Net metering explained for Canadian solar owners

How does net metering work?

A grid-tied solar system produces power when the sun shines, often when the household is using less than the system makes. The surplus flows out to the grid through the meter. Later, at night or in winter, the home draws power from the grid. Under net metering, the utility compares the two flows over a billing period and charges only for the net amount used.

A simple example with stated assumptions: suppose a home draws 600 kWh from the grid in a month and exports 250 kWh, and the utility credits exports one for one. The bill is based on 350 kWh. If a different arrangement credits exports at a lower rate than the retail price, the saving is smaller even though the meter readings are the same. The grid-tied versus off-grid guide explains why a connected system can use the grid like a very large battery.

Why do net metering rules differ across Canada?

Electricity is regulated mainly at the provincial level, and each utility applies the framework in its own territory. That is why one place may use classic net metering, another a net billing approach where exports are valued at a different rate, and a third a mix of credits and payments. Terms for system size, eligible customers, credit carry-over and annual settlement vary too.

For a worked example of one province's approach, read the Alberta net metering explainer and the Alberta microgeneration regulation guide. Other provinces publish their own rules through the energy ministry or utility.

What happens to unused net metering credits?

If a home on net metering exports more than it uses over a period, the net metering credits may roll forward to later bills, expire after a set time or be paid out at a stated rate. Many solar owners on net metering see the largest credits in summer and use them in winter, when production falls and heating or lighting loads rise. The exact period for carrying credits, and any annual reset, comes from your utility's tariff, so read that document or ask the utility directly.

What does net metering mean for the economics of solar?

The way net metering values an exported kilowatt-hour sets how much of a system's output pays off. A generous credit makes sizing close to annual consumption attractive, while a low export credit favours using more of the power at home. Production estimates and a monitoring plan help here; the production estimate guide and the monitoring guide show how to check the numbers. The payback period guide turns them into a payback figure, and a battery changes the balance again, as the battery storage guide explains.

How do you check the current rules for your address?

Start with your electricity distributor or retailer, then the provincial energy ministry and the energy regulator if one is named. Ask for the tariff or programme document that covers small generators, the maximum system size, the credit rate, the settlement period and the application steps. Get the answer in writing, and check again before signing a solar contract, since rules can change with regulation. The guide to shared solar and metering covers the case of several households behind one connection.

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