Ontario ULO Arbitrage Explained: 2026 Rates, Real Savings, and Why Most Solar Quotes Are Wrong

TL;DR — 60-second answer

Energy arbitrage on Ontario's Ultra-Low Overnight (ULO) plan means buying electricity at 3.9¢/kWh overnight and using it (via a home battery) during the 39.1¢/kWh weekday peak — a 35.2¢/kWh spread. The math is real, but it only works under three conditions:

1. Your local utility lets you switch to ULO (most do, but not all customers are eligible — call your utility first).
2. You have a battery sized for your real evening load, not a brochure number.
3. Your installer modelled the arbitrage honestly — most do not. Many quote "ULO savings" as if every kWh in your home gets shifted to 3.9¢. That is mathematically impossible.

If you want a clean, neutral model of what ULO arbitrage is actually worth on your roof and your hydro bill, use the Solar Calculator Canada Ontario tool. We do not oversell ULO. We model the hours that can actually be shifted, and the hours that cannot.

Ontario's Regulated Price Plan (RPP) gives residential customers three options: Time-of-Use (TOU), Tiered, and Ultra-Low Overnight (ULO). The Ontario Energy Board (OEB) sets these rates. Most homes default to TOU.

The rates below were locked in by the OEB on November 1, 2025 and apply through October 31, 2026, as confirmed in the official OEB Regulated Price Plan bill insert (PDF) and on the OEB electricity rates page.

Time-of-Use (TOU) — the default plan

TOU peak and mid-peak hours swap on May 1 for summer. Rates stay the same; only the hour buckets change.

Ultra-Low Overnight (ULO) — the arbitrage plan

Tiered — the flat-rate plan

The Ontario Electricity Rebate (OER) was raised from 13.1% to 23.5% on November 1, 2025, partially offsetting the roughly 30% RPP rate increase. The OER applies to your bill before HST and is set by the provincial government — it can change at any time.

Energy arbitrage is the practice of buying electricity when it is cheap and consuming it when it is expensive. You need three things to do it:

1. A rate plan with a meaningful price spread — ULO gives you a 10x spread (3.9¢ vs 39.1¢).
2. A way to store cheap electricity — almost always a home battery (Tesla Powerwall, Enphase IQ Battery, Franklin aPower, and similar).
3. A controllable load that uses the stored energy during peak hours — your house from 4 PM to 9 PM on weekdays.

Without a battery, ULO is just a worse version of TOU for most households. The 39.1¢/kWh weekday peak will erase any overnight savings unless you literally do not use electricity from 4 PM to 9 PM — which is when most families cook, do laundry, run AC, and charge EVs.

This is the part most solar companies leave out.

Here is the dishonest math you will see in a lot of Ontario solar proposals:

"Your home uses 9,000 kWh/year. On ULO you would pay 3.9¢/kWh instead of roughly 16¢/kWh blended on TOU. That is 12¢/kWh × 9,000 kWh = $1,080/year in rate-shifting savings."

That number is fiction. Here is why.

Reason 1: You cannot shift 100% of your load to overnight

Your fridge, internet, standby loads, and overnight HVAC run between 11 PM and 7 AM — that is already low-cost on ULO. Everything else (cooking, lighting, TVs, EVs being driven, AC during a heat wave) happens when the sun is not shining and the battery has to discharge. The 3.9¢ rate only applies to grid electricity drawn between 11 PM and 7 AM, not to everything your home uses.

Reason 2: A battery has finite capacity

A single 13.5 kWh battery (for example, a Tesla Powerwall 3) gives you roughly 10 to 11 kWh of usable energy after depth-of-discharge derating. Many Ontario homes use 12 to 25 kWh during the 4 to 9 PM peak window — especially in winter with electric heat or in summer with AC. If your battery runs out at 7:30 PM, the rest of your peak-window electricity is pulled from the grid at 39.1¢/kWh, wiping out the day's arbitrage gain in 90 minutes.

Reason 3: Round-trip efficiency is not 100%

Lithium iron phosphate (LFP) batteries — the dominant chemistry in Ontario installs — have a real-world round-trip efficiency of 88 to 92%. Every kWh you store at 3.9¢ comes out as roughly 0.9 kWh at peak. The true arbitrage spread is closer to 34¢/kWh net, not 35.2¢, and you lose more if the battery sits at high temperature or near 0°C.

Reason 4: Solar production and peak hours do not fully overlap

In Ontario, the highest-cost ULO window is 4 PM to 9 PM weekdays. On a typical December day in Toronto, solar production is essentially zero after 4:30 PM. Even in June, solar output drops sharply after 6 PM. The battery — not the panels — is what carries you through peak. If the installer modelled "solar covering peak hours," they modelled summer noon, not Ontario evenings.

Reason 5: Winter shortfall is real

Ontario's southern regions get roughly 5.8 peak sun hours per day in June but 1.9 hours per day in December — a 3x swing. A system sized on annual averages massively under-delivers in January. Honest models use monthly production curves, not a flat annual divide.

What honest ULO arbitrage actually saves

Across the homes we have modelled in Ontario, real ULO arbitrage savings with a properly sized solar plus battery system land in the range of $900 to $1,500/year extra on top of TOU savings — not the $2,000 to $3,500 figures you will see in aggressive sales decks. For homes without solar but with a battery only, the arbitrage savings are roughly $400 to $700/year — meaningful, but rarely enough to justify a battery on its own.

Want a fair comparison? The Solar Calculator Canada — Ontario tool lets you input your real monthly kWh, your peak-window kWh, and your roof profile. It models the arbitrage with realistic battery capacity, round-trip efficiency, and seasonal solar output — not a brochure assumption.

This is the single most-skipped step in Ontario solar sales conversations. Not every Ontario household can switch to ULO, even though it has been a province-wide regulated option since November 1, 2023.

You cannot switch to ULO if any of these apply:

• You are under a fixed-price retail energy contract with a third-party retailer (not on the RPP). About 1 in 10 Ontario customers are in this category. See the OEB's guidance on energy retailer contracts.
• Your home does not have a working smart meter capable of interval reporting. A small number of rural and northern accounts still do not.
• You are served by Cornwall Electric, which operates under Hydro-Québec, not the Ontario RPP system.
• Your distribution territory's telecommunications infrastructure does not support smart-meter data flow to the Smart Metering Entity (rare, mostly remote northern accounts).

The 5-minute phone call that protects you

Before you sign a solar plus battery contract that assumes ULO savings, call your utility and confirm three things:

1. "Am I currently on the RPP?" (Yes means you can switch. No means you are on a retailer contract and likely cannot.)
2. "Can I switch from TOU to ULO on my account?" (If yes, ask how — most utilities do this online via their account portal or a Customer Choice request form.)
3. "How long will the switch take to appear on my bill?" (Typically up to 10 business days, then effective the next billing cycle.)

Direct links to switch (major Ontario utilities)

You can switch between TOU, Tiered, and ULO at any time, for free, as many times as you want — but the change only takes effect on the next billing period.

Ontario has two solar incentive paths that are mutually exclusive: the Home Renovation Savings Program (HRS / HRSP) rebate and net metering. Your ULO arbitrage strategy depends on which path you choose. We break the payback math down in detail in our Solar Payback Period Ontario guide.

Path A — Net metering (no battery required, but allows it)

• What it gives you: a 1:1 retail-rate credit for excess solar exported to the grid. Credits roll forward 12 months and then reset to zero.
• Governed by: Ontario Regulation 541/05 under the Electricity Act, 1998.
• Best on: TOU or Tiered. ULO is usually the wrong choice for net metering customers because excess export during the day earns the same credit per kWh whether you are on TOU or ULO — but you would pay the punishing 39.1¢ ULO peak on any evening grid draw that solar or credits do not cover.
• Authoritative reference: OEB Net Metering page.

Path B — HRS / HRSP rebate plus battery plus ULO

• What it gives you: up to $5,000 for solar PV ($1,000/kW, max 50% of cost) plus up to $5,000 for battery storage ($300/kWh, max 50% of cost) — $10,000 maximum combined through Save On Energy and Enbridge Gas.
• Catch: the system must be configured for load displacement only — no grid export. You cannot net meter on the same system.
• Best on: ULO. The battery captures cheap overnight grid power and free daytime solar, then discharges during the 4 to 9 PM peak. This is where the 35.2¢/kWh spread actually earns money.
• Pre-approval required: HRS approval must be granted before installation begins. Installers who skip this step put your $10,000 at risk.

Decision table

Run both scenarios in the Solar Calculator Canada Ontario tool before signing anything. The 25-year net savings can flip by $15,000 to $25,000 depending on which path you pick.

Here is the math any reputable Ontario solar quote should show on paper:

Annual ULO arbitrage savings ≈ (battery usable kWh) × (cycles per year) × (peak rate − overnight rate) × (round-trip efficiency)

Worked example — single Powerwall 3, average Toronto home on ULO:

• Battery usable capacity: 13.5 kWh × 0.9 depth-of-discharge = 12.1 kWh
• Cycles per year: assume 330 (some days the battery is full from solar and barely cycles)
• Spread: 39.1¢ − 3.9¢ = 35.2¢/kWh
• Round-trip efficiency: 0.90

Result: 12.1 × 330 × $0.352 × 0.90 ≈ $1,265/year in ULO arbitrage savings.

This is the upper realistic bound for a single-battery setup on ULO. If a quote shows you $2,500+/year of "ULO savings" from one battery, ask the installer to walk through the formula above on paper. If they cannot, you have found the problem.

For 2-battery setups (27 kWh usable), the realistic ceiling is roughly $2,200 to $2,500/year of arbitrage — meaningful, but still nowhere near the $4,000+ numbers some companies advertise.

Toronto (Toronto Hydro)

ULO is fully available via Toronto Hydro's Customer Choice program. Net metering applications are typically faster here than the provincial average (often 4 to 8 weeks). Toronto homes also have access to the Home Energy Loan Program (HELP) — up to $125,000 for solar plus battery, repaid through property tax.

Ottawa (Hydro Ottawa)

ULO is available. Hydro Ottawa offers it through MyAccount. Ottawa also runs the Better Homes Ottawa Loan Program for low-interest solar and storage financing.

Mississauga, Brampton, Hamilton, Vaughan, Burlington (Alectra Utilities)

ULO is available across all Alectra territories. Switch via the Alectra rate option page.

Rural Ontario and smaller cities (Hydro One)

ULO is available, but rural accounts on long radial feeders should confirm smart-meter telecom coverage before assuming eligibility. See the Hydro One electricity pricing page.

Kingston, Kitchener-Waterloo, London, Windsor, Sudbury, Thunder Bay

All major regional utilities (Utilities Kingston, Enova Power, London Hydro, EnWin, Greater Sudbury Hydro, Synergy North) now offer ULO under OEB regulation. Switch processes are similar — an online portal or a written rate election form.

We deliberately built this post so every numeric claim is checkable against a primary source. Cross-check us:

• OEB Regulated Price Plan rates and bill insert — oeb.ca electricity rates
• OEB official Nov 2025 bill insert (PDF) — rpp-bill-insert-Nov2025 (PDF)
• OEB Net Metering rules — oeb.ca net metering
• Ontario Regulation 541/05 (net metering) — ontario.ca/laws/regulation/050541
• Independent Electricity System Operator (IESO) — pricing explained — ieso.ca electricity pricing
• Home Renovation Savings Program (HRS/HRSP) eligibility — saveonenergy.ca HRS program
• OEB Bill Calculator — oeb.ca bill calculator

If any number changes (the OEB resets rates each November 1, sometimes also May 1), this article will be updated. The Date Modified stamp reflects the last verification.

• Solar Calculator Ontario — Free Cost and Savings Estimator
• How Many Solar Panels Do I Need in Ontario? Calculator + Formula (2026)
• Net Metering Ontario explained
• Solar Payback Period Ontario 2026: How to Calculate It
• Solar Panel Cost in Canada 2026 — Prices Per Watt by Province

Energy arbitrage on Ontario's ULO plan is one of the most powerful tools in residential solar today, and the rate spread is genuinely the best in Canada. But the math is unforgiving. Every assumption — load shape, battery sizing, round-trip efficiency, seasonal solar curve, peak-window overlap — has to be modelled honestly. When a solar company shows you a savings number that depends on 100% of your load magically being charged at 3.9¢, that is not arbitrage. That is marketing.

Use a neutral tool. Ask hard questions. Confirm your utility actually lets you switch to ULO before signing anything. And run the numbers more than once. Run your home through the Solar Calculator Canada Ontario tool →

Last verified against OEB Regulated Price Plan rates effective November 1, 2025 to October 31, 2026. Rebate amounts, OEB rates, and net metering rules can change — verify current terms with the Ontario Energy Board, Save On Energy, and your local distribution company before making purchase decisions. This article is informational and is not tax, legal, or financial advice.