Maximize Your Solar Investment with Net Metering

Net metering is a billing mechanism that credits solar system owners for the excess electricity they generate and send back to the grid. When your solar panels produce more energy than you use, the excess is exported to the grid and your utility meter runs backward, giving you credits. These credits offset the electricity you draw from the grid when your panels aren't producing (at night or on cloudy days). It's like using the grid as a giant battery.

Credits are earned automatically when your solar system produces more electricity than your home consumes. The excess energy flows back to the electrical grid through your utility meter, which tracks both the electricity you consume and the electricity you export. Most provinces credit you at the retail electricity rate - the same rate you pay for power. These credits accumulate on your utility bill and can be used to offset future electricity charges.

Yes, you will continue to receive a power bill from your electric utility once you have solar installed. Your electric bill will summarize the net difference between how much energy your household consumed, and how much energy that your household produced. For example, if your household consumes 1000 kWh, but produces 1100 kWh, then your electric bill will reflect the breakdown of how you used energy resulting in your net-credit of 100 kWh.

Each utility bills for delivery slightly differently. Some utilities wrap it into the cost per kWh of the electricity itself, while others charge a separate amount for delivery, transmission, grid maintenance, etc. In Ontario, most power companies separate their electricity charges and delivery fees on the bill, however if you look up how the calculation works, the delivery fees are still billed on a per kWh basis. This means that when you reduce your overall kWh consumption, you also reduce your delivery fees. You will only pay delivery on power that you import from the grid, not energy that you produce and consume locally at home.

When you have solar, you only receive credits for the excess power that you generate. The electric utility only has visibility over energy that you export to them, and cannot see energy that was consumed by your household in real-time. This means that the energy production the utility reports will never fully match what your system generated, unless your household consumed zero solar power for the entire billing period. This is completely normal - your monitoring system shows total production, while your utility bill only shows exported energy.

Depending on which power company you are with, there are three options. It is important to call your electric utility and ask them how they handle unused energy credits: (1) Some electric utilities have a 12-month billing cycle where any credits that remain on your bill at the end of the year will be wiped out and you have to start over. If this is your electric utility's policy, we recommend asking them to set your billing cycle to reset at the start of Spring. (2) Some electric utilities allow the excess credits to continue rolling over from one month to the next on a continual basis, never resetting (like Alberta and PEI). (3) Some electric utilities will be willing to cut you a check for the excess credit you have accrued with them, though not all will do this.

We always defer this question to your accountant for their opinion, however this is our understanding: Whether solar energy generation is classified as income or not depends on whether or not you are receiving income payments from your utility company. If you simply receive credits on your bill and not bank deposits, then that is not classified as income, so you do not have to pay tax on it. If your electric utility directly pays you for the energy generation and deposits money into your account, then that may be considered a taxable event. This means that for the average net metering customer receiving credits on your bill, you will not have to pay tax on your energy production.

It depends on your province. In Alberta and Prince Edward Island, credits never expire and roll over indefinitely. In most other provinces like Ontario, BC, Quebec, and Nova Scotia, credits roll over for 12 months and then are subject to an 'annual true-up' where excess credits may be forfeited or paid out at a lower wholesale rate. Manitoba uses monthly settlement, so unused credits don't carry forward.

Net metering credits you at the retail electricity rate (what you pay for power), while net billing typically credits you at a lower export rate. With net metering, if you pay $0.15/kWh for electricity, you earn $0.15/kWh for exports. With net billing (used in Manitoba), you might only receive $0.06-$0.08/kWh for exports. Net metering is more favorable for homeowners and provides better return on investment for solar systems.

Net metering is designed to offset your own electricity consumption, not to generate profit. You earn credits that reduce your electricity bills, but you can't 'cash out' for more than you consume annually. Any excess credits at the year-end true-up are typically forfeited or paid out at a much lower wholesale rate (around $0.03-$0.05/kWh). The goal is to size your solar system to match your annual consumption, not exceed it significantly.

Maximum system sizes vary by province. Most provinces allow residential systems up to 100 kW, which is far larger than typical homes need (average is 6-12 kW). Ontario allows up to 500 kW, while Alberta allows up to 5 MW. Saskatchewan allows 100 kW, and Quebec limits residential to 50 kW. These limits are generous enough that virtually all residential solar installations qualify for net metering programs.

In provinces with Time-of-Use (TOU) billing like Ontario, this works in your favor! Solar panels generate the most electricity during the day when On-Peak rates are highest (around $0.18/kWh). You earn credits at this high rate. Then you use those credits at night during Off-Peak hours when rates are lower (around $0.08/kWh). This means your solar system is worth even more because you're earning credits during expensive peak periods and using them during cheaper off-peak times.

Your solar installer (like Xolar) will install a bi-directional meter that can measure electricity flowing both to and from the grid. Most modern digital meters are already bi-directional. Your solar inverter must also be grid-tied and meet safety standards (like CSA certification in Canada) to automatically disconnect during power outages. We handle all equipment installation, utility applications, and interconnection paperwork as part of our turnkey service.

To be eligible for net metering, you must enter into a net metering agreement with your utility to connect to their grid. As such, the system design must meet their technical, safety, and inspection requirements. Net metering agreements are offered on a first come, first serve basis because grid infrastructure only has a limited ability to process the incoming back-feed of energy. This is why it's important to apply early and secure your spot on the grid - our experienced team will reserve your spot on the grid.

Standard grid-tied solar systems with net metering shut down during power outages for safety (to protect utility workers). Your system won't generate electricity or earn credits until power is restored. If you want backup power during outages, you need to add battery storage like a Tesla Powerwall. With a battery system, your solar panels can continue charging your batteries during an outage, and you can use that stored energy to power your home.

Xolar handles the entire net metering application process for you! We submit all required paperwork to your local utility, coordinate inspections, arrange for meter installation or upgrades, and ensure your system meets all technical requirements. The application process typically takes 4-8 weeks depending on your province and utility. You don't pay any extra - net metering application assistance is included in all our solar installation packages.

Yes! Net metering works alongside federal and provincial solar incentives like the Canada Greener Homes Grant ($5,000), provincial rebates, and accelerated capital cost allowance for businesses. These programs are complementary - rebates reduce your upfront costs, while net metering maximizes your ongoing savings. We help you take advantage of every available incentive to minimize costs and maximize return on investment.

Net metering agreements are tied to the property address and utility account, not the person. When you sell your home, the solar system and net metering agreement transfer to the new owner (increasing your home's value). Any accumulated credits typically stay with the property. When you move to a new home, you can install a new solar system there and apply for net metering at that address. We can help with both scenarios.