Capitalize, capitalize, capitalize.
No, I don't mean your sentences. I mean your investment. MicroFIT income is taxable personal business income. That means you pay income tax on your MicroFIT income at your highest marginal rate. That's bad and may take a large chunk out of your MicroFIT benefit. But you can fight back:
If the income is business income, then the cost is a business cost. Your investment in your MicroFIT system is a capital expense that generates business income. You can write off your entire investment, over time, against the income. It's called 'depreciation' or, in Canada Revenue Agency language, Capital Cost Allowance (CCA). Every year you can take a portion of your initial investment and deduct it from your income at tax time, thus pay less tax. And that's a good thing. Right?
We're not tax accountants here at Generation Solar, but we want you to get the most benefit you can. Talk to a tax adviser for a full understanding on how it would benefit your particular situation. Be sure to *include* the total system cost, utility connection cost, in the CCA calculation.
And don't forget to deduct any system operating costs (maintenance, service calls, additional insurance costs, etc.) from MicroFIT revenues on an ongoing basis.
If you get yourself an HST number you can claim back the HST on all system costs. If not, then HST can be included in the CCA calculations, too. Note: Getting an HST number will allow you to maximize the return on your MicroFIT investment.