What Hydro‑Québec’s Efficient Solutions Program Can Fund (Medium & Large Businesses)

Hydro‑Québec’s Efficient Solutions Program — Medium and Large Businesses Component provides financial support for organizations that purchase and install energy‑efficient equipment and systems in Québec. Designed for commercial, institutional, and industrial buildings billed on business rate classes other than G/Flex G, this utility incentive can cover up to 75% of eligible project costs.

This guide explains what the program can fund, how funding amounts are calculated, which expenses are ineligible, and how to document and claim support. It also includes realistic project examples and budgeting tips tailored to medium and large business facilities. All details reflect program guidelines as of December 1, 2025. Applicants should verify specifics in the participant’s guide before committing to costs.

Program Funding Overview

The Efficient Solutions Program is Hydro‑Québec’s business energy efficiency initiative. The Medium and Large Businesses Component supports projects that reduce electricity consumption and/or demand in existing or new facilities across Québec.

Key features:

• Funding model: Utility incentive (non‑repayable contribution)

• Coverage: Up to 75% of eligible costs

• Options:

• Simplified Option: Incentives for 200+ predefined measures using the OSE calculation tool

• Customized Option: Tailored support for measures not listed in OSE

• Maximum support: Up to $5 million per project under the Customized Option

• Focus: Electrically driven savings (kWh, peak demand), including HVAC, refrigeration, process, and controls

• Status: Program rules updated October 7, 2024; transitional rules may apply to earlier projects

The program complements related Hydro‑Québec business incentives (e.g., demand response participation). Within this component, funding centres on capital projects that measurably improve electric energy performance.

Funding Amounts & Rates

Funding levels vary by measure category, technology performance, and the option selected. The following rules generally apply:

• Up to 75% of eligible project costs can be covered for medium and large businesses.

• Simplified Option (OSE):

• Uses the OSE calculation tool to estimate the incentive per predefined measure.

• Incentive levels evolve with market adoption and technology costs.

• Payment follows post‑installation verification and approval.

• Customized Option:

• Designed for advanced or non‑standard measures not listed in OSE.

• Up to 75% coverage with a maximum of $5 million per project.

• Incentive is determined based on quantified energy savings and cost‑effectiveness.

• Caps and floors:

• Program may apply per‑measure or per‑site caps.

• Minimum support thresholds can apply in some cases; check current rules.

• Timing and versions:

• OSE versions and rule updates may change incentive values over time.

• Projects initiated before October 7, 2024 may be subject to transitional provisions.

Because incentive calculations reflect energy savings and market conditions, two similar projects can receive different amounts if technology performance or pricing differs. Always model with the current OSE version or consult the Customized Option process for non‑OSE measures.

Eligible Expenses

The program funds equipment, systems, and associated project costs that directly achieve electric energy savings or demand reduction in commercial, institutional, and industrial settings. Typical eligible expenses include the following categories and examples.

HVAC and Heat Pumps

• High‑efficiency heat pumps (including VRF/VRV and cold‑climate models) for space heating and cooling

• Dedicated outdoor air systems (DOAS) with energy recovery ventilators (ERV/HRV)

• Advanced rooftop units with high‑efficiency compressors, variable fans, and heat recovery

• Electrification of heating equipment where it reduces net electricity consumption or better manages demand

• Optimization of ventilation schedules and setpoints tied to occupancy or CO2 sensors

Controls, Automation, and Energy Management

• Building management systems (BMS/EMS) and advanced controls for HVAC, refrigeration, and process loads

• Sub‑metering and monitoring equipment used to measure and verify electric savings

• Demand management and demand response automation hardware and controls that enable load shifting or peak shaving

• Variable frequency drives (VFDs) on fans, pumps, and process motors with appropriate control strategies

Industrial and Process Equipment

• High‑efficiency motors and motor retrofits with VFDs

• Process optimization measures that reduce electric consumption per unit of output

• High‑efficiency ovens, kilns, or dryers where electricity is the primary energy source and savings are quantifiable

• Heat recovery from process streams that reduces electric heating or reheating loads

• Electrification of certain process equipment when total electric use and demand are improved through efficient technologies

Refrigeration and Cold Storage

• Efficient compressors, condensers, evaporators, and controls

• Electronic expansion valves and floating head pressure control strategies

• EC motors for cases and evaporators, anti‑sweat controls, and case doors retrofits

• Heat reclaim from refrigeration systems to offset electric space or water heating

Compressed Air Systems

• VFD compressors or high‑efficiency controls in multi‑compressor rooms

• Leak detection and repair programs with durable components and validated savings

• Efficient dryers, zero‑loss drains, and storage/pressure optimization hardware

• Heat recovery from compressors where it reduces electric heating loads

Building Envelope and Ancillary Measures

• Envelope improvements that demonstrably reduce electric heating or cooling loads (e.g., dock seals, high‑performance doors, destratification fans)

• Advanced lighting controls where available in OSE (note: incentives for standard LED retrofits may be limited or phased out)

• Metering and control integration required to deliver and validate electrical savings

Installation and Implementation Costs

• Electrical and mechanical installation labour and materials tied to eligible measures

• Commissioning, balancing, and programming necessary to achieve the intended savings

• Removal and responsible disposal of replaced equipment when required by the project scope

Engineering and Project Support (case‑by‑case)

• Under the Customized Option, certain engineering, design, or measurement and verification costs may be eligible when they are integral to implementing the measure and quantifying savings.

• Eligibility and coverage percentages vary and are confirmed during the customized review.

Note: Eligibility is focused on electricity savings and peak management. Measures must be installed in Québec at facilities on eligible business rates (e.g., G9, M, L, or LG) under this component.

Ineligible Expenses

The program does not fund every cost associated with a project. The following items are typically ineligible:

• Like‑for‑like replacements that do not deliver verifiable electric savings or demand reduction

• Routine maintenance, repair to original condition, or end‑of‑life replacements without efficiency improvements

• Used, refurbished, or leased equipment without proof of new efficient performance

• Portable or plug‑in devices not permanently installed as part of building or process systems

• Aesthetic improvements, architectural finishes, or non‑energy‑related building upgrades

• Office IT, general electronics, or software not directly tied to energy management or control of eligible systems

• Fees unrelated to implementation (e.g., financing charges, interest, insurance, extended warranties)

• Taxes, duties, and costs not directly linked to the installed measures

• Training and operations costs not required to commission or operate the eligible systems

• Internal labour or overhead unless explicitly allowed and documented as eligible

• Costs incurred outside required program timelines or before compliance with current rules

• Measures that primarily affect non‑electric fuels without clear electric savings or peak management benefits

• Projects outside Québec or at sites billed on rate classes not eligible for this component

Program administrators may request clarification on borderline items. When in doubt, document the link between the cost and the electric savings outcome.

Expense Documentation Requirements

Strong documentation improves approval speed and audit readiness. Prepare the following, as applicable:

• Detailed invoices for equipment and installation, including model numbers, quantities, unit costs, and labour hours

• Proof of payment for all claimed costs

• Technical specifications, product datasheets, motor nameplates, and efficiency ratings

• OSE calculation files and outputs (for Simplified Option) matching the installed configuration

• Commissioning and programming reports, air and water balance sheets, and control sequences

• Before‑and‑after photos of major equipment and controls interfaces

• As‑built drawings or updated schematics reflecting the installed systems

• Measurement and verification evidence, including baseline and post‑installation data when required

• Utility bills or interval data used to substantiate savings or demand impacts

• Proof of the facility’s Hydro‑Québec business rate class (e.g., G9, M, L, LG)

• Specialized forms where applicable (e.g., aggregator participation notice; municipal/co‑op or off‑grid documentation)

• A consolidated cost summary aligning claimed expenses with eligible measure categories

Retain records for the full period specified in program rules, as files may be reviewed for quality control.

Examples of Funded Projects

The following illustrations show how projects can align with the program’s eligible costs and coverage up to 75%.

• Manufacturing plant — process VFDs and heat recovery

• Scope: VFDs on process pumps/fans, heat recovery coil to preheat make‑up air, BMS integration

• Eligible costs: VFDs, controls hardware, heat recovery equipment, installation, commissioning

• Potential support: Up to 75% of eligible costs, based on OSE outputs and verified savings

• Grocery distribution centre — refrigeration optimization

• Scope: EC motors, case doors, floating head pressure controls, heat reclaim to domestic hot water

• Eligible costs: Refrigeration components, controls, labour, commissioning and verification

• Potential support: Up to 75%, subject to measure‑specific incentive values and caps

• Hospital — heat pumps and advanced controls

• Scope: High‑efficiency heat pumps for a wing, DOAS with energy recovery, BMS upgrades and sub‑metering

• Eligible costs: Equipment, integration with existing systems, programming, commissioning

• Potential support: Up to 75%, determined by OSE or customized savings analysis

• Wastewater treatment facility — aeration optimization

• Scope: High‑efficiency blowers with VFDs, dissolved oxygen controls, peak management automation

• Eligible costs: Blowers, sensors, VFDs, PLC integration, testing

• Potential support: Up to 75%, based on documented demand and kWh reductions

• Cold storage warehouse — demand response automation

• Scope: Controls to pre‑cool and modulate loads during peak events, sub‑metering for M&V

• Eligible costs: DR automation hardware/software, controls programming, metering

• Potential support: Up to 75%, with incentives reflecting controllable demand impacts

These scenarios demonstrate how capital measures, controls, and commissioning can be packaged to maximize eligible costs and savings.

Funding Disbursement & Claiming Process

Disbursement follows successful completion and approval of your claim:

• Simplified Option (OSE):

• Complete installation of OSE‑listed measures.

• Use the OSE tool to generate the incentive estimate that matches the installed configuration.

• Submit your request with invoices, OSE files, and required technical documentation.

• Hydro‑Québec confirms compliance and issues payment.

• Customized Option:

• Engage with the program on proposed non‑OSE measures.

• Provide detailed savings analysis and cost documentation as requested.

• After approval and installation, submit final documentation for payment.

Processing times depend on file completeness, volume, and verification requirements. Plan for several weeks between submission, compliance checks, and payment issuance. Keep documentation organized to reduce back‑and‑forth.

Stacking Rules

Incentives may be combined with other public funding, subject to disclosure and program limits:

• Disclose all other grants, rebates, or subsidies received for the same measures.

• Total public funding typically cannot exceed 100% of eligible project costs.

• Hydro‑Québec may adjust its contribution to avoid duplication of assistance.

• Demand response credits and energy efficiency incentives can coexist but are accounted for separately; ensure controls and metering substantiate both.

When stacking with tax credits or other programs, align scope definitions and documentation so each funder can identify its supported costs clearly.

Real‑World Budgeting Tips

• Start with OSE: For common measures, OSE provides fast, transparent incentive estimates and helps scope eligible costs accurately.

• Bundle measures: Combine controls, VFDs, and heat recovery with major equipment to raise savings and eligibility percentages.

• Target peak: Add demand management automation to boost controllability and preserve comfort/production.

• Validate performance: Specify equipment with proven efficiency ratings and provide detailed sequences of operation to secure approval.

• Time your purchase: Incentive values may change with OSE versions; plan procurement and installation windows accordingly.

• Choose the right option: Use the Customized Option for high‑impact measures not listed in OSE; prepare robust savings analyses.

• Document as you go: Collect invoices, serial numbers, and photos during installation to streamline your claim.

• Consider multi‑site roll‑ups: Where appropriate, replicate measures across facilities to scale savings and leverage program efficiencies.

• Coordinate with maintenance: Schedule commissioning and verification when systems are stable to capture true savings.

Conclusion

The Efficient Solutions Program — Medium and Large Businesses Component funds a broad range of electric energy efficiency and demand management measures, covering up to 75% of eligible costs and up to $5 million under the Customized Option. Projects that integrate efficient equipment, advanced controls, and thorough commissioning are well positioned to qualify. Use the OSE tool for predefined measures, document costs and savings diligently, and confirm current rules before purchase. With proper planning, organizations across Québec can reduce energy consumption, manage peak demand, and secure substantial Hydro‑Québec incentives.