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
Receive up to $5000 off your solar power system and finance with a Zero Down Zero Interest Loan with the new Federal Canada Greener Homes Grant.
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