As a homeowner participating in the program you will become the proprietor of a business.
When a homeowner purchases a Solar Logix PV system, and enters into a 20 year contract under the Ontario microFIT program, the homeowner becomes a proprietor of a business. As a proprietor, the homeowner must report all income from the MicroFIT contract as taxable income on their personal income tax return. Also, the homeowner may deduct all expenses related to the Solar Logix PV system from their taxable income, including the cost of the system.
Under the Income Tax Act, any expense incurred in the year that is for the purpose of gaining or producing income from a business and is reasonable in the circumstances, is deductible for income tax purposes. In addition to the cost of the system, deductible expenses relating to your Solar Logix PV system would include, but are not limited to the following:
- Insurance costs relating directly to the Solar Logix PV system
- Interest on the system loan
- Life insurance on the system loan
- Bank charges for the business account
- Office supplies related to storing documents, maintaining the books and records of the business, or other business operations
- Regular fee paid to Ontario Hydro for connection to the grid
- The capital cost of a computer used to monitor the system (100% deductible in the first year with any personal use component factored out)
- System maintenance costs such as cleaning
- System monitoring costs
- Tax preparation costs relating directly to the Solar Logix PV system business
- Costs relating to moving the system to a new location