, 2026. For Ontario manufacturers evaluating solar energy projects, this update changes the financial case — and makes project timing a more critical variable than it has been in previous years.
Save on Energy has announced a reduction to its Retrofit program incentives for onsite solar generation, effective June 30, 2026. For Ontario manufacturers and industrial facility operators evaluating solar energy projects, this update changes the financial case for on-site solar — and makes project timing a more critical variable than it has been in previous years.
This article outlines the changes involved, their implications for industrial facilities across Ontario, and why the lead time required to develop a solar project makes the June 30 deadline more significant than it may initially appear.
What Is the Save on Energy Retrofit Program?
The Save on Energy Retrofit program, administered by the Independent Electricity System Operator (IESO) on behalf of the Province of Ontario, provides financial incentives to eligible commercial, industrial, and institutional facilities that invest in energy efficiency and distributed energy resources (DER).
For Ontario manufacturers, the program has been a meaningful pathway to offset the capital cost of on-site energy projects, including solar photovoltaic (PV) systems. Incentives are structured as prescriptive payments per unit of installed capacity, expressed in dollars per kilowatt alternating current (kW-AC), making them scalable and predictable for project planning purposes.
The program is available to facilities across Ontario served by local distribution companies (LDCs), including manufacturers in the Greater Toronto Area, Hamilton, Kitchener-Waterloo, London, Windsor, Ottawa, Sudbury, Thunder Bay, and across Southwestern Ontario and the Greater Golden Horseshoe region.
What Is Changing: The June 30, 2026 Solar Incentive Reduction
Effective June 30, 2026, Save on Energy will reduce the incentive for the Prescriptive Small-to-Medium Generation Solar DER measure for systems greater than 10 kW-AC:
| Measure | Current Rate | Rate After June 30, 2026 |
|---|---|---|
| Solar DER incentive (>10 kW-AC) | $860/kW-AC | $770/kW-AC |
| Change | — | −$90/kW-AC (~10% reduction) |
What qualifies under this measure?
This incentive applies to grid-connected, onsite solar photovoltaic systems greater than 10 kW-AC installed at eligible Ontario industrial or commercial facilities. These are not feed-in or export systems — they are behind-the-meter solar installations designed to offset a facility's electricity consumption from the grid.
What about the application deadline?
According to Save on Energy, complete Retrofit applications submitted before June 30, 2026 will be evaluated under the current incentive rate of $860/kW-AC, subject to program review and approval. Incomplete or late applications will be subject to the revised rate of $770/kW-AC.
This distinction matters: submission must be complete, not just initiated.
Other program updates
The Dollar Impact at Scale
A 10% reduction in incentive rate may appear modest in isolation, but at the system sizes typical for industrial and manufacturing facilities, the financial difference is substantial. Consider a 500 kW-AC rooftop solar installation:
For a 1,000 kW-AC (1 MW) system — common for larger manufacturing plants, distribution centres, and food processing facilities — that gap doubles to $90,000. These are not trivial sums in the context of capital planning and project financial modelling.
Each week of delay compresses the remaining timeline. Facilities that choose to monitor the situation may find themselves past the deadline without having made an active decision to defer — simply because the internal process took longer than anticipated.
Who This Affects: Ontario Industrial Sectors
The Save on Energy solar DER incentive is broadly available to eligible facilities served by Ontario LDCs. Industries where onsite solar is commonly evaluated — and where this change is most directly relevant — include:
Facilities with high daytime electricity consumption, large rooftop or ground-mount areas, stable long-term operating plans, and exposure to Ontario's time-of-use or Industrial Conservation Initiative (ICI) pricing are typically the strongest candidates for on-site solar evaluation.
What Remains Available After June 30, 2026
It is essential to clarify: the Save on Energy Retrofit program is not ending. Solar incentives will remain available after June 30, 2026, simply at a revised rate of $770/kW-AC rather than the current $860/kW-AC.
Facilities that miss the June 30 deadline are not foreclosed from accessing program support. However, they will be evaluating the project under a different economic structure, and any financial modelling or business case prepared using the current $860/kW-AC figure will need to be revised.
Key Dates and Next Steps
| Date | Action |
|---|---|
| Now | Initiate preliminary energy and site assessment |
| Rolling | Begin LDC interconnection inquiry |
| Before June 30, 2026 | Submit a complete Save on Energy Retrofit application |
| Starting 01 July 2026 | Revised incentive rate of $770/kW-AC applies |
For Ontario manufacturers already in early-stage evaluation, the most actionable step is to assess project readiness — understanding how far along the development process the facility currently is, and whether a complete application is achievable before June 30. For facilities that have not yet begun evaluation, a preliminary feasibility review can establish whether the project economics remain compelling under either incentive scenario.
FAQ: Ontario Solar Incentives — Save on Energy 2026
Frequently Asked Questions
Q: Does the incentive reduction apply to all solar projects, or only new ones?
A: The revised rate applies to Retrofit applications submitted on or after June 30, 2026. Projects with complete applications submitted before that date will be reviewed under the current $860/kW-AC rate, subject to program approval.
Q: What counts as a "complete" Retrofit application?
A: A complete application includes all required documentation: energy savings calculations, equipment specifications, site information, and contractor details. Partial or incomplete submissions will not be considered under the current rate. Consult the Save on Energy program guide or a qualified energy advisor for application requirements.
Q: Is the wall-mounted solar DER change separate from the incentive rate change?
A: Yes. The removal of wall-mounted solar DER configurations from program eligibility is a separate update that affects system design options, independent of the rate change for ground-mount and rooftop systems.
Q: What system sizes are most affected?
A: The change applies to all systems greater than 10 kW-AC, but the dollar impact scales with system size. Industrial-scale systems in the 500 kW to 1 MW range will see a difference of $45,000 to $90,000 in reduced incentive funding.
Q: Will solar incentives still be available in Ontario after June 30, 2026?
A: Yes. The Save on Energy Retrofit program is not ending. Solar incentives remain available at the revised $770/kW-AC rate. Facilities that miss the June 30 deadline are not foreclosed from the program — they will simply evaluate the project under the revised incentive structure.
Ready to assess your facility's solar opportunity?
Call Circuit Energy at 1-866-895-4545 or visit circuitenergy.ca to book a free consultation. Our Ontario-based engineers can review your site, model project economics under both incentive scenarios, and help determine whether the June 30 window is achievable for your facility.
