Ontario Hydro Rates Jump in 2025 | What You Need to Know

Hydro Rates Jump Over 30% in Ontario in 2025 - What Does This Mean for Homeowners?

If you're a homeowner in Ontario, you may have noticed a sharper increase in your electricity bills starting November 1, 2025. That's not your imagination: hydro rates (i.e., electricity rates) have indeed risen significantly under the Ontario Energy Board’s (OEB) Regulated Price Plan (RPP). For many homeowners, this rate hike changes the economics of home energy in a big way, particularly when it comes to investing in solar power.

Below, we’ll break down what the new rates are, how much they went up, and why that matters more than ever for people considering solar and battery solutions. We’ll also explore how the higher hydro rates accelerate the payback period of a solar installation, and how Solar Power Store can help you design a system that maximizes your savings in this “new-normal” landscape.

How Big is the Rate Increase? What Percentage Did Rates Go Up?

To understand the scale of this increase, it helps to compare the new rates to the previous rates.

• For Tiered pricing, the previous winter Tier 1 rate (Nov 1, 2024) was 9.3 ¢/kWh, rising now to 12.0 ¢/kWh. That’s a jump of +2.7 ¢, or roughly +29%.
• Tier 2 rose from 11.0 ¢ (2024) to 14.2 ¢ — an increase of +3.2 ¢, or ~29%.

• Looking at TOU: Off-peak went from about 7.6 ¢ to 9.8 ¢ (+2.2 ¢, ~29%), Mid-peak from ~12.2 ¢ to 15.7 ¢ (+3.5 ¢, ~29%), and On-peak from ~15.8 ¢ to 20.3 ¢ (+4.5 ¢, ~28%)

• For ULO: Ultra-low overnight was previously 2.8 ¢/kWh (as of Nov 1, 2024) and is now 3.9 ¢, which is an increase of +1.1 ¢, or about +39%.
• The ULO weekday on-peak rose from about 28.4 ¢ to 39.1 ¢, an increase of around +10.7 ¢, or ~38%.

So yes, homeowners are facing big rate increases in the ballpark of 30%+, depending on which price plan they are on and when they use most of their electricity. That’s a substantial rise, and not something to ignore. In fact, it’s the BIGGEST jump in electricity rates in Ontario since 2019, when all three tiers of TOU rates jumped over 50% between May 2019 & November 2019.

What Are the New Hydro Rates in Ontario (As of November 1, 2025)?

On November 1, 2025, the OEB introduced new regulated electricity rates under the RPP, which affect Time-of-Use (TOU), Tiered, and Ultra-Low Overnight (ULO) pricing plans. Below is a summary of the key rate changes for each pricing options.

Note: these apply for much of the province via utilities like Alectra, Milton Hydro, Hydro Ottawa, and more.

Time-of-Use (TOU) Pricing

• On-Peak (Weekdays, 7:00 am-11:00 am, 5:00 pm-7:00pm): 20.3¢/kWh
• Mid-Peak (Weekdays 11:00 am-5:00pm): 15.7 ¢/kWh
• Off-Peak (Weekdays 7:00 pm-7:00 am, weekends/holidays all day): 9.8 ¢/kWh

Tiered Pricing

Tiered pricing depends only on how much electricity you use in a month, not the time of day:

• Tier 1 (winter threshold): first 1,000 kWh per month = 12.0 ¢/kWh
• Tier 2 (usage above 1,000 kWh/month): 14.2 ¢/kWh

Note: the 1,000 kWh “lower-tier threshold” applies in the winter (Nov 1–Apr 30).

Ultra-Low Overnight (ULO) Pricing

• Ultra-Low Overnight (every day, 11:00 pm–7:00 am): 3.9 ¢/kWh
• Weekday On-Peak (weekdays, 4:00 pm–9:00 pm): 39.1 ¢/kWh
• Mid-Peak (weekdays, 7:00 am–4:00 pm & 9:00 pm–11:00 pm): 15.7 ¢/kWh
• Weekend Off-Peak/Holidays (7:00 am–11:00 pm): 9.8 ¢/kWh

Why Did Rates Go Up?

Understanding why these increases are happening helps clarify whether they’re likely to persist (or go higher), and what role solar can play in response.

Some of the core reasons include:

1. Supply Cost Pressures

• According to commentary and analysis, residential supply costs have increased significantly.
• This is likely driven by a mix of higher generation costs, including increased use of expensive natural gas “peaker” plants to meet demand during stress periods.

2. OEB Rate Reset

• The OEB sets RPP rates annually on November 1, based on forecasts for how much it will cost to supply electricity to regulated customers.
• With inflation, higher global energy costs, and more volatility, those forecasts translate into steep rate setting.

3. Rebate Adjustments

• To soften the blow, the Ontario government boosted the Ontario Electricity Rebate (OER) from 13.1% to 23.5% as of Nov 1, 2025.
• For a typical residential customer using ~700 kWh/month, this rebate is estimated to reduce the pre-tax portion of the bill by about $36/month.
• However, while the rebate helps, many users are still feeling the pinch of much higher per-kWh rates.

What This Means for Homeowners

The hydro rate spike has several important implications for Ontario homeowners. Let’s break them down.

1. Higher Monthly Bills for Many

If your consumption habits remain the same, a 28–40% increase in per-kWh costs will inevitably lead to noticeably higher monthly hydro bills. Even with the enhanced rebate, many households will pay more in absolute dollar terms.

2. Time-of-Use Usage Becomes More Costly

For TOU customers, on-peak electricity is now very expensive (20.3 ¢/kWh). If your household uses a lot of power during peak times (e.g., cooking, heating, EV charging in the evening), your bills could go up disproportionately.

3. Tiered Pricing Shifts

The larger Tier 1 threshold (1,000 kWh in winter) helps some households, allowing more usage at the lower 12.0 ¢ rate, but once users exceed that, Tier 2 is significantly more expensive. Heavy winter users, such as homes using electric heating or high loads, may cross into Tier 2 more often.

4. Battery Use & Arbitrage Becomes More Attractive

For people on ULO pricing, the ultra-low overnight rate remains very low (3.9 ¢), which makes charging an EV or a home battery at night more attractive. With daytime and peak rates so high, there is strong financial incentive to shift consumption or use stored energy strategically. This dynamic opens the door for solar with battery systems to significantly boost value.

5. Solar Economics Change Dramatically

This is perhaps the most important implication: solar payback times improve. Because the cost of grid power is now substantially higher, every kilowatt-hour (kWh) of solar electricity you generate and self-consume (or export when credits are favourable) is worth more in avoided cost. The business case for rooftop solar just got a lot stronger for many Ontario homeowners.

How the Rate Increases Impacts Solar Payback Calculations

Let’s dive into how higher hydro rates change the payback equation for a typical solar investment, and why now might be one of the best windows to invest in solar in Ontario.

1. Avoided Cost Is Much Higher

• In the past, let’s say a homeowner paid ~15 ¢/kWh for grid electricity during their key consumption hours.
• With the new rates (e.g., TOU On-Peak at 20.3 ¢, or Tier 2 at 14.2 ¢), each kWh of solar you use offsets more expensive electricity than before, increasing the value of each solar-produced kWh.
• That means if you install solar and shift or consume more of your own generated power, your savings per kWh rise.

2. Faster Payback Periods

• Suppose a 6kW solar system produces ~7,500 kWh annually (this depends on your location, tilt, shading, etc.).
• If you self-consume 50% (3,750 kWh) and export or net-meter the rest, previously the avoided cost might have been modest. Now, with TOU or Tiered rates, each kWh could be worth significantly more.
• That extra “value per kWh” accumulates over time, improving your return on investment (ROI).

3. Battery + Solar Synergies Are More Valuable

• Given the high daytime or evening grid rates, charging a home battery from your solar system becomes compelling.
• You can store excess solar production during the day to discharge during peak hours, effectively avoiding buying very expensive electricity.
• You can also charge the battery overnight (if on ULO) at 3.9 ¢/kWh, then use that stored power during peak, creating a strong arbitrage play.
• This strategic use of solar with battery reduces your reliance on grid power exactly when it’s most expensive, driving up savings.

4. Net Metering & Export Credit Potential

If your solar system produces more than you need, exporting to the grid can offset your bill. With higher rates, net-metering credits become even more valuable, because the “worth” of the electricity you send to the grid (or bank) is higher relative to what you’d pay for grid power.

Real-World Example: How Payback Improves

To illustrate, let’s walk through a simplified hypothetical scenario.

• Home: Detached house in Ontario, moderate-size solar power + battery system and an average electrical consumption of ~13,000 kWh/year.
• System:
  • 6 kW solar PV system producing ~6000 kWh/year to cover the morning/midday periods of highest electrical rates
    
  • 16kw battery used to level out the remaining daily energy usage to the lowest overnight rate of $0.039/kWh
• System cost of above is about $28,000 pre-rebate and $18,000 post-rebates
• Consumption: 13,000 kWh per year; 50% offset through solar, and the remaining 50% on battery power charged at cheaper rates.
• Bill Calculations Before Rate Hike: Assume avoided cost was ~15 ¢/kWh + 4 ¢/kWh in fixed charges = 19¢/kWh x 1.13 (taxes) ~ 21.4¢/kWh.
  
  • Current bill: 13,000kw/h @ 21.4¢/kWh = $2,782
    
  • New Bill: $506.80
    
    • 13000kwh x 0 x 50% = 0.
      
    • 13000kwh x (0.029+0.04 [after tax =0.078) x 50% = $506.80
    • Savings: $2,275.20 per year, plus inflation
      *plus connection fees
      
    • Breakdown of Solar Payback Time: $18,000/$2,275.20 ~ 7.9 years
• After Rate Hike: Assume avoided cost was ~19 ¢/kWh + 4 ¢/kWh in fixed charges = 23¢/kWh x 1.13 (taxes) ~ 26¢/kWh.
  • Current bill: 13,000kw/h @ 26¢/kWh = $3,380
  • New Bill: $578.5
  • 13000kwh x 0 x 50% = 0.
  • 13000kwh x (0.039+0.04 [after tax =0.089) x 50% = $578.5
  • Savings: $2,801.50 per year, plus inflation
    *plus connection fees
    
  • Breakdown of Solar Payback Time: $18,000/$2,801.50 ~ 6.5 years

• Payback Improvement
  In this example, we see the payback period for the solar power system improves quite a bit, from 8 years to just 6.5 years.
  That’s an improvement of almost 20%, just from this single instance of increased electricity rates!

Knowing with certainty that this will not be the last time electricity rates go up, it’s clear to see that solar power will only become more appealing and affordable as time goes on. Of course, real-world results depend on many variables: system cost, financing, net-metering policy, export credit, inflation, and maintenance. But the principle is undeniable: rising electricity rates make solar power solutions far more valuable for homeowners.

How Homeowners Should Act

1. Review Your Current Electricity Plan

• Check whether you’re on TOU, Tiered, or ULO.
• Look at your past bills and compare your pre- and post-November 2025 costs.
• Consider if shifting to a different plan or adjusting consumption patterns could help.

2. Request a Solar Assessment from Solar Power Store

• Reach out to Solar Power Store for a customized analysis of your home’s solar potential.
• Ask for a payback model that reflects the new rate structure.
• If you’re interested in batteries, have Solar Power Store run a solar with battery model so you can see what arbitrage looks like.

3. Evaluate Financing Options

• Talk to us about financing, leasing, loans, or other options.
• Compare the cost of capital to the value of avoided electricity cost under the new rates.

4. Plan Your Installation

• Work with us to choose the right system size, panel quality, inverter, and energy management strategy.
• If doing a solar power system with a battery, determine how you’ll charge/discharge to maximize savings.
• Allow for clean energy incentives, rebates, or local permitting in your planning.

5. Monitor and Optimize Post-Installation

• After the system is installed, monitor your production, consumption, and export.
• Adjust your behavior (when you run appliances, charge EVs, etc.) to maximize self-consumption and minimize expensive grid usage.
• Review your payback model after a year or two to validate actual savings vs. projections.
  

Now Is an Ideal Time to Talk to Solar Power Store

Given these rate changes, now is a strategic moment for Ontario homeowners to seriously evaluate solar. Here’s why Solar Power Store is well-positioned to help you take advantage:

• Expertise in Local Conditions: We understand Ontario’s electricity rate structures (TOU, ULO, Tiered) and can model your payback under the new 2025 rates.
• Customized System Design: Our team can design a solar system optimized for your home, usage profile, and goals (max self-consumption, offset peak, or export).
• Battery Integration: If you’re interested in combining solar with a battery, we’ll help you analyze whether the arbitrage works under the new pricing.
• Financing Support: We can guide you through financing, incentives, and cost models so you don’t over-leverage but still accelerate your ROI.
• Long-Term Support: From permitting to installation to maintenance, Solar Power Store offers end-to-end support so your system performs reliably for decades.

Let Solar Power Store Help You Make the Switch Today

The November 2025 hydro rate increase in Ontario represents a turning point for many homeowners. What might have felt like just another rate hike is actually a once-in-a-wave opportunity for solar. With grid electricity becoming significantly more expensive, generating your own clean power through solar not only helps the planet, it now makes bottom-line financial sense in a more compelling way.

If you're curious about how your home stacks up, how fast a solar system can pay for itself today, and how much risk you're shedding by going solar now, contact Solar Power Store today. Let us help you design a tailored solar (or solar + battery) solution that captures maximum value under Ontario’s new rate structure.