Watts the Hold Up? Unlocking Ontario’s Rooftop Solar Potential

• May 6, 2025
• Deep Parekh

Why Ontario’s SMEs Are Ready to Shine

Small and Medium-sized Enterprises (SMEs) in Ontario are pivotal to the province’s economy, yet they encounter several deal stoppers when it comes to reducing their carbon footprints. Limited access to economically viable decarbonization pathways prevents many of them from undertaking the deep retrofits required to reduce or remove emissions from their owned and operated facilities.

In our work with one such company, which owns its own portfolio of warehouses, we identified an exciting opportunity for these types of companies to get involved in Canada’s decarbonization efforts and energy transition. Implementing rooftop solar photovoltaic (PV) systems gives SMEs a direct method to generate clean energy and decrease greenhouse gas emissions.​

Ontario is on the cusp of a substantial surge in electricity demand, projected to escalate by approximately 75% by 2050. This increase is driven by factors such as population growth, economic expansion, and the electrification of industry. Addressing this rising demand necessitates innovative strategies to alleviate potential grid congestion and ensure a stable energy supply. Distributed energy resources, like rooftop solar PV installations on SME premises, can play a crucial role in mitigating grid strain by generating electricity closer to the point of consumption, thereby reducing transmission losses and enhancing grid resilience.​

Scaling rooftop solar PV installations for SMEs in Ontario addresses critical needs by addressing the province’s escalating energy demand and grid congestion as well as promoting investment and job creation within the clean energy sector.

From Pilots to Paybacks: What One Warehouse in Mississauga Can Teach Us

To realize the benefits of rooftop solar PV adoption, SMEs must proactively assess their energy needs, explore financing mechanisms, and leverage available incentives to make installations economically feasible. This includes conducting site assessments, evaluating consumption patterns, and identifying peak demand charges that could be offset by solar generation.

In our efforts to advance clean energy adoption among SMEs, the Global Climate Finance Accelerator (GCFA) conducted a sample analysis of a commercial warehouse in Mississauga. Our case study illustrates how rooftop solar PV can be effectively integrated into a SME’s operations, highlighting technical feasibility, potential cost savings, and broader environmental and economic impacts. The findings provide a valuable reference for SMEs across Ontario looking to transition toward clean, distributed system energy solutions.

Five scenarios were evaluated, ranging from battery storage alone to combinations of rooftop solar, electric heating, and energy storage. The analysis was supported by the company’s consumption data and aimed to identify solutions that balance economic return and carbon reduction.

The lowest-cost option, a standalone battery system with 4 hours of storage, offered the shortest payback period of 4-5 years and attractive savings off the company’s annual electricity bill. It did little, however, to reduce emissions. Integrating 1.06 MW of rooftop solar PV with electrification of space heating was found to be the most economically viable path to decarbonization. This option showed a payback of 5-6 years and annual savings of nearly C$200,000. The business case was supported by recent federal incentives that yielded over $1.1 million, significantly reducing upfront capital costs.

More ambitious options, such as adding battery storage or electrifying both space and process heating offered greater emissions reductions but required significantly higher investments and longer payback periods. Our key takeaway is that SMEs don’t need to pursue complex solutions to help mitigate climate change. Targeted solar PV investments with heating electrification can yield meaningful climate benefits and attractive returns.

Scaling Solar: Finance, Securitization, and Canada’s Bright Rooftops

While this case study illustrates the business case for rooftop solar PV paired with heat electrification, realizing impact at scale requires moving beyond individual pilots. With over 14 GW of untapped rooftop solar potential across Ontario, the next step is unlocking the mechanisms that enable wide-scale adoption, particularly for SMEs, which are often hesitant to bootstrap upfront investment.

To scale adoption, a rooftop solar investment platform could aggregate commercial and industrial (C&I) projects, pool investor capital, and provide consistent returns through long-term power purchase agreements (PPAs). GCFA modeling shows that bundling approximately 100 MW of generation capacity yields an ~12% internal rate of return. Scaling to 80 facilities could unlock ~500 MW, improving capital efficiency and ensuring predictable cash flows to reduce investor risk. On-Bill Financing (OBF) programs could accelerate update, which projects eventually securitized and sold to institutional investors. A municipal green bond would help derisk aggregated projects. The key to unlocking this opportunity in Ontario, however, is the launch of the IESO’s Local Generation Program, which is currently under development with a planned launch in 2026.

Beyond Ontario, Canada could draw inspiration from the U.S.-based Mosaic model, which demonstrates how asset-backed securitization (ABS) of residential solar loans finance distributed energy systems at scale. By combining aggregation, long-term contracts, and innovative financing instruments, Canada can activate its rooftop solar market empowering SMEs and accelerating each province’s clean energy transformation.

Industry feedback reinforces that scaling rooftop solar PV in Ontario and eventually across Canada requires a clear financial structure for securitization, strong partnerships with local distribution companies, and reliable energy offtake contracts to attract investor confidence. Addressing upfront deal costs and identifying ideal customer profiles, such as SMEs with high daytime loads and underutilized roof space, will be critical to designing a scalable, investment-ready model. With thoughtful implementation and alignment between policy, finance, and infrastructure, rooftop solar PV can become a cornerstone of Canada’s clean energy future, powered not just by technology, but by inclusive, locally driven climate action.

Deep is an Accelerator-in-Residence with the Global Climate Finance Accelerator. A dedicated energy management professional, he has a proven history of meeting company goals and helping businesses achieve their GHG and energy reduction targets. Deep is skilled in adapting to new challenges to help utilities find solutions to complex issues in the energy conservation and transition industry. He is excited to begin a new chapter as Consultant, Energy Transition at Posterity Group.