The 30% Hydro Hike Is Here:
How Ontario Businesses Can Turn a Major Cost Increase into a Massive Win
On November 1, 2025, Ontario businesses will face a double-digit price shock on their electricity bills. A detailed analysis of the Ontario Energy Board’s new rate structure reveals the full financial impact, and it’s substantial. For any business watching its operating expenses, this is a critical moment.
Here’s the new reality of your hydro costs:
- Average Base Rates Are Jumping 31%: Before any rebates, the raw cost of electricity is set for an average increase of over 31% across all plans in a single year.
- On-Peak ULO Rate Soars by Nearly 38%: The rate that most impacts businesses—the Ultra-Low Overnight (ULO) On-Peak period (weekdays 4 p.m. to 9 p.m.)—will see its base price jump from 28.4¢ to a staggering 39.1¢ per kWh.
- Net Costs Still Rise Over 15%: Even after the government increases the Ontario Electricity Rebate (OER) from 13.1% to 23.5%, the final net cost to your business will still rise by an average of 15.5%. The rebate is not enough to protect your bottom line.
This isn’t just another price adjustment; it’s a structural shift designed to penalize daytime and afternoon electricity consumption—precisely when most businesses operate. But within this challenge lies a powerful opportunity to gain a financial edge.
Time of use:
Ultra Low Overnight:
Tiered:
The Solar Solution: Turn a Rate Hike into a Financial Advantage
While you can’t control the grid, you can control your reliance on it. On-site solar generation is no longer just a green initiative; it’s a strategic imperative. A solar system’s peak production perfectly matches a typical 9-to-5 business day, directly combating the highest On-Peak and Mid-Peak rates.
The new rate structure makes the financial case for solar more compelling than ever, thanks to a powerful mechanism in Ontario’s Net Metering program.
The Net Metering Multiplier: Under net metering, when your solar system generates surplus power, it’s sent to the grid for a credit on your bill. Crucially, the value of that credit is based on the electricity rate at the time of generation.
This means surplus power your system generates during On-Peak hours earns credits at the highest possible rate—soon to be 39.1 ¢/kWh. These high-value credits are then applied to your bill’s subtotal before the Ontario Electricity Rebate (OER) is calculated. This turns the rate hikes into a financial advantage. You not only avoid paying the highest rates but are actually compensated at those same high rates for your excess power.
Escape the Tiered Plan and Taxpayer Traps
The new rates also create two hidden costs for businesses:
- The Tiered Plan “Trap”: For businesses on a Tiered plan, the lower-cost threshold is fixed at just 750 kWh year-round. Many businesses will exceed this limit quickly, forcing them onto the higher Tier 2 rate, which is increasing by over 29% to 14.2¢/kWh.
- The Taxpayer Trap: The OER is a provincially funded program paid for by the tax base. As an Ontario business, you’re already paying taxes that contribute to this fund. Without solar, you face a double penalty: you pay the skyrocketing electricity rates on your hydro bill, and you pay taxes to help fund the very rebate designed to soften that blow.
Solar is a direct investment in your own infrastructure that breaks this cycle, turning a recurring expense into a valuable asset.
Why Otter Energy is the Right Partner
Since 2009, Otter Energy has been the trusted partner for Ontario’s largest landlords and commercial property owners. We are Canada’s only ISO:9001 certified solar company, and our dedicated in-house teams ensure your project is seamless and profitable.
- Control Volatile Costs: Gain predictability over a major, fluctuating operational expense.
- Slash Demand Charges: For larger facilities (>50 kW demand), solar not only reduces your total energy consumption (kWh) but also lowers your “peak demand” (kW)—a massive component of your monthly bill.
- A Smart Capital Investment: With grid prices accelerating and the powerful advantage of net metering, the payback period for commercial solar is shrinking, making it a financially sound investment in your company’s future.
Act Now: Maximize Your ROI with Stacking Incentives
The financial incentives to go solar have never been stronger.
- Save on Energy Retrofit Program: This program offers businesses incentives of up to 50% of eligible project costs.
- Federal Clean Technology Investment Tax Credit: Stack the provincial rebate with a 30% federal tax credit to dramatically accelerate your ROI.
Combined, these incentives can cover up to 70% of your total project costs.
Don’t Absorb the Rate Hike – Eliminate It
The upcoming hydro rate increase is a certainty. How your business responds is your choice. You can absorb the rising costs, or you can make a strategic investment that pays dividends for decades to come.
Contact Otter Energy today for a free, no-obligation assessment of your property. Let us show you exactly how much you can save and how simple it is to turn Ontario’s energy challenge into your competitive advantage.
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