Principal Issues: Are solar photovoltaic arrays (solar panels) eligible for the HRTC?
Position: Yes if permanently installed
Reasons: Enduring in nature.
August 13, 2009
XXXXXXXXXX
Dear XXXXXXXXXX :
The office of the Honourable James M. Flaherty, Minister of Finance, has forwarded to me a copy of your correspondence, which I received on July 7, 2009, regarding the eligibility of solar photovoltaic arrays (solar panels) for the new home renovation tax credit (HRTC).
The proposed HRTC will provide individuals with a temporary 15% non-refundable income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009, and before February 1, 2010, for agreements entered into after January 27, 2009. Taxpayers can claim this credit for the 2009 tax year on eligible expenditures exceeding $1,000, but not more than $10,000, which will result in a non-refundable tax credit of up to $1,350.
The legislation regarding the new HRTC, which was introduced in the federal budget tabled on January 27, 2009, has not yet been made public. However, Mr. Flaherty has announced that expenditures will qualify if they relate to a renovation or an alteration of an eligible dwelling, including land that forms part of the eligible dwelling, and if the renovation or alteration is of an enduring nature and is integral to the eligible dwelling. Such expenditures will include the cost of labour and professional services, building materials, fixtures, equipment rentals, and permits.
An eligible dwelling is a housing unit that is eligible at any time after January 27, 2009, and before February 1, 2010, to be an individual's principal residence. In general, a housing unit is considered to be eligible to be an individual's principal residence if it is owned by the individual and ordinarily inhabited by the individual, his or her spouse or common-law partner, or his or her children. Therefore, any housing unit that an individual owns and uses personally, including a home and a cottage, qualifies for the HRTC.
Solar panels and solar panel trackers that are permanently installed are generally considered to be part of the dwelling and would qualify for the HRTC. However, portable solar panels would not qualify for the HRTC.
You can find more information on the HRTC on the Canada Revenue Agency Web site at www.cra.gc.ca/hrtc and in the Government of Canada brochure available at www.actionplan.gc.ca/grfx/docs/HRTC_eng.pdf.
I trust that the information provided will be helpful.
Sincerely,
Jean-Pierre Blackburn, P.C., M.P.
Minister of National Revenue
Andrea Boyle
(613) 946-3252
2009-033138