The move follows a review announced last spring after the government received complaints from two LED lighting supply companies about high incentives, unfair pricing and unfair practices.
The Business Energy Solutions program assists small and medium-sized businesses with the cost of developing energy efficiency plans and also offers rebates to help pay for upgrades.
The department says its review found that although the program met its performance standards, the use of only three delivery agents and discounts as high as 100 per cent made it impossible for local supply companies to compete.
Under changes expected to take effect Aug. 1, energy audits are to be conducted by small-business energy auditors chosen through a publicly tendered process.
Businesses will also be able to choose from a published list of contractors to complete upgrades, while all contractors will have access to the same rebates.