Ontario's MicroFIT program provides a mechanism for individuals to sell electricity to the Ontario Power Authority that is generated from, e.g., photovoltaic solar panels. CRA maintains FAQs on the MicroFIT program at www.cra-arc.gc.ca/tx/bsnss/thrtpcs/nt-ft/q1-eng.html.
As per Question 7 of the FAQs, Reg. 1100(24) limits the CCA on solar equipment to the income from selling the electricity generated therefrom.
Where a principal residence is sold that has solar cells, CRA stated:
[W]hen you sell your residential home, a reasonable portion of the sale price must be allocated as proceeds of disposition of the Solar Equipment. The proceeds of disposition should be reported in Area A on page 4 of your T2125 Statement of Business or Professional Activities. The balance of the sale price is generally allocated to the residential home. If the residential home was designated as a principal residence for every year that it was owned, there will be no income tax consequences on the disposition. You should also note that the disposition of the Solar Equipment may result in a recapture into income of any CCA claimed on the equipment and such recaptured income must be reported for income tax purposes.
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