Water-cooled chillers

Chillers typically consume more electricity than any other single energy-consuming device in a large commercial building. A packaged water-cooled chiller produces chilled water for use in your building's air conditioning system and is typically 40 per cent more efficient than air-cooled chillers due to lower condensing temperatures. Upgrading existing equipment with a variable speed drive can also reduce energy consumption in your building significantly.

Provincial environmental legislation designed to eliminate the release of chlorofluorocarbon (CFC) and hydrochlorofluorocarbon (HCFC) may prohibit the overhaul or conversion of an existing chiller system. Overhauling an existing chiller with new refrigerant can be costly, making chiller replacement the most economical option for some buildings.

Watch our Power Smart video to learn how installing high efficiency chillers helped the Health Sciences Centre save up to $184,000 in annual energy costs.

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Health Sciences Centre

Health Sciences Centre (HSC) installed new high efficiency chillers to reduce GHG emissions and improve energy efficiency. HSC now saves $184,000 in energy costs every year.

Play video: Health Sciences Centre. (0:32)


  • reduced annual cooling costs of up to 40 per cent;
  • reduced greenhouse gas emissions;
  • increased profitability and competitiveness.

We offer incentives for water-cooled chiller installations for existing buildings and variable speed drive retrofits. Typical projects can save more than $10,000 a year in energy costs.


Packaged water chillers must have Integrated Part Load Value (IPLV) and capacity ratings calculated in accordance with the most current edition of AHRI Standard 550-590 or CSA C743.

The application must be accompanied by a computer printout showing the model number, flow rates, fouling factors, temperature settings, and IPLV calculations with approved certified ratings in accordance with AHRI Standard 550-590 or CSA C743.

The energy efficient chiller specified IPLV (kW/ton) must be less than or equal to the maximum IPLV requirement listed below.

Chillers which will be used as heat pumps are not eligible for incentives under the HVAC Program, but may be eligible under the Geothermal Program.


Integrated Part Load Value (IPLV) is rated in kW/ton. It is the average power input based upon a chiller operating at part loads through a cooling season.

Incentive = baseline IPLV (kW/ton) – your chiller efficiency IPLV (kW/ton) x rated tons x $450.

Incentives available for retrofit projects only. The maximum eligible incentive is $250,000 for all electrical measures included in the project.

Chiller capacity
Baseline IPLV*
Maximum IPLV requirement
< 150 0.65 0.62
150–299 0.60 0.55
300–2,000 0.51 0.46

Example: A 550 ton water-cooled chiller with an IPLV of 0.440 kW/ton is installed.
Incentive = (0.51 – 0.44) x 550 x $450 = $17,325
New chiller IPLV must be less than or equal to the requirement as stated above.

Typical annual savings

Replace an existing 30 year-old chiller (550 ton, 0.70 IPLV) with a new water-cooled chiller (550 ton, 0.44 IPLV) and:

  • achieve $11,824 in annual savings;
  • payback the cost to upgrade in 2 to 3 years.

Based on:

  • general service medium customer billed at $0.0355 per kWh and demand charge of $9.09 per kVA;
  • demand savings calculated over 4 months;
  • 1,500 operating hours per year.

Selecting a chiller

When selecting a chiller for your business, you should:

  • Review your air conditioning needs: buying more capacity than you need increases your initial costs and could increase your monthly bills for the life of the equipment, which can be up to 30 years.
  • Obtain competitive bids: different equipment manufacturers will offer various performance and efficiency options, many of which provide different benefits and system interactions. A consulting engineer can be employed to conduct an independent review of all selections.
  • Select a chiller that operates at a lower kW/ton at part load: a chiller that is most efficient at peak load may not result in the most efficient operation over the entire cooling season. Selecting chillers that operate at a lower kW/ton at part load may be the better option.
  • Expect to pay more up front: realize that this is often money well spent. Even modest improvements in chiller efficiency can yield energy savings and attractive incentives and paybacks.
  • Consider selecting machines of different sizes for multiple chiller installations: select one machine small enough to meet light loads efficiently and the other(s) to meet larger loads efficiently.

How to take part

You must receive pre-authorization before you purchase or install any equipment. To apply:

  • Submit your completed HVAC Program Application (PDF, 416 KB) along with necessary computer printouts (as per application form) and final shop drawings.
  • We will pre-approve your application.
  • Install your energy efficient measures.
  • Submit your completed HVAC completion documents (PDF, 240 KB):
    • completion declaration;
    • questionnaire;
    • paid invoices.
  • We will arrange a post-inspection walk-through.
  • An incentive cheque will be mailed to you.
Read more about the HVAC Program