Net Metering vs Load Displacement in Ontario: 2026 Guide
In Ontario, there are two approaches to managing on-site solar energy: net metering and load displacement. Both determine how your system will generate and/or manage excess solar power.
This guide breaks down how each option works, their pros and cons, and how to decide which approach makes the most sense for your Ontario property in 2026.
What is Net Metering and How Does it Work?
Net metering is a billing system that allows customers who generate solar energy on-site to receive credits for the excess electricity they produce. Whenever a solar system produces more electricity than the building needs, that excess energy is sent back to the utility grid. In return, the customer receives credits that offset the cost of electricity they draw from the grid at other times, such as at night or on cloudy days.
To be eligible for net metering, you must own and operate a system that generates electricity on-site from a renewable source, such as solar. You will then need to apply to your local electricity distribution company (LDC) or utility provider to connect your energy source to the electricity grid, meeting any technical requirements set out by said provider.
How Net Metering Benefits Customers with On-Site Generation
Credits received can help offset electricity used during times when solar panels aren’t generating enough energy.
Generating your own power reduces how much you pay to your utility provider, which can significantly cut monthly electricity costs and shorten the payback period on your solar investment.
Producing your own electricity is a financial hedge against rising energy costs, as you are more insulated from future rate increases on grid power.
Net metering supports clean energy and strengthens the grid by reducing reliance on fossil fuels.
Net Metering Pros & Cons
Pros:
Allows solar systems to be sized based on total annual energy use, not just peak demand.
Uses bill credits for extra solar energy instead of letting it go to waste.
Easy to implement, with no extra monitoring or control equipment needed.
Helps contribute to a positive ROI with faster payback times.
Cons:
Can make you ineligible for certain solar rebates and incentives.
May require grid upgrades in constrained areas that can’t carry as much electricity.
Interconnection between your solar system and the grid can be delayed or restricted.
What is Load Displacement and How Does it Work?
Load Displacement is when you install a power source, like solar panels, “behind the meter.” This means the electricity generated is used directly on-site, with no excess sent back to the grid.
To achieve this, your solar array must be carefully designed to ensure no excess electricity is generated. The system is sized to match your exact energy needs. Because you aren’t sending extra electricity to the grid, you don’t get credits or payments for excess energy.
Technically, anyone with an on-site energy source is eligible for load displacement. All that’s required to get started is a Single Line Diagram (SLD), which is submitted to Hydro One. This diagram shows the electrical layout of the load displacement system.
Why is Load Displacement Beneficial for On-Site Generation?
Helps lower your energy bills by using the power you generate on-site instead of buying it from the grid.
Reduces demand on the electrical grid.
Makes better use of the energy your system produces.
Helps your system deliver savings right away, not just through credits.
Insulates you from rising energy costs by generating your own.
Load Displacement Pros & Cons
Pros:
Enables optimal solar energy system sizing.
Easier grid interconnection since the system does not export power to the grid.
Avoids costly electrical upgrades by keeping the system within existing service and equipment limits.
Cons:
No credit for excess solar generation.
The system can only make as much electricity as you use during the day.
If the solar array is not designed effectively, you may require additional controls or monitoring to prevent exporting.
Net Metering vs Load Displacement: Direct Comparison Table
When to Choose Net Metering vs. Load Displacement in Ontario
Choosing between net metering and load displacement depends on how and when your building uses electricity.
Net metering is generally the best option when your solar system is expected to produce more power than your building uses at certain times. It can be a strategic choice for buildings with lower daytime energy use or who operate seasonally.
Load displacement is best if your building uses a consistent amount of electricity during the day.
Tailored Solar Systems to Fit Your Energy Needs: VCT Group
At VCT Group, we help businesses and other commercial properties transition to solar energy, from initial planning through to project completion. Whether you’re looking for a solar system that supports net metering or load displacement, we design solar arrays tailored to meet your energy goals.
Our goal is to make solar energy accessible to every type of property, so everyone can benefit from clean, cost-saving energy.
Contact us today to book a free site assessment, or learn how we can help make your solar project simple, affordable, and sustainable.