Tax Incentives

Class 43.1 & 43.2 Accelerated Capital Cost Appreciation

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Solar PV projects are eligible to qualify for a Federal Accelerated Capital Cost Allowance (CCA) tax incentive under Class 43.2 of Schedule II to the Income Tax Regulations for specified clean energy generation equipment, which allows for an accelerated write-off of up to 50% per year of depreciation on solar photovoltaic equipment purchased after February 23, 2005. Eligible equipment includes solar thermal, solar air and solar photovoltaic equipment while project size restrictions have been eliminated.

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However, 25% is only claimable in the first year. The deduction cost of the depreciation rate (Class 43.2) only applies to projects over three kilowatts. Solar photovoltaic equipment purchased before February 23, 2005, and before 2012 can qualify for a 30% accelerated (CCA) rate under Class 43.1. In addition, ongoing operation and maintenance costs are also allowable deductions. Solar equipment is under class 34 of solar heating. The deduction amount per year is to the discretion of the owner, the project can be depreciated to $0.00 but not below the installed price.

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For more information, Click Here.

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Ontario PST Rebate on Solar Systems

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Owners of residential premises, including multi-residential buildings, can claim a refund of the 8% Retail Sales Tax (provincial sales tax) paid on new solar energy systems and on any expansions or upgrades to existing systems installed in their premises. Eligible systems include solar photovoltaic systems that convert solar energy into electricity, or solar thermal systems that convert energy into heat. Systems include wiring, controllers, devices that convert direct current into alternate current, the first battery used to store the energy produced, thermal collector panels, pumps, tubing, heat exchangers and insulated energy storage tanks. Eligible systems, expansions and upgrades must be purchased and incorporated into residential premises on or after November 26, 2002 and on or before January 1, 2010. In the case of a new building that incorporates a solar energy system, the tax rebate can be claimed by the owner if the owner has purchased the system, and the builder has not claimed the rebate. To obtain this refund, complete the form "General Application for Refund of Retail Sale Tax" and send it to the address provided on the form. The form must be accompanied by detailed receipts. Purchasers have up to four years from the date of purchase to submit the form. The form can also be obtained from the Ministry of Finance at 1-800-263-7965.

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Click Here, for more information on the RST Rebate.

Click Here, for the RST Rebate form.

Clik Here, for the Solar Energy Systems Rebate Program website.

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Ontario PST Rebate on Wind Systems

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Owners of residential premises, including multi-residential buildings, can claim a refund of the 8% Retail Sales Tax (provincial sales tax) paid on new wind, micro hydro-electric and geothermal energy systems and on any expansions or upgrades to existing systems installed in their premises. Eligible wind and hydro-electric systems may produce electrical or mechanical energy. Eligible geothermal systems are those designed to absorb heat from solar-heated ground. Systems include generators, controllers, wiring, devices that convert direct current into alternate current, the first batteries used to store the energy produced, the tower and associated works for wind energy, pipes and associated works for hydro-electric and geothermal energy, and pumps and heat exchangers for geothermal energy. The rebate does not cover the internal heat distribution system (i.e., ducts). Eligible systems, expansions and upgrades must be purchased and incorporated into residential premises on or after March 28, 2003, and on or before January 1, 2010. In the case of a new building that incorporates one of these systems, the tax rebate can be claimed by the owner only if the contract is with the owner. To obtain this refund, complete the form "General Application for Refund of Retail Sales Tax" and send it to the address provided on the form. The form must be accompanied by detailed receipts. Purchasers have up to four years from the date of purchase to submit the form. The form can also be obtained from the Ministry of Finance at 1-800-263-7965.