Ontario Net Metering Rules for Home and Business Solar

Net metering in Ontario lets a home or business with solar panels send surplus power to the grid and get a credit on its bill for every kilowatt-hour exported. The rules come from Ontario Regulation 541/05 under the Ontario Energy Board Act, and your local distribution company (Toronto Hydro, Hydro One, Alectra, Hydro Ottawa and so on) runs the program. Credits can be carried forward for up to 12 months, and anything left after that expires, so a system sized well past your yearly use earns nothing extra.

This guide covers who qualifies, how the credit actually shows up on a bill, the paperwork before a system is switched on, and the choice that now comes with Ontario's provincial solar rebate.

Who can net meter in Ontario

Net metering is open to customers who generate electricity from renewable sources mainly for their own use. Rooftop and ground-mounted solar are by far the most common, and the program covers homes, farms, businesses and institutions.

A few conditions apply to almost every application:

• The system has to serve your own load. Net metering is meant to offset what you consume, not to sell power. Utilities look at your consumption history when they review the proposed system size.
• You need to be a customer of the utility you connect to. The account holder signs the net metering agreement, so a tenant usually needs the owner's agreement to put panels on the building.
• The equipment has to be approved for grid connection. Inverters must meet Canadian standards (CSA certified), and the installation has to pass an Electrical Safety Authority (ESA) inspection.

Larger commercial systems also go through a connection impact assessment so the utility can confirm its local lines and transformers can handle the export. That step adds time and can add cost, which is one more reason to apply early.

How the credit works on your bill

With net metering, the utility installs a bidirectional meter, or reprograms a smart meter, that records both the power you pull from the grid and the power you push back. Each billing period, exported kilowatt-hours are subtracted from imported ones.

If you used more than you exported, you pay for the difference. If you exported more, the extra becomes a credit on your account. That credit carries forward month to month, so a strong July can cover part of a short, snowy January.

There are two limits worth understanding before you sign anything:

1. Credits expire after 12 months. Surplus credits roll forward for up to a year, then any unused balance is cleared. The utility does not pay cash for leftover credit.
2. Not every line on the bill is offset the same way. The credit applies to electricity, but fixed monthly charges stay, and how delivery and regulatory charges are worked out on the net amount depends on the utility's billing. Ask your utility for a sample net metering bill so the quote's savings estimate matches the way you will really be billed.

Time-of-use and ultra-low overnight rate plans also change the math. Solar produces most during the day, so the value of each exported kilowatt-hour depends on how your utility tracks those periods under net metering. A good quote should state which rate plan the savings figure assumes.

The steps before you switch on

The order matters. Installing first and applying later is the most common way projects stall.

1. Request a net metering application from your utility. Most Ontario utilities post the forms on their website. You will usually supply the system size, a single-line electrical diagram, the inverter model and site details.
2. Wait for the utility's offer to connect. Small residential systems often get a straightforward approval. Larger systems may need the connection impact assessment first.
3. Get the building permit if the municipality requires one. Many Ontario municipalities ask for a permit for roof-mounted solar so the roof structure can be reviewed under the Ontario Building Code.
4. Install, then book the ESA inspection. The utility generally needs the ESA connection authorization before it will change the meter.
5. Sign the net metering agreement and get the meter changed. Only then should the system export power.

Leave room for this in your schedule. Between utility review, permits and inspection, the approval side of a project often takes longer than the installation itself. Our home solar panel installation page explains how the design and paperwork fit around the build.

Net metering or the HRSP rebate: the trade-off

Ontario's Home Renovation Savings Program (HRSP) added rebates for rooftop solar and battery storage, with up to $5,000 for solar panels and up to $5,000 for batteries under the program's published terms. The catch is that, under the current rules, homes that take the solar rebate cannot enroll that system in net metering.

That makes it a real decision rather than free money:

• Net metering, no rebate. You pay more up front, but every surplus kilowatt-hour you export earns a credit, so summer production helps pay for winter use.
• Rebate, no net metering. You get money back on the purchase, but power you export without a net metering agreement earns no credit. To make it worthwhile, you either use your solar power as it is produced or store it in a battery for the evening.

Several energy groups and installers have pointed out that a typical home with good roof space usually comes out ahead with net metering over the life of the system. The rebate path tends to suit homes with limited roof space where a small array plus a battery covers most of the daytime and evening load. Program rules can change, so check the current HRSP terms on the official program site before you choose, and ask for both scenarios in writing.

If storage is on your list, the solar battery storage installation page covers how batteries are sized and when they pay off.

Sizing a system for Ontario net metering

Because credits expire after 12 months, the target is a system that produces close to what you use over a full year, not more. In Ontario, that means:

• Gathering 12 months of bills, ideally the most recent full year, and noting any planned changes such as a heat pump or an electric vehicle.
• Accounting for snow cover in winter months and the strong output from May to August.
• Checking roof direction, tilt and shading from trees or neighbouring buildings, since these set the real yearly production.

A system that makes 90 to 100 percent of your yearly use usually leaves little credit unused. Going much bigger mostly produces credits that expire. If a heat pump or EV is coming in the next year or two, say so, because that new load can justify a larger array.

Homeowners in the GTA can see what we cover on the Toronto solar services page.

Frequently asked questions

Does Ontario net metering pay cash for extra solar power?

No. Surplus generation becomes a credit on your electricity account, not a cheque. Credits roll forward for up to 12 months, and any balance left after that expires. That is why systems are normally sized to match yearly consumption.

Can you get the HRSP solar rebate and net metering at the same time?

Under the program's current terms, no. A solar system that receives the HRSP rebate cannot be enrolled in net metering, so you choose one path. Most homes with enough roof space save more over time with net metering, while small roofs paired with a battery can favour the rebate.

Do solar panels need ESA approval in Ontario?

Yes. Grid-connected solar is electrical work that has to pass an Electrical Safety Authority inspection, and utilities generally want the ESA connection authorization before changing the meter. Many municipalities also require a building permit for roof-mounted panels.

How long does net metering approval take in Ontario?

It varies by utility and system size. A small home system can move through in a few weeks once the forms are complete, while commercial systems that need a connection impact assessment can take several months. Applying before installation keeps the project from sitting idle.

Ready to look at solar for your property?

Send us your city, the type of building and a rough monthly electricity bill through the quote form. A specialist who works in your area reviews the roof and your usage and puts the options, including net metering and rebate scenarios, in a written quote.