Why Now? Navigating the Ontario Electricity Price Crisis

If you feel like your business’s utility bills have been creeping upward, you aren’t imagining it. A major structural shift is taking place across Ontario’s energy landscape. For years, commercial energy planning could be treated as a predictable line item. Today, it has transformed into a critical operational risk.

An independent forecast prepared for the Ontario Energy Board (OEB) reveals a stark reality: average wholesale electricity prices are projected to spike from roughly $55/MWh to over $94/MWh—a staggering 71% price jump.

For local businesses, relying entirely on the grid means accepting permanent volatility. This looming price inflation is why forward-thinking companies are rapidly shifting their strategies, turning to commercial solar installations in Ontario as a financial shield.

Here is a look at what is driving this current crisis, and why the window to act is right now.

1. A Projected 71% Surge in Wholesale Electricity Rates

The Ontario Energy Board (OEB) released a wholesale electricity market forecast showing that average wholesale prices are projected to skyrocket from $55/MWh to over $94/MWh.

• Why it’s happening: Five major nuclear units are going offline for massive refurbishment schedules, removing cheap baseload power from the grid. At the same time, carbon pricing on gas-fired generation is jumping significantly (rising to $110/tonne in 2026 and $125/tonne in 2027), making back-up gas plants much more expensive to run.
• The Solar Motivation: While wholesale costs don’t translate dollar-for-dollar to a retail bill, they are the single largest driver of retail hikes and Global Adjustment volatility. Investing in solar allows Class A and B businesses to “lock in” their own sub-grid power rates for the next 30 years, completely insulating them from this incoming price crisis.

The Macro Drivers Behind Rising Hydro Rates

The sudden pressure on Ontario’s power grid isn’t an accident. It is being caused by three major, concurrent events:

1. Nuclear Refurbishments: Low-cost, reliable nuclear units (including parts of the Pickering and Darlington stations) are temporarily coming offline for essential, multi-year upgrades. This significantly reduces our baseline of cheap power.

2. The Natural Gas & Carbon Penalty: To fill the nuclear gap, Ontario must rely more heavily on natural gas plant generation. Because federal carbon pricing on these gas plants is steadily climbing, the cost to generate backup power has reached historic highs.

3. Surging Grid Demand: The grid is being stretched thin by the rapid electrification of commercial fleets and a massive, unexpected boom in energy-intensive data centres, which are now projected to consume nearly 9% of the province’s total power.

2. Unprecedented Grid Demand (Data Centres & EVs)

According to the Independent Electricity System Operator (IESO), Ontario is entering a period of rapid, long-term demand growth driven by economic development and the massive electrification of transportation. Crucially, the IESO highlighted that data centres are expanding much faster than expected and are projected to make up nearly 9% of Ontario’s total electricity demand.

• The Solar Motivation: With the grid under immense pressure, the probability of “peak grid alerts” during the summer is rising. For Class A customers, more peak alerts mean a higher risk of missing a peak hour and getting hit with devastating GA fees. For Class B customers, it means the system-wide flat GA rate is likely to rise to cover grid upgrades. On-site solar mitigates this strain right at the source.

3. The Launch of the Province’s New “Peak Performance” Program

The Ontario government recently launched the Peak Performance program under the Save on Energy framework. This initiative provides financial incentives ($20 per kilowatt) for commercial and institutional properties that can successfully lower their HVAC and operational electricity draw during periods of high system demand.

• The Solar Motivation: The government is explicitly telling businesses: if you can shed load during peak times, we will reward you. Commercial businesses are realizing that pairing a solar array (especially with battery storage) allows them to seamlessly participate in these lucrative demand-response programs without having to shut down their air conditioning or disrupt operations.

4. Capitalizing on Maximum Incentives

To help businesses cope with this transition and protect the grid, federal tax incentives have been optimized to reward self-generation.

If your business invests in a solar array, you can leverage the federal Clean Technology Investment Tax Credit (ITC). This incentive offers a 30% refundable tax credit on the capital cost of eligible solar PV and battery storage systems. Because the credit is fully refundable, your business receives cash back even if your tax liability for the year is zero.

When you combine the ITC with the ability to write off 100% of the equipment cost under Canada’s Accelerated Capital Cost Allowance (CCA), the payback period for a commercial system drops significantly.

Secure Your Energy Resiliency

The math is simple: as grid capacity tightens, both the market price of power and Global Adjustment fees will rise to pay for the province’s infrastructure upgrades.

Choosing commercial solar installations in Ontario is no longer just about meeting environmental, social, and governance (ESG) goals. It is a proven mechanism to lock in your own sub-grid power rates for the next 30 years.

Do not leave your company’s future profitability to the volatility of the grid. By generating your own power right on your roof or property, you can keep your operational overhead entirely predictable while the rest of the market scrambles to adjust.