Two homes, two identical systems, two different provinces. One house reaches payback in nine years and the other in fourteen. The panels did not cause that gap. The way each utility credits exported power did. This guide explains the two main models and how to test which one you are dealing with.
The two models in plain terms
Under net metering, a kilowatt-hour you send to the grid cancels a kilowatt-hour you draw later. Exports and imports are treated as the same thing, so the credit is worth roughly the retail energy price.
Under net billing, imports and exports are priced separately. You pay the normal rate for what you buy. You are credited a different rate, commonly lower, for what you sell. Alberta and Manitoba are reported to use net-billing-style arrangements, and Saskatchewan’s export credit is reportedly below retail. Details move around, so confirm with the utility.
| Feature | Net metering | Net billing |
|---|---|---|
| Export credit | At or near retail | Separate export rate, often lower |
| Value of surplus | High | Lower |
| Value of self-use | Same as export | Higher than export |
| Best system size | Matched to annual use | Often smaller, matched to daytime use |
| Battery case | Weaker | Stronger, but still check the numbers |
How the gap shows up in your bill
Imagine a household that pays 15 cents per kilowatt-hour (an illustration, not a quoted rate) and is credited 6 cents for exports. Every kilowatt-hour used in the house as it is produced saves 15 cents. Every kilowatt-hour exported earns only 6 cents. A system that exports half its output earns noticeably less than the same system under net metering.
That does not mean solar fails under net billing. It means the first kilowatt-hours you offset directly are the valuable ones, and the surplus is a smaller bonus.
What it does to system size
Under generous net metering, a large system can be sensible, because summer surplus turns into winter credit. Under net billing, oversizing earns little for the extra panels.
A more careful approach starts with your hourly or at least daytime use. A household with someone at home, electric heating or a heat pump, or an electric vehicle charging by day, will use more of the output directly. A house that sits empty from eight to five uses less. Our guides on how many solar panels you need and solar system size and cost help set the starting point.
Batteries and shifting
Because self-use is worth more than export under net billing, anything that moves consumption into sunny hours can help. Running the dishwasher at midday, heating water when the sun is out or charging a vehicle on a bright afternoon all raise the share you use directly.
A battery stores the surplus for the evening. The idea is sound, but batteries cost several thousand dollars up to well over ten thousand, so the economics need a careful look. Our battery storage basics article covers the trade-offs, and time-of-use rates and solar shows how pricing by hour can add another layer.
How to model each case
You do not need special software. A spreadsheet will do.
- Estimate yearly production. A kilowatt of solar in southern Canada often yields roughly 1,100 to 1,400 kWh a year, depending on location and design.
- Estimate how much of that you use at the moment it is produced. Ask the installer for their assumption and check it against your own habits.
- Value the self-used part at your retail rate.
- Value the exported part at the credit rate in your utility’s current terms.
- Add the two, subtract fixed charges that will still apply, and divide the net cost by the result.
Run it twice, once with a generous credit and once with a low one. If the project only works in one version, you know how much of the case rests on the export rule. Our guide to the solar payback period walks through the arithmetic.
What can change
Export rates are set by utilities and regulators and may be revised. A rule that applies today may be grandfathered for existing customers for a set number of years, or it may not. Ask your utility how long your terms are protected. If you read that a province is moving from one model to the other, as reported for British Columbia in 2026, find the official notice and check the effective date and whether an application deadline applies.
A fair starting point
Start by reading your utility’s page on net metering or self-generation. If you need background first, see net metering across Canada. Then look at what becomes of any leftover power in what happens to excess solar power. Other provincial notes sit in our grid and net metering hub.
The headline price per watt matters less than the credit rate. Two quotes at the same price can lead to very different results, so make the credit rate part of every comparison.
Quick answers
What is the main difference between net billing and net metering?
Net metering credits each exported kilowatt-hour at roughly the price you pay. Net billing values exports at a different, often lower, rate than the one you pay for imports.
Is net billing bad for solar?
It lowers the value of surplus power, so payback is usually longer than under generous net metering. Solar can still work if you use much of the power yourself.
Which provinces use net billing?
Alberta and Manitoba reportedly use net-billing-style arrangements. Rules change, so check with your utility.