Net Metering's New 12 kW Threshold: What the 2026 Change Means for Ontario Solar

A change to Ontario's net metering rules, reported to take effect on 1 May 2026, raises the size limit for the simplest category of home solar connection. Systems up to 12 kW now reportedly count as micro-embedded generation, up from 10 kW. That means no Connection Impact Assessment for systems in that range. At the same time, residential customers reportedly no longer need to carry commercial liability insurance to net meter.

Neither change makes solar dramatically cheaper. But for a growing group of Ontario homes, especially those that have added a heat pump or an electric vehicle, they remove real friction. Because these changes are recent, check the details with your local distribution company (LDC) before you plan around them.

Who benefits from 12 kW

A typical Ontario home without electric heat uses roughly 7,000–9,000 kWh a year. A 10 kW cap was rarely a constraint for those homes. All-electric and heat pump homes are different, often using 12,000–20,000 kWh or more.

In southern Ontario, a well-oriented, unshaded array typically produces about 1,100–1,250 kWh per kW per year. Using 1,150 kWh/kW as a middle estimate and 2026 installed costs of roughly $2.50–$3.50 per watt before incentives:

System size	Estimated annual output	Estimated installed cost (range)
8 kW	~9,200 kWh	$20,000–$28,000
10 kW	~11,500 kWh	$25,000–$35,000
12 kW	~13,800 kWh	$30,000–$42,000

East- and west-facing arrays usually produce about 85–90% of a south-facing one, and shading reduces output further. These are estimates; a site-specific design is the only reliable number. Our solar savings calculator can give you a first approximation.

Roof space is the practical limit for many homes. A 12 kW array needs roughly 28–30 modern residential panels, which many Ontario roofs cannot fit on good-facing planes. See is my roof good for solar.

What did not change

The core of net metering under Ontario Regulation 541/05 stays the same:

• Exports earn kWh credits valued at the retail commodity price, not cash.
• Credits roll forward for up to 12 months, then expire.
• You still need an ESA permit and inspection, a connection agreement with your LDC and a bidirectional meter.
• The old microFIT feed-in tariff remains closed, as it has been since 2017.

Caution: A bigger allowed size is not a reason to build a bigger system. Because unused credits expire after 12 months and there is no payout, production beyond your annual consumption has little value. Size to your actual use, plus any load you are confident you will add soon, such as a planned EV.

Net metering versus the HRS solar rebate

The Home Renovation Savings Program offers up to $10,000 combined for rooftop solar and battery storage (reported as up to $5,000 each). The catch is that systems receiving this rebate operate as load displacement for the life of the system. They cannot enrol in net metering, and excess exports are not credited.

That trade-off matters more for larger systems. A 12 kW system on a heat pump home will export a lot in summer, and those exports are exactly what net metering credits against winter heating use. An analysis by The Atmospheric Fund in July 2026 argued that many homeowners are better off keeping net metering rather than taking the rebate. Our guide to the solar rebate versus net metering works through the decision. Confirm current rebate terms on saveonenergy.ca (opens in a new tab).

Before you sign a contract

• Ask your LDC to confirm the micro-embedded threshold and insurance requirements that apply to you.
• Get 12 months of usage data from your LDC account and share it with each installer.
• Ask each installer how they estimated production and what shading analysis they did.
• Confirm who handles the ESA permit, the LDC application and the meter change, and what happens if approval is delayed.
• Compare at least two or three quotes on a cost-per-watt and cost-per-expected-kWh basis.
• Check equipment warranties: panels are typically warranted for 25–30 years, inverters for 10–25.

Simple payback for Ontario residential solar is often 10–15 years or more, depending on usage, rate plan and incentives. The 12 kW change helps electrified homes get the system size they need without extra paperwork. It does not change that underlying math.