While the World Accelerates DERs, Ontario’s Local Generation Program Is on Hold

Cleaning solar panels in Lahore, Pakistan. (Jamshaid Anwar/pexels)

If you want a cure for energy cynicism, look at what’s happening on the global grid. We are currently witnessing a massive, bottom-up revolution in Distributed Energy Resources (DER). Around the world, communities, businesses, and forward-thinking governments are realizing that the fastest, cheapest, and most resilient way to power the future isn't by waiting a decade for mega-projects—it’s by generating power right where it’s consumed.

Consider these recent game-changers:

• Pakistan’s Rooftop Revolution: Over the last two years, Pakistan has added a staggering 27 gigawatts of distributed solar (story credit to Mitchell Beer and The Energy Mix.) To put that in perspective, that’s more capacity than Ontario’s entire peak electricity demand—and it happened almost entirely without government subsidies. High grid tariffs drove citizens and businesses to take matters into their own hands, proving that consumer-led DER deployment can scale at breathtaking speed when given the chance. (We should be so lucky if our current tariff-laden trade war forces Canada towards more 'sustainable' trading partnerships.)

• Germany’s Decentralized Milestone: Germany has officially crossed a landmark threshold, sourcing 62% of its total electricity grid mix from renewables. That's double the proportion compared to 10 years ago. Crucially, this isn't just large offshore wind; it's powered by millions of citizen-owned rooftops, localized battery installations, and community micro-grids showing what happens when a country aggressively opens its distribution networks to everyday generators.

• Progressive Grid Policy in Oregon and Washington: Closer to home, state legislatures in Oregon and Washington have passed forward-thinking legislation explicitly designed to accelerate DERs and Battery Energy Storage Systems (BESS). Their new frameworks remove regulatory friction, incentivize localized storage, and force traditional utilities to integrate community-scale assets into long-term planning.

The Ontario Story: Great Vision, Slow Execution

This brings us back home to Ontario.

We want to celebrate here, too. The concepts behind these global movements aren't foreign to us. In fact, Ontario has its own massive opportunity sitting on the launchpad: the Local Generation Program (LGP).

We posted excitedly about the LGP over a year ago when it was first being mapped out. On paper, it’s exactly what Ontario needs for sustainable, community-scale energy. The LGP was designed to create two vital streams:

1. Re-contracting 2,000 MW of existing small-scale renewables (like OREC’s active FIT solar sites) so clean, fully amortized assets can keep feeding cheap power into the grid for years to come.

2. Phase 2: Enabling new distribution-connected generation, allowing co-ops, municipalities, and local businesses to build systems larger than a single building's net-metering cap.

It’s a win-win policy. It lowers system costs, empowers local communities, and relieves pressure on our overworked transmission lines.

So, where is it?

If you check the IESO’s official engagement page for the Local Generation Program, there's no news about LGP since June 2025. Over a year later, Ontario’s energy community is still waiting for the government to formally sign off and release the full program framework, particularly the Phase 2 new-generation rules.

While jurisdictions like Oregon pass legislation to fast-track localized batteries and solar, and developing nations prove that DERs can scale overnight, Ontario’s bureaucracy remains bogged down in delay. We are watching prime construction seasons slip by while shovel-ready community projects—and the local capital ready to fund them—sit idle on the sidelines.

Ontario’s energy demand is rising rapidly, driven by industrial growth, electrification, and data centres. We cannot afford to leave small-scale, community-led generation out of the solution.

We applaud the Ministry of Energy and Mines and the IESO for recognizing the value of the Local Generation Program in theory. But in the energy transition, timing is everything. It’s time to stop leaving stakeholders in the dark and give Ontario's co-ops and communities the green light: release Phase 2 and open the LGP. OREC and our members stand ready with community capital to invest directly in Ontario's clean energy future.

Join OREC Today

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