Net Metering in Ontario, Explained

Net metering is the arrangement that lets a solar-equipped Ontario home use the grid like a seasonal storage account. When your panels produce more than you are using, the surplus flows out to the grid and you earn a credit. When you need more than your panels produce, at night, on cloudy days or through the winter, you draw from the grid and those credits are applied against your bill.

It is governed by Ontario Regulation 541/05 and administered by your local distribution company (LDC), such as Hydro One, Toronto Hydro, Alectra, Hydro Ottawa, Elexicon or London Hydro. This guide explains how the credits work, what changed in 2026, how to apply and where homeowners commonly go wrong.

How net metering credits work

The basic mechanics are simple:

1. Your bidirectional meter records electricity you import from the grid and electricity you export to it.
2. Exports earn kWh credits valued at the retail commodity price of electricity.
3. Credits are applied against the electricity you import in that billing period.
4. Any surplus credit rolls forward to future bills for up to 12 months. After that, it expires.
5. There is no cash payout for surplus generation, ever.

Because Ontario solar production peaks in late spring and summer, a typical pattern looks like this:

Season	Solar output	What happens on your bill
May–August	High; often exceeds home use	Credits build up
September–October	Moderate	Credits roughly break even or build slowly
November–February	Low; snow cover possible	Credits drawn down to offset winter use
March–April	Rising	Remaining credits used; new credits start

Note: Credits offset the electricity (commodity) portion of your bill. Fixed monthly delivery charges, and depending on your LDC's billing some regulatory and volumetric charges, still apply. A net-metered home will rarely see a $0 bill. Ask your LDC exactly which line items credits apply to.

Time-of-Use and net metering

On Time-of-Use (TOU) pricing, exports and imports occur at different times of day, which affects the dollar value of credits. In general, solar exports happen mostly during weekday mid-peak and on-peak hours, which can work in your favour, while a lot of household use falls in off-peak evenings. Billing systems differ by LDC, so confirm how your utility values credits under TOU and whether net-metered customers can choose the Ultra-Low Overnight (ULO) plan. Current rates are listed on our electricity rates page.

The 2026 changes: 12 kW and insurance

According to changes reported as effective 1 May 2026:

• The micro-embedded generation threshold rose from 10 kW to 12 kW. Systems at or below this size follow a simplified connection process without a Connection Impact Assessment.
• Residential customers no longer need commercial liability insurance to connect a net-metered system, which removes a cost and a common sticking point with home insurers.

These are presented here as reported and announced changes. Your LDC applies the rules, so confirm with it before you size your system around the 12 kW figure. Our blog post on the 12 kW net metering change has more background.

Tip: Tell your home insurer about your solar system anyway. Your policy may need updating to cover the equipment itself against damage.

Sizing a net-metered system

Because credits expire after 12 months and there is no payout, the best-value design usually aims to produce close to, but not more than, your annual usage.

Annual home usage	Target annual production	Approx. system size (south-facing, unshaded)
6,000 kWh	5,500–6,000 kWh	4.5–5.5 kW
8,000 kWh	7,500–8,000 kWh	6–7 kW
12,000 kWh (heat pump)	11,000–12,000 kWh	9–11 kW
18,000 kWh (all-electric, EV)	Limited by roof and 12 kW threshold	Up to ~12 kW

These assume a specific yield of roughly 1,100–1,250 kWh per kW per year in southern Ontario; east- and west-facing arrays produce roughly 85–90% of that. Plan for growth: if you are adding a heat pump or an EV within a few years, a slightly larger system can make sense.

Your installer should base sizing on 12 months of actual consumption from your bills, not a rule of thumb. Our solar savings calculator gives a first estimate.

The application process

The steps below are typical. Each LDC has its own forms and timelines.

1. Get a design and quote from a qualified installer, including a single-line electrical diagram.
2. Apply to your LDC for a net metering connection. Most LDCs require this before installation starts.
3. Receive conditional approval and, where required, an offer to connect.
4. Install the system. Electrical work must be performed by a Licensed Electrical Contractor under an ESA permit. Check whether your municipality also requires a building permit.
5. ESA inspection. The Electrical Safety Authority (esasafe.com (opens in a new tab)) inspects and issues a connection authorization.
6. Sign the net metering agreement and have the LDC install or reprogram a bidirectional meter.
7. Permission to operate. Only switch on when the LDC confirms.

Approvals commonly take four to twelve weeks. Make sure your contract states who handles each step and what happens if approval is delayed or denied.

Net metering versus the HRS rebate

The Home Renovation Savings Program has offered up to $10,000 combined for solar plus battery storage. According to program rules published in 2026, systems receiving this rebate operate as load displacement and cannot join net metering for the life of the system; exports earn nothing. That trade-off can cost more over 25 years than the rebate is worth, particularly for homes that are away during the day. We work through a full example in solar rebate vs. net metering. Confirm current terms on saveonenergy.ca (opens in a new tab).

Common pitfalls

• Oversizing. Credits beyond 12 months of use simply expire.
• Installing before LDC approval. You may have to modify or delay the system.
• Assuming a zero bill. Fixed charges and HST still apply.
• Confusing net metering with microFIT. The microFIT feed-in tariff, which paid cash for generation, closed in 2017 and is not available to new applicants.
• Losing eligibility by accident. Read any rebate application carefully before signing it.

Frequently asked questions

Do my net metering credits expire?

Yes. Credits roll forward for up to 12 months and then expire. Because summer surpluses are normally used up over the following winter, a correctly sized system loses little or nothing to expiry.

Can I add a battery to a net-metered system?

Generally yes, if the design is approved by your LDC and ESA. A battery can provide backup power and help with rate shifting, but adding one with the HRS rebate would change the system to load displacement. Confirm the rules before buying.

What happens to my credits if I sell my house?

Credits are tied to your electricity account. When you close the account, unused credits are typically lost. The new owner signs their own net metering agreement with the LDC to continue the arrangement.

Is there a size limit?

The reported simplified threshold for micro-embedded systems is 12 kW as of May 2026. Larger residential systems may be possible but can require additional studies and costs. Ask your LDC.