Recent updates in government incentives can significantly reduce the costs of installing solar panels in your business. Here’s a breakdown of the current benefits and how you can maximize your savings.
Clean Technology (CT) Investment Tax Credit (ITC)
As of June 20th, 2024, the Federal Government has enacted Bill C-59, which introduces a 30% Investment Tax Credit (ITC) for commercial businesses. This refundable tax credit is designed to make solar energy more affordable by allowing businesses to claim back 30% of their solar installation costs.
This ITC can be combined with other financial incentives, such as the Capital Cost Allowance (CCA), enhancing your potential savings.
Capital Cost Allowance (CCA)
For renewable energy investments, businesses can benefit from the Capital Cost Allowance (CCA) which permits a 75% write-off of the solar project costs in the first year. For businesses in the 28% marginal tax bracket, this translates to receiving a tax credit equivalent to 21% of the project cost in the first year.
BC Hydro Rebates
In addition to federal incentives, BC Hydro has introduced new rebates for businesses installing solar systems. As of June 27, 2024, businesses can claim rebates up to $25,000. This is based on $1,000 per kW of installed capacity, providing a substantial reduction in your initial investment.
Combining Incentives for Maximum Savings:
When you combine the Federal ITC, the CCA, and BC Hydro rebates, you can recover up to 74% of your solar panel installation costs within the first year!
Here’s how it breaks down:
30% Federal Investment Tax Credit
21% Capital Cost Allowance (based on 28% tax rate)
Up to $25,000 BC Hydro Rebate
By leveraging these incentives, businesses have the opportunity to significantly offset the costs of transitioning to solar energy, making it an even more attractive investment.
Important Notes:
Capital Cost Allowance (CCA): Based on the 28% marginal tax rate, businesses can write down 75% of the solar project cost in the first year of operation for 2024 and 2025. This percentage will decrease in subsequent years, so it’s crucial to take advantage of this high write-off while it’s available.
Federal ITC: The Clean Technology Investment Tax Credit allows businesses to write off 30% of solar project costs in the first year. Ensure you meet all federal guidelines to qualify for this credit.
Consult Your Financial Advisor: It is important for business owners to consult with financial advisors or institutions to understand how these incentives apply to their specific situation, as percentages and qualifications may vary. Penfolds Roofing & Solar Inc, and its subsidiaries, are not responsible for any CCA variances or any Federal Government decisions that may alter The Federal Investment Tax Credit (ITC), including but not limited to Bill C-59 passing legislation.
At Penfolds Roofing and Solar, we are committed to helping businesses navigate these opportunities and maximize their savings. Contact us today to learn more about how solar energy can benefit your business and how you can take advantage of these generous incentives.
