Turning HVAC Into a Revenue Stream

How Ontario’s new demand response program is reshaping the financial role of building operations.

For years, building owners have viewed HVAC systems as a cost centre.

Heating, cooling, and ventilation are essential to operations, but they come with significant and often unpredictable energy expenses. In Ontario, where electricity demand and pricing are becoming increasingly volatile, that cost pressure is only intensifying.

That equation is beginning to change.

With the Independent Electricity System Operator (IESO) launching the Peak Performance Program, building owners now have an opportunity to not only reduce operating costs, but also generate new revenue by actively managing how and when their HVAC systems consume energy.

This marks a fundamental shift in how buildings participate in the energy market.

A new approach to demand response

Demand response is not new. Traditionally, it has been associated with industrial facilities reducing production during peak grid events.

The IESO is now expanding that model.

The Peak Performance Program, delivered through Save on Energy, is specifically designed to target HVAC systems in commercial and institutional buildings.

Participants are notified in advance of high-demand days and are incentivized to reduce HVAC load for short periods, typically up to three hours during summer peak conditions [1].

The goal is simple.

Reduce strain on the grid during peak periods, while rewarding participants for their flexibility.

This shift reflects a broader reality. Large commercial buildings are among the biggest contributors to peak electricity demand in Ontario, particularly during the summer cooling season [2].

The financial opportunity

The financial case is immediate and measurable.

According to program guidelines, a portfolio capable of reducing approximately 1.25 megawatts of demand during peak events could earn close to $94,000 in a single season. This includes both performance-based incentives and additional funding to support implementation [1].

In addition, the program provides an upfront enabling incentive, approximately $20 per kilowatt, to offset the cost of monitoring and control systems [2].

For building owners, this introduces a new dynamic.

HVAC systems are no longer just a source of energy consumption. They are now a controllable asset that can generate financial return.

“This is one of the first programs in Ontario that directly monetizes HVAC performance,” said Trevor Shaw, Chief Operations Engineer, NERVA Energy. “It turns operational flexibility into a measurable financial outcome.”

Why HVAC is central to demand response

In most commercial buildings, HVAC systems represent the largest and most flexible electrical load.

During peak summer conditions, cooling demand drives significant electricity consumption across offices, retail centres, and institutional buildings.

Small, coordinated adjustments can have a meaningful impact:

• Slight increases to cooling setpoints

• Pre-cooling strategies before peak periods

• Temporary reduction in ventilation rates

• Staged equipment operation

When executed properly, these adjustments are often unnoticeable to occupants.

From a grid perspective, however, they provide critical relief.

From a financial perspective, they create a new revenue stream.

The missing link: control

Despite the opportunity, most buildings are not currently positioned to participate effectively.

HVAC systems are often operated using fixed schedules and basic thermostatic control. There is limited ability to dynamically adjust setpoints, coordinate load reduction, or manage ventilation in real time.

Without this level of control, participation in demand response programs becomes difficult.

“The value of demand response depends entirely on control,” said Josh Lewis, Chief Technical Engineer, NERVA Energy. “If you can’t adjust your HVAC systems dynamically, you can’t capture the opportunity.”

This is where operational strategy becomes critical.

A dual financial benefit

What makes this program particularly compelling is the combination of two financial levers.

First, optimizing HVAC systems reduces overall energy consumption, lowering operating expenses and improving net operating income.

Second, demand response participation introduces a new revenue stream tied to performance during peak events.

Together, these create a powerful financial case:

• Reduced electricity consumption

• Lower peak demand exposure

• Incentive payments for participation

• Offset costs through enabling incentives

In a market where electricity demand is projected to grow significantly over the coming decades, programs like this are designed to help manage both cost and system reliability [3].

A shift in how buildings create value

The launch of the Peak Performance Program signals a broader shift.

Buildings are no longer passive energy consumers.

They are becoming active participants in the energy system.

Operational flexibility, particularly within HVAC systems, now has measurable financial value.

For portfolio owners, this changes how building performance is evaluated.

Energy efficiency is no longer just about reducing consumption.

It is about optimizing when and how energy is used.

The path forward

Participation does not require major capital replacement.

It requires visibility, control, and the ability to respond dynamically to grid conditions.

For many portfolios, these capabilities can be implemented quickly.

At NERVA, we have developed an HVAC monitoring and optimization platform that enables real-time control of setpoints, ventilation, and system performance, allowing buildings to participate in programs like Peak Performance immediately.

For owners looking to reduce operating costs and unlock new revenue streams, the opportunity is clear.

Schedule a demo to see how your portfolio can participate.

In today’s energy environment, the buildings that perform best will not just consume less energy.

They will use energy more intelligently, and get paid for it.

About NERVA Energy

NERVA Energy is a distinguished multidisciplinary engineering firm, renowned for its cutting-edge energy performance solutions. With an elite team composed of seasoned energy engineers, M&E engineers, and seasoned in-house mechanical technicians, NERVA is steadfast in its commitment to delivering turn-key solutions. These solutions not only amplify building energy efficiency but are also backed by a steadfast financial performance guarantee.

To learn more about the company and our services, visit:

 www.nervaenergy.com