Two utilities, a $13 billion dam that overran its budget, and Canada's cloudiest provincial capital. Here's the honest solar and electricity story for Canada's easternmost province.
Newfoundland and Labrador's electricity story is one of Canada's most complex — a privately owned utility serving most island residents, a Crown corporation serving Labrador and remote communities, and the shadow of the Muskrat Falls hydroelectric project whose $13+ billion cost overrun reshaped NL's energy finances for a generation. At approximately 15.8¢/kWh blended, NL sits just above New Brunswick in moderate solar ROI territory. But the story varies dramatically between the island and Labrador — where remote communities on diesel generation represent one of Canada's strongest off-grid solar opportunities.
Most NL island residents are served by Newfoundland Power, which purchases wholesale power from NL Hydro and distributes it to approximately 270,000 customers. Rates are regulated by the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB).
| Rate Component | Rate (2026) | Notes |
|---|---|---|
| Customer Charge (fixed) | ~$10.50/month | Fixed monthly fee regardless of consumption |
| Tier 1 Energy Rate | ~12.0¢/kWh | First 1,200 kWh/month (winter higher threshold) |
| Tier 2 Energy Rate | ~14.5¢/kWh | All consumption above Tier 1 threshold |
| Rate Mitigation Adjustment | Included in rates | Muskrat Falls cost recovery managed through provincial/federal plan |
| HST | 15% | Newfoundland and Labrador's harmonized sales tax |
| All-In Blended Average | ~15.8¢/kWh | Including customer charge and 15% HST at 1,000 kWh/month |
ℹ️ Rate Mitigation Plan: Without provincial and federal intervention, Muskrat Falls costs would have pushed NL electricity rates significantly higher — some estimates suggested rates could have doubled. The Rate Mitigation Plan uses a combination of federal transfers, provincial revenue, and managed debt repayment to hold increases below what the project's full cost recovery would otherwise require. This plan is why NL rates sit at 15.8¢/kWh rather than 25¢+ today.
Understanding who serves your property is essential before planning solar in NL — the two utilities have different rate structures, programs, and net metering processes.
Serves ~90% of island customers — most towns, cities, and rural areas connected to the island grid. Privately owned by Fortis Inc., a St. John's-based Fortune 500 energy company. Regulated by the PUB. Purchases bulk power from NL Hydro and distributes it. Responsible for the poles, wires, and meters that serve most NL homes.
Serves rural island communities not connected to the main grid, most of Labrador, and operates NL's major generating stations including Churchill Falls and Muskrat Falls. Also wholesales power to Newfoundland Power. Remote Labrador communities — Happy Valley-Goose Bay, Labrador City, Churchill Falls, and isolated coastal communities — are all NL Hydro customers.
⚠️ Remote Island Communities: Some isolated coastal communities on the island of Newfoundland — particularly along the South Coast and remote bays — are not connected to the main island grid and rely on NL Hydro diesel generation. These communities pay effective electricity costs of 40–80¢/kWh once diesel fuel, transportation, and generator maintenance are factored in. Off-grid solar is transformationally cost-effective for these communities.
No discussion of NL electricity rates is complete without understanding Muskrat Falls — a project that defines the province's energy finances for decades to come.
🌊 Churchill Falls — The Other Dam: NL also operates Churchill Falls Generating Station (5,428 MW) — one of the world's largest underground hydroelectric facilities. However, most of its power is sold to Hydro-Québec under a controversial 1969 contract at a fixed price of about 0.25¢/kWh — far below market rates — until 2041. NL receives very little financial benefit from its most powerful generating asset until the contract expires. This deal has been the source of significant resentment in Newfoundland for decades.
ℹ️ Why It Matters for Solar: Muskrat Falls' cost overrun created the financial pressure that drives NL rate increases. With the Rate Mitigation Plan managing the immediate impact, rates have increased moderately. But the underlying debt remains — and as federal and provincial mitigation funding eventually winds down, rate increases above the current trajectory are likely. Solar installed today benefits from locking in fixed-cost generation before this pressure fully materialises.
Newfoundland and Labrador sits second-lowest in Atlantic Canada for electricity rates — just above New Brunswick:
ℹ️ Why NL Rates Are Relatively Moderate: Despite the Muskrat Falls overrun, NL benefits from access to significant hydroelectric resources and the Rate Mitigation Plan that has contained immediate cost impacts. Without mitigation, NL would likely have Atlantic Canada's highest rates. The 15.8¢/kWh figure reflects a managed outcome — not the unmitigated cost of Muskrat Falls recovery alone.
Solar economics in NL vary dramatically depending on whether you're on the island or in Labrador — the climate, utility, and alternative energy costs are completely different.
| System Size | Annual Production (St. John's) | Annual Savings at 15.8¢ | Est. System Cost | Simple Payback |
|---|---|---|---|---|
| 5 kW | ~6,255 kWh/year | ~$988/year | ~$15,000–$20,000 | 15–20 years |
| 10 kW | ~12,510 kWh/year | ~$1,977/year | ~$25,000–$32,000 | 13–16 years |
| 15 kW | ~18,765 kWh/year | ~$2,965/year | ~$35,000–$45,000 | 12–15 years |
*Based on St. John's irradiance (~1,251 kWh/kW/year). St. John's has the lowest solar resource of any provincial capital in Canada due to fog and cloud cover. Assumes 3% annual rate increases and 0.5%/year degradation.
☀️ Labrador's Compelling Off-Grid Case: Many Labrador communities and remote properties rely on diesel generation at effective costs of 40–80¢/kWh — 2.5–5× the island grid rate. At these effective rates, off-grid solar delivers payback periods of 4–8 years rather than 13–16. Labrador also has significantly better solar irradiance than the island — less fog, clearer skies, and more annual sunshine than St. John's. For isolated Labrador camps, lodges, and remote properties, solar paired with battery storage is far more economical than diesel in virtually every scenario.
🌫️ St. John's Fog Factor: St. John's is Canada's foggiest city — averaging over 120 days of fog per year. This meaningfully reduces solar production compared to other provinces at similar latitudes. Inland NL locations (Grand Falls-Windsor, Corner Brook, Gander) receive significantly more annual sunshine than the Avalon Peninsula and produce 10–15% more solar energy per installed kW. If you're inland, use those locations' data rather than St. John's when sizing your system.
| Household Type | Monthly Usage | Pre-Tax Bill | After 15% HST | Annual Cost |
|---|---|---|---|---|
| Apartment / 1 bedroom | 300–500 kWh | ~$47–$83 | ~$54–$95 | ~$645–$1,145 |
| Small home / 2 bedroom | 600–900 kWh | ~$83–$141 | ~$95–$162 | ~$1,145–$1,945 |
| Average NL home | ~1,000 kWh | ~$137 | ~$158 | ~$1,895 |
| Larger home / electric heat | 1,500–2,500 kWh | ~$199–$327 | ~$229–$376 | ~$2,745–$4,515 |
| Rural / well pump / heating | 2,000–4,000 kWh | ~$261–$518 | ~$300–$596 | ~$3,600–$7,150 |
📈 Rate Outlook: NL electricity rates have increased ~22% since 2020 despite the Rate Mitigation Plan limiting the Muskrat Falls impact. As mitigation funding eventually reduces, rate increases of 4–6% annually are expected through 2030 and possibly higher thereafter. By 2030, the blended all-in rate could approach 19–20¢/kWh — improving solar payback periods to 10–13 years. NL ratepayers face some of the most complex long-term rate pressure in Canada.
The chart below shows daily solar production per kW for St. John's — Canada's cloudiest and foggiest provincial capital. Inland NL locations produce 10–15% more annually. Labrador locations (Happy Valley-Goose Bay) produce 20–25% more than St. John's.
❄️ NL's Winter Solar Challenge: St. John's sees the largest winter solar drop of all Atlantic provinces — approximately 70% reduction from summer peak. Combined with frequent fog and cloudy periods from November through March, off-grid systems on the Avalon Peninsula require 6–8 days of battery autonomy and a reliable backup generator. Inland NL and Labrador locations are meaningfully more solar-productive in winter due to less marine fog influence.
→ Use our Solar Panel Calculator with your NL location's seasonal irradiance to properly size your system.
Both Newfoundland Power and NL Hydro offer net metering programs, regulated by the PUB.
✅ System Size
Up to 100 kW for residential customers under both Newfoundland Power and NL Hydro programs.
✅ Credit Rate
Credits applied at the retail energy rate, carried forward monthly with an annual true-up settlement.
⚠️ Two Utilities
Apply through your specific utility — Newfoundland Power or NL Hydro. Processes and timelines differ slightly between them.
ℹ️ Avalon Fog Consideration: Because St. John's fog significantly reduces winter solar output, net metering credit accumulation on the Avalon Peninsula is heavily weighted toward summer months. Inland NL locations will see more balanced year-round credit accumulation. If you're on the Avalon, size your system to maximise summer production rather than trying to be fully self-sufficient year-round.
| Year | Blended Rate (pre-tax) | All-In (incl. 15% HST) | YoY Change |
|---|---|---|---|
| 2020 | ~11.5¢/kWh | ~13.0¢/kWh | — |
| 2021 | ~12.0¢/kWh | ~13.5¢/kWh | +3.8% |
| 2022 | ~12.3¢/kWh | ~14.0¢/kWh | +3.7% |
| 2023 | ~12.8¢/kWh | ~14.5¢/kWh | +3.6% |
| 2024 | ~13.3¢/kWh | ~15.0¢/kWh | +3.4% |
| 2025 | ~13.7¢/kWh | ~15.5¢/kWh | +3.3% |
| 2026 (current) | ~14.0¢/kWh | ~15.8¢/kWh | +1.9% |
📈 22% increase since 2020 — with more to come: NL rates have risen steadily despite the Rate Mitigation Plan limiting immediate Muskrat Falls impacts. As federal and provincial mitigation funding is structured to wind down, increases of 4–6% annually are expected through 2030 and potentially higher in the mid-2030s as full cost recovery resumes. NL ratepayers face some of the most complex long-term rate pressure of any Canadian province.
Newfoundland Power's residential rates in 2026 work out to approximately 15.8¢/kWh blended, including the fixed customer charge (~$10.50/month), tiered energy charges (Tier 1 ~12.0¢, Tier 2 ~14.5¢), and 15% HST. NL Hydro customers in Labrador and rural areas may pay different rates depending on their community and generation source.
NL has two providers: Newfoundland Power (owned by Fortis Inc.) serves ~90% of island customers and purchases wholesale power from NL Hydro for distribution. NL Hydro (Crown corporation) serves rural island communities, most of Labrador, and operates the province's major generating stations including Churchill Falls and Muskrat Falls.
Muskrat Falls is an 824 MW hydroelectric project on Labrador's Lower Churchill River that cost over $13 billion — more than double its original $6.2 billion budget. Built by Nalcor Energy (now NL Hydro), the overrun threatened to push NL electricity rates to among Canada's highest. The provincial and federal governments implemented a Rate Mitigation Plan to limit the immediate impact, holding increases below what full cost recovery would otherwise require. The project's debt continues to influence NL rate increases for decades.
It depends significantly on location. On the island, particularly the Avalon Peninsula, St. John's fog meaningfully reduces solar production, resulting in payback periods of 13–17 years at current rates — moderate but not exceptional. Inland NL locations see 10–15% better production. In Labrador, remote communities on diesel generation at 40–80¢/kWh effective rates see dramatically better solar ROI — often 4–8 year payback periods. Use our Solar ROI Calculator for your specific location.
Yes. Both Newfoundland Power and NL Hydro offer net metering for systems up to 100 kW. Credits accumulate at the retail rate, carry forward monthly, and settle annually. Apply through your specific utility — processes differ slightly between Newfoundland Power (island) and NL Hydro (Labrador and rural island areas).
At ~15.8¢/kWh, NL ranks in the lower-middle range nationally — above Quebec (8.3¢), Manitoba (10.6¢), BC (10.97–14.08¢), and NB (15.4¢); but below Ontario (17.0¢), Saskatchewan (18.6¢), NS (19.1¢), PEI (19.7¢), and Alberta (22.9¢). See our full Canada comparison for the complete breakdown.
See how Newfoundland's ~15.8¢/kWh stacks up against every other province and territory.
Newfoundland electricity rate data sourced from Newfoundland Power's approved rate schedules regulated by the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB) as of July 1, 2026. Blended rates calculated at 1,000 kWh/month including customer charge, tiered energy charges, and 15% HST. NL Hydro rates for Labrador and rural island communities may differ. Muskrat Falls cost figures sourced from Nalcor/NL Hydro public proceedings and the Commission of Inquiry reports. Solar irradiance data derived from NASA POWER database for St. John's (47.56°N, 52.71°W). Inland NL and Labrador locations produce meaningfully more solar energy annually. Savings estimates assume 3% annual rate increases and 0.5%/year panel degradation. All figures in Canadian dollars.