Tax question

[Dan Lavoie]

I've recently decided get a microfit system on the roof of my house. I had the roof completely reshingled in preparation for the microfit system. Would anyone here know someone with a knowledge of the Ontario microfit and taxes that I could contact to find out if part of the roofing job could be written off? I live in Ottawa.

Or perhaps has anyone written off part of their roofing job to accommodate a microfit project?

Thank-you

[Rob Beckers]

Dan, interesting question!
I'm in Ottawa as well, and have a MicroFIT system on my roof.

While the CRA does take the view that you're a business when you have a MicroFIT system, and therefore can deduct or write off expenses directly related to that business, I doubt that they will take that as far as re-shingling the roof. What you most definitely CAN do is keep a home office, and deduct all the cost related to your house in proportion to that home office (ie. office is 15% of your home's square footage, so you can deduct 15% of electricity cost, real estate tax, and maintenance such as re-shingling). There must be a limit to how far you can go with this (ie. claiming that the living room and kitchen with 50% of your house's area is your 'office' probably won't fly when audited), I've never tried to push it.

The roof is somewhat more directly related with the solar panels and generating electricity, and I understand your question. You'd have to ask a tax lawyer or accountant to get a more definitive answers, and probably they won't know for sure until someone does this and gets audited.

-RoB-

[Solar Buff]

Interesting topic to look into. Canada is moving in the direction of offering more incentives and tax credits for solar users. This article provides a little more context: http://www.cbc.ca/news/business/taxes/tax-time-2016-solar-tax-treatment-1.3442516

Solar Buffalo
http://www.solarbuffalowny.com/

[Dan Lavoie]

Thanks Rob and Solar Buff for your quick replies.

I have a second question... would you know if I can have both a 10Kw Microfit and a 10KW Netmetering built on the same roof? Thanks again

[Rob Beckers]

Thanks Rob and Solar Buff for your quick replies.

I have a second question... would you know if I can have both a 10Kw Microfit and a 10KW Netmetering built on the same roof? Thanks again

Dan, that's a question I've been wondering about as well...

It used to be that, yes, you could have both. The IESO does not have any rules preventing this (MicroFIT does not care about Net-Metering, nor excludes it). The LDC is the possible issue, since they all require that you go through full-fledged CIA (Connection Impact Assessment) once you exceed 10kW. Very costly and lots of work.

Hydro-One did allow a Net-Metering and MicroFIT on the same property in the past. I've talked to an installer that did just that for a customer. A few weeks ago another installer told me that Hydro-One will not allow him to do this. Did they change their policy? Or is that last installer just wrong?

If you find out please post!

-RoB-

[Ralph Day]

When I installed our microFit in 2010 we could not put our house solar and wind system into a net metering scenario. 10kw per connection point was Hydro One's limit and that was taken up by the microfit install. That may have been on "our" connection point as opposed to H1's connection point as the transformer (hydro one's) was on our pole and lines on our property. That never was clear.

Ralph

[Ronald Cheung]

I've recently decided get a microfit system on the roof of my house. I had the roof completely reshingled in preparation for the microfit system. Would anyone here know someone with a knowledge of the Ontario microfit and taxes that I could contact to find out if part of the roofing job could be written off? I live in Ottawa.

Or perhaps has anyone written off part of their roofing job to accommodate a microfit project?

Thank-you

Hello,
I am looking into having a solar roof system install. The installer I spoke to said the part (portion) of the roof that will have solar panels installed on them can have the cost of replacing shingle be written off as part of your solar project expenses. As a general rule, I was told now that your home is generating income, a percentage of your home expenses (i.e. internet cost) can also be deducted against your solar income.

[Rob Beckers]

Ronald, not sure how far the CRA will allow deductions of home expenses as a "MicroFIT business cost". I've never pushed it to the limits. You may want to talk to an accountant before deducting a re-roof job.

In general, you are certainly allowed to keep a home office, and you can deduct the percentage of square footage of your home office vs. the house of all home expenses. That means heating, electricity, repairs & maintenance, insurance, real-estate tax. The CRA has no issue what that.

Also deductible are any costs directly related to the MicroFIT system. Such as insurance, replacements and repair of equipment, the installation cost etc. The HST is something you can get back as well of course.

What you are asking about is very much in the grey area. Odds are that if you do deduct it you won't be audited, but if you are it could be an unpleasant surprise if the CRA deems this to be cost not directly related to the business.

-RoB-

[Dave Schwartz]

I'm pretty sure a home office just for managing your microFIT installation either wouldn't pass the test from the CRA or wouldn't be worth the effort.

From their website:

(For personal use)

You can deduct expenses you paid in 2015 for the employment use of a work space in your home, as long as you had to pay for them under your contract of employment. These expenses must be used directly in your work and your employer has not reimbursed and will not reimburse you. Also, you must meet one of the following conditions:


The work space is where you mainly (more than 50% of the time) do your work.
You use the work space only to earn your employment income. You also have to use it on a regular and continuous basis for meeting clients, customers, or other people in the course of your employment duties.


(If you register as a business [to recoup initial HST and to collect and remit ongoing HST])

You can deduct expenses for the business use of a work space in your home, as long as you meet one of the following conditions:


it is your principal place of business; or
you use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients.


If you use part of your home for both your business and personal living, calculate how many hours in the day you use the rooms for your business, and then divide that amount by 24 hours. Multiply the result by the business part of your total home expenses. This will give you the household cost you can deduct.

It could be argued that the income is earned on the roof and not in an office. Managing my microFIT takes about 10 minutes every 2 months (download the statement from the LDC's website, transfer numbers to tracking spreadsheet) and about 20 minutes once a year (fill out HST return, use online banking to send in money). While that does constitute 100% of the 'work', it might not pass the 'regular and continuous' part. Also, the hour and 20 minutes a year it is used constitutes 0.015% deductability on the expenses on that portion of the house.

Hardly worth it.

[Ralph Day]

My situation is a little different. I went from off-grid to a microfit. Therefore the cost of utility power is deductible (had to have a house service to monitor the system). Next year the accountant may change the percentage claimed. The high speed internet connection, required for monitoring the system, a percentage of that too is claimed.

Be sure to become a "voluntary registrant" for the HST. For the little amount of paperwork you have to do it's great to get back the HST on your install costs.

Ralph