Rising Energy Rates in Ontario: The Cost of Doing Nothing vs. Going Solar

In November 2025, electricity rates jumped nearly 29% — the largest single increase since 2019. And while the province raised the Ontario Electricity Rebate to soften the blow, the relief is funded by taxpayers and masks a troubling trend: the underlying cost of electricity in Ontario has almost doubled over the past 20 years.

For most households, that November increase translated to an extra $15–$60 per month — an increase of $200 - $700 per year. More price increases are expected to come in the next 5 years.

What's Driving the Increases?

One of the drivers of these rising costs is the development and refurbishment of nuclear facilities. Ontario Power Generation (OPG) has applied to the Ontario Energy Board for a 72.6% increase in the price it receives for nuclear-generated electricity, driven largely by the $26.8-billion refurbishment of the aging Pickering Nuclear Station and ongoing work at Darlington. Since nuclear supplies roughly half of Ontario's electricity, this request will ripple directly into residential rates starting in 2027.

The pressures stacking up on your bill:

Nuclear rebuild costs: OPG's $26.8B Pickering and Darlington refurbishment program flows directly to ratepayers.

Surging demand: Ontario electricity consumption rose 3.7% in 2025, reaching levels not seen since before the 2008 financial crisis. The Independent Electricity System Operator (IESO) has warned that Ontario will need 81% more electricity (adding 4.9x the City of Toronto) in the next  25 years.

Electrification: Electrification is adding new loads to a grid without the necessary production capacity. Commercially, in the mining, steel, agricultural, data center and electric vehicle industries; residentially, with the adoption of heat pumps and electric vehicles (EVs).

AI data centre growth: A new and fast-growing source of grid demand across the province.

Capped distribution in certain areas: Ontario’s infrastructure is not built to deliver large amounts of power to certain areas where load capacity is capped (large parts of Burlington, northeast of Waterloo, Wilmot, etc.). Even if more generation is added, these communities will not benefit from the supply increase— they’ll just suffer the associated costs. 

Taxpayer subsidies masking the real cost: the Ontario Electricity Rebate costs over $6 billion per year and can't grow indefinitely.

The Renewable Picture Is Changing Fast

Against this backdrop, something significant is happening on the supply side. Canada's clean energy sector has grown dramatically, and Ontario homeowners are part of that story.

Canada's renewable energy by the numbers:

• Total wind, solar, and storage capacity has grown by 56% since 2020

• Canada now has approximately 25 GW of installed capacity: 19 GW wind, 5+ GW solar, nearly 1 GW storage

•  Energy storage capacity more than doubled in 2025 — and is set to nearly double again within two years

• Installed capacity is projected to grow 32% by 2029 and to double by 2035

In 2025, renewables met 9.7% of Canada's total electricity demand

Ontario is part of this shift. The federal Canada Greener Homes Initiative wound down in October 2025 after serving over 50,000 households and adding approximately 500 MW of residential solar capacity. That program is closed for now, but it demonstrated something important: home solar works here, and Ontarians are embracing it.

Why Ontario is a strong market for solar:

• 1,800–2,200 hours of sunshine annually

• Production potential of 1,000–1,200 kWh per kW installed per year

• Peak electricity rates above 39¢/kWh during the 4–9 PM window

• A functioning net metering program across virtually all local utilities

Two Ways Solar Reduces Your Bill

Net Metering: Bank Summer Sun for Winter Bills

Net metering is Ontario's standard grid-tied solar program. When your panels produce more electricity than your home is consuming — typically on sunny spring and summer days — the surplus flows into the grid and earns you credits at your retail rate. Those credits roll forward month to month and are drawn down through the winter when solar production drops.

How it works:

• Export surplus solar to the grid and earn 1:1 credits at your retail electricity rate

• Credits carry forward on a rolling 12-month cycle

• The grid essentially acts as your battery — deposit energy in summer, spend it in winter

• Maximum residential system size is now 12 kW AC (recently increased from 10 kW)

• Available through Hydro One, Toronto Hydro, and virtually all Ontario local utilities

What to expect financially:

• Payback period: 8–11 years, followed by 15+ years of near-free electricity

• ROI of 8–12% annually — consistently outperforms GICs and savings accounts

• Built-in hedge against future rate increases

Load Displacement: Maximize Self-Consumption and Access Rebates

The alternative — sometimes called "zero export" or load displacement — uses solar and battery storage to offset your peak consumption without sending surplus power to the grid. The battery charges during daylight hours and discharges during the evening peak (4–9 PM), when electricity is most expensive.

Key features:

• Solar + battery system designed for zero grid export

• Offsets the most expensive electricity you'd otherwise draw from the grid

• Qualifies for the Save on Energy Home Renovation Savings Program (HRSP):

  • Up to $5,000 toward your solar array

  • Up to $5,000 toward battery storage

  • $10,000 total in available rebates

A transfer switch can be added for backup power capability during grid outages. Adding a battery to your load displacement system is the best way to maximize your solar savings and make the most of the energy generated from your panels. 

Note: solar production is lower in winter months, so bill savings are most significant April through October. 

The trade-off: because you can't export surplus energy for credits, overall lifetime savings are generally lower than a net metering system. But for homeowners where upfront cost is the primary consideration, or those looking primarily for battery backup, the $10,000 HRSP is worth taking advantage of.

Which Approach Is Right for You?

The honest answer depends on your electricity usage, roof, and priorities. Some general guidelines:

• Higher annual consumption (15,000+ kWh/year) → net metering typically maximizes lifetime value

• Upfront cost is a barrier → the HRSP rebate under load displacement reduces effective cost by $10,000

• Energy independence matters to you → battery storage + transfer switch gives backup capability under either approach

• You drive an EV or have a heat pump → larger system sizes (up to 12 kW AC) are now available under net metering

What's clear is that doing nothing is an increasingly expensive choice. Every year of delay is another year of paying rates that are structurally higher and likely to keep climbing.

The Bigger Picture

Canada's renewable sector is maturing rapidly. The 25 GW of installed wind, solar, and storage capacity is projected to grow by 32% by 2029 and to double by 2035. The transition is underway — and the economics increasingly favour homeowners who participate in it rather than passively absorbing grid rate increases.

Beyond their positive environmental impact, solar panels are currently the cheapest scalable form of energy available based on the Ontario levelized cost of energy, with large hydro, gas and nuclear being significantly more expensive. This difference in cost is only going to increase in the future. It is also one of the most straightforward financial hedges available to an Ontario homeowner who wants to stop wondering what their next hydro bill will say. 

Interested in understanding what solar could save your household specifically? A free site assessment from Guelph Solar accounts for your roof, your usage patterns, and the programs you're eligible for — and gives you real numbers to work with.