Ontario FIT program and a tax question

[Dan Lavoie]

Hello, I am shopping for a rural property that could accommodate a ground base solar system under the Ontario FIT program. I would like to install a PV system on the property first and then build my residence several years later. My questions are:

1) Under the conditions set by the FIT program, could I have a PV system without a residence on the property?

2) To meet the strict conditions set by the FIT program, the PV system would need be about 400 yards from the closest transformer. Would the 400 yards of power lines be considered part of the PV system and be tax deductible?

3) How important are Priority Points to get approved for the FIT program? Do I really need to get a Municipal Council Support Resolution? I am within the city of Ottawa with lots of red tape so would anyone know how much effort will be required to get a City of Ottawa Council Support Resolution?

Thank you

[Rob Beckers]

Hi Dan,

Just to make sure: We're talking about 'FIT' and not the 'MicroFIT' program, correct? The rules for either are very different from each other. I'm in the middle of going through the FIT process; we recently received a contract offer from the OPA (this is for a 100kW roof mounted array).

To answer your questions, to the best I know (which admittedly is very limited):

1) The FIT program has nothing to do with residential housing or construction. You don't need a house or any other structure for a ground mounted FIT.

2) Where does that reference of "400 yards from the nearest transformer" come from? I don't recall reading anything in the rules about proximity to a TS (as mentioned though we are doing a rooftop small FIT, maybe different in this regard from ground mounted).

In general, you do need what's called a "pre-FIT" from your LDC. For this the LDC looks at the feeder and transformer/distribution station that your FIT would get connected to, and they look if there is sufficient capacity to accommodate your project. If you don't get the green light from a pre-FIT you can't apply for a FIT contract.

3) My understanding is that priority points have become very important. The city council resolution is pretty well the minimum to have a chance at a contract offer. Reason is that the OPA processes applications based on points; the ones with the most points are looked at first, and of those, the ones that have connection capacity proceed first to a contract offer.

Being from Ottawa (and living within its city limits) I feel for you! Nothing is easy or cheap when dealing with that municipality.. It was the main reason why we built the new office/warehouse in Kemptville. Dealing with North Grenville was an absolute pleasure in comparison.

-RoB-

[Dan Lavoie]

Thanks Rob for the quick reply. I would like it to be a FIT project in order to exceed the 10kW limit. The land is Rural-Residential and based on this page http://fit.powerauthority.on.ca/fit-program/eligibility-requirements/non-rooftop-solar/residential-land-use
I must screen the project.
If your project is proposed to be located on rural-residential land you must also acknowledge, in the prescribed form, that you will visually screen the project from neighbouring residential properties as well as adhere to the setback standards. If awarded a contract, you will be required to visually screen the project and adhere to the setback standards for the term of the contract.

I mentioned the site is 400 yards from the closest pole because it will cost considerably to connect the site to the grid. There is no infrastructure yet on site. Would you know if the 400 yards of wire, poles and the driveway to the PV system are tax deductible because without this basic infrastructure there can't be a PV system?

[Rob Beckers]

First off, yes, ALL expenses directly related to the FIT project, including application costs, installation costs, maintenance, infrastructure costs, etc. are tax deductible. Yours is a business venture, in fact it entails investments with a certain amount of risk (you don't know if you will get a FIT contract yet you have to spend a certain amount of money to apply). So, absolutely tax deductible. Where things get shady is in indirectly related costs, that's where a good accountant pays for themselves.

Now, your wording of '400 yds from the closest pole' is ambiguous. If those 400 yards are public (or utility easement) land then you will have to pay the utility to install the needed poles and wiring. This will be part of the CIA (Connection Impact Assessment) and the LDC will present you with a proposal regarding connection cost, including extending the lines. Your connection cost are of course a tax deductible expense.

If that 400 yards is on your own land then you will be on the hook to either bury cable or plant poles and string it along there. Once again that is a regular business expense, and therefore deductible. It will also be much cheaper than having the utility do this (their rates for poles/wires are out-of-this-world expensive).

-RoB-