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Net Metering

Learn how net metering works and how it aims to save home and business owners money from their electricity bills.

How Does Net Metering Work?

When you install a rooftop solar system, the electricity it generates is used in your home immediately. Often, your solar panels produce more energy than you consume during daylight hours. The surplus electricity is sent to the grid in exchange for credits on your bill. In the evenings, you draw electricity from the grid, using the credits you’ve accumulated.

Each month, you’re billed only for the “net” energy consumed—the difference between the electricity your system generates and what you use. During summer, excess production creates a credit balance, which can be used in winter when your energy needs are higher due to shorter daylight hours.

Net metering allows you to take full financial advantage of all your generated power as long as the generation is equal to, or less than, your annual electricity use. In general, the larger the size, the quicker the payback from savings on your hydro bills. Here are a few potential business case summaries of net metering systems located in southern Ontario with average sunlight conditions. Many factors affect installation costs and payback periods so these are only very general estimates.

How Does Net Metering Work?

Net metering decreases your hydro bills with solar energy in the following three ways:

It decreases the amount of electricity drawn from the grid, saving the homeowner money not only on electricity charges, but also delivery, regulatory fees and tax.
Any excess electricity produced is sent out to the grid for monetary credits (electricity, delivery and regulatory) as if the owner of the system had sold the electricity to the grid, for the same price they bought it at during the time generated.
Solar owners can now take advantage of variable rate plans. As of 2024, net metering customers can choose to be billed on a "time of use" basis". Because solar energy is generated during peak hours 9am-6pm. When the energy from the grid is the most expensive. They can now get a higher price for the energy they produce. Therefore they get generation credits at higher rates during peak hours and draw that energy back up at night when it is cheaper.

Net metering decreases your hydro bills with solar energy in the following three ways:

It decreases the amount of electricity drawn from the grid, saving the homeowner money not only on electricity charges, but also delivery, regulatory fees and tax.
Any excess electricity produced is sent out to the grid for monetary credits (electricity, delivery and regulatory) as if the owner of the system had sold the electricity to the grid, for the same price they bought it at during the time generated.
Solar owners can now take advantage of variable rate plans. As of 2024, net metering customers can choose to be billed on a "time of use" basis". Because solar energy is generated during peak hours 9am-6pm. When the energy from the grid is the most expensive. They can now get a higher price for the energy they produce. Therefore they get generation credits at higher rates during peak hours and draw that energy back up at night when it is cheaper.

For example, take a look at this sample hydro bill.

This customer decreased their draw from the grid by 53% with net metering from the previous year.

This homeowner was also able to export more than they drew from the grid. So they were able to decrease a bill that would otherwise cost $201.49 to $30.39. According to this bill they have $37.28 in credits to be applied to the next month’s bill.

This homeowner was also able to export more than they drew from the grid. So they were able to decrease a bill that would otherwise cost $201.49 to $30.39. According to this bill they have $37.28 in credits to be applied to the next month’s bill.