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Commercial Solar Benefits

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Under the Capital Cost Allowance (CCA) regime in the income tax system, Class 43.2 of Schedule II to the Income Tax Regulations provides accelerated CCA (50 per cent per year on a declining balance basis) for specified clean energy generation and conservation equipment. Providing accelerated CCA in this context is an explicit exception to the general practice of setting CCA rates based on the useful life of assets. Accelerated CCA provides a financial benefit by deferring taxation. This incentive for investment is premised on the environmental benefits of low-emission or no-emission energy generation equipment.

Here is an example of how this works:

If your income profits are below $500,000 and your solar array is installed for $200,000 you get to write-off 50% per year on a declining basis.

50% $100,000 13% $13,000
50% $50,000 13% $7,500
50% $25,000 13% $3750
50% $12,500 13% $1875
50% $6,250 13% $937.50
50% $3,125 13% $468.75
Total     $27,531.25

Finished write off on a $200,000 solar array is $27,531.25 if profits are under $500,000.

If your income profits are over $500,000 and your solar array is installed for $200,000 your tax bracket goes to 26%.

50% $100,000 26% $26,000
50% $50,000 26% $13,000
50% $25,000 26% $7500
50% $12,500 26% $3750
50% $6,250 26% $1875
50% $3,125 26% $937.50
Total     $53,062.50

Finished write off on a $200,000 solar array is $53,062.50 if your profits are over $500,000.

Government Incentives

Are there any government incentives available? Residential – unfortunately there are no incentives at this time in British Columbia.

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