Commercial
Peak Shaving and the Global Adjustment: Class A vs Class B for Ontario Businesses
October 15, 2026
VerifiedOctober 15, 2026
Next reviewJanuary 15, 2027
AuthorGriffEnergy Research Team
SourceIESO and Save on Energy
The short answer
Every Ontario business pays the Global Adjustment (GA). Class B pays it per kWh, so solar cuts it directly. Class A pays by its share of Ontario's five highest-demand hours each year, so a battery run on those hours can cut a full year of GA. Class A starts at an average peak of 500 kW for manufacturers and greenhouses and 1 MW for everyone else.
For many Ontario businesses the GA is a bigger cost than the energy itself. How you are billed for it decides whether solar, a battery or a change in operations saves the most.
Class A vs Class B
| Class B | Class A (Industrial Conservation Initiative) | |
|---|---|---|
| How GA is billed | Per kWh, at a monthly rate the IESO publishes | Your share of Ontario's top five peak hours (your peak demand factor) |
| Timing | Each month's use | Peaks measured May 1 – April 30; that share is billed July 1 – June 30 |
| What lowers it | Using fewer grid kWh, at any time | Drawing less from the grid in those five hours |
| Who | Most businesses | Eligible larger users who opt in, or are automatically in above 5 MW |
Small businesses on the Regulated Price Plan pay the GA inside their time-of-use or tiered prices rather than as a separate line.
Who can be Class A
- Above 5 MW average monthly peak: Class A automatically, with the option to opt out.
- 1 to 5 MW: any business may opt in.
- 500 kW to 1 MW: may opt in if the NAICS code starts with 31, 32 or 33 (manufacturing) or 1114 (greenhouses, nurseries, floriculture).
The opt-in or opt-out decision is due by June 15 each year. Separate buildings cannot be combined to reach a threshold.
What solar does
For Class B, every kWh your panels produce and you use on site avoids the energy price and the GA riding on it, so solar has a direct, all-year effect. For Class A, solar helps only if it is producing during the five peak hours. Those usually fall on hot summer weekdays, late in the afternoon or early evening, when solar output is already declining, so solar alone is an unreliable peak tool.
What a battery does
For Class A, a battery is the main peak-shaving tool. Charged ahead of time and discharged during forecast peak hours, it lowers your draw in exactly the hours that set the next year's GA share. Two cautions: you must predict the peaks (the IESO publishes a peak tracker, and forecasting services exist), and missing even one peak costs you. For Class B, a battery does little for the GA, since it shifts kWh rather than reducing them; its value there is demand charges and backup. Storage qualifies for the 30% Clean Technology ITC for taxable corporations.
Two newer options
- Corporate PPAs for Class A. Ontario now lets Class A customers offset peak-hour demand with eligible clean-energy power purchase agreements, starting with the May 1, 2026 to April 30, 2027 base period.
- Peak Performance for Class B buildings. Launched by the IESO in April 2026, it pays commercial and institutional buildings to curtail load on summer peak days (June 1 – September 30): $54,845.40 per MW for the 2026 season, plus a $20/kW enabling incentive for first-time participants. Portfolios must aggregate at least 500 kW, at least 75% of the curtailment must come from HVAC, and participants cannot be in the ICI the same season. It rewards HVAC controls more than batteries.
Which one fits you
| Your situation | Usually the best first step |
|---|---|
| Class B, daytime operations | Solar sized to daytime load |
| Class B, large HVAC load | Peak Performance, alongside solar |
| Eligible for Class A, flexible operations | Compare Class A vs B with your utility's analysis; curtail on peak days |
| Class A, operations that cannot pause | Battery sized to cover your peak window |
Your utility sends Class A candidates their peak demand factor and a Class A vs Class B comparison each spring. Start there. See also how business electricity bills work and commercial solar cost and payback.
What is the Global Adjustment?
The part of Ontario's electricity cost that covers contracted and regulated generation, infrastructure and conservation programs, on top of the market price.
How do I know if I qualify for Class A?
Your average monthly peak demand over the base period must exceed 1 MW, or 500 kW for manufacturers and greenhouses. Your utility tells eligible customers by May 31.
Does solar lower my Global Adjustment?
For Class B, yes, on every kWh you no longer buy. For Class A, only to the extent it produces during the five peak hours.
Verified October 15, 2026. Rules and rates change; confirm eligibility and your peak demand factor with your utility. General information, not financial advice.
