Ontario Solar Installations Surge as Electricity Rates Hit Record Highs in 2026

Ontario solar installations surged an estimated 25% in 2025, and the pace is accelerating into 2026. The driver is straightforward: the Ontario Energy Board implemented a roughly 30% rate increase on November 1, 2025 – the largest residential electricity rate adjustment since 2019. Even after the provincial government increased the Ontario Electricity Rebate from 13.1% to 23.5%, most households are paying 15–18% more for power than they were a year ago.

Why Ontario Electricity Rates Are Pushing Homeowners Toward Solar

Ontario now has three residential electricity pricing plans, and the numbers tell the story:

Time-of-Use (TOU):

• On-peak (weekdays 7am–11am, 5pm–7pm): 20.3¢/kWh
• Mid-peak: 12.2¢/kWh
• Off-peak: 7.6¢/kWh

Tiered:

• First 1,000 kWh/month: 10.3¢/kWh
• Above 1,000 kWh: 12.5¢/kWh

Ultra-Low Overnight (ULO):

• Overnight (11pm–7am): 3.9¢/kWh
• On-peak: 39.1¢/kWh

For TOU customers, solar panels generate the most electricity during mid-peak and on-peak hours – exactly when rates are highest. A typical 8 kW rooftop system in Ontario produces roughly 9,000–10,000 kWh annually, offsetting $2,400 to $3,200 in electricity costs depending on your rate plan and consumption patterns.

For ULO customers, the math is even more compelling during daytime hours. The 39.1¢/kWh on-peak rate means every kilowatt-hour your panels produce during the day is worth nearly ten times the overnight rate.

The Demand Picture: Ontario’s Grid Under Pressure

The IESO’s 2025 Year in Review confirms the pressure on Ontario’s grid. Total electricity demand increased 4.4% in 2025 – a jump of 6.2 terawatt-hours to 145.6 TWh. Multiple summer heat waves pushed peak demand past 2024 records seven separate times.

The IESO’s Annual Planning Outlook projects Ontario’s electricity demand will grow 75% by 2050, driven by electric vehicles, heat pumps, data centres, and population growth. More demand on a constrained grid means continued upward pressure on rates – which makes the long-term case for solar even stronger.

Canada’s overall solar market reached 7.9 GW of installed capacity in 2025 and is projected to hit 14.5 GW by 2034, representing a 6.9% compound annual growth rate. Ontario accounts for the largest share of that growth.

What Ontario Incentives Are Available in 2026

The federal Greener Homes Grant and Loan are both closed (see our full breakdown of federal programs). But Ontario has its own programs:

Home Renovation Savings (HRS) Program:

• Up to $5,000 rebate for solar PV systems
• Up to $5,000 for battery storage (stackable)
• Maximum combined: $10,000

Net Metering:

Ontario’s net metering program lets you send excess solar electricity back to the grid and receive credits on your bill at the full retail rate. This effectively makes the grid your free battery – you export surplus during the day and draw it back at night.

Clean Technology ITC (commercial only):

If you’re a business owner, the federal 30% Clean Technology Investment Tax Credit applies to commercial solar installations. This does not apply to residential homeowners.

Most grid-tied residential solar installations in Ontario cost between $2.50 and $3.50 per watt installed. For an 8 kW system, that’s $20,000–$28,000 before the HRS rebate.

What You Can Do Right Now

1. Choose your rate plan wisely. If you’re installing solar, the TOU or ULO plan maximises the value of daytime generation. Ask your installer to model savings under each plan.
2. Apply for the HRS rebate before installing. The Home Renovation Savings Program requires pre-approval. Don’t start your installation before securing the rebate commitment.
3. Get multiple quotes. Ontario has dozens of certified solar installers. Prices vary significantly. Get your free solar quote to compare options.
4. Check our Ontario Solar Guide for the complete breakdown of provincial incentives, installer ratings, and net metering rules.