Taxation of Properties with Solar PV System

The question of property tax changes after a PV systems in installed on your house has never really been clarified by the local or provincial governments. Adding a PV system to your home increases the value of it [assets and potential revenue]. Of course, some may disagree and prefer not to buy a house with panels.
I have not heard of any homeowner facing a property tax re-assessment. But there is good news, released 2 August 2011. The Ministry of Finance has released a proposed regulatory amendment to the Assessment Act to provide greater clarity and certainty to property owners, energy generators, municipalities and the Municipal Property Assessment Corporation regarding the property tax treatment of renewable energy facilities. The proposed policy would apply to electricity generation installations that utilize solar, wind, or anaerobic digestion.
In summary, for roof-top and ground-mounted small scale solar systems:

• Roof-top: The assessment and tax classification of property would not change due to the addition of a rooftop energy generation installation.
• Ground-mounted installations: the property tax treatment will depend upon the size of the facility as well as the entity who is doing the generation - Small-size ground installations (up to 10 kW) would not result in assessment increase or change in tax classification.
• Medium-size ground installations, with generation capacity over 10 kW up to 500 kW, would be taxed based on the surrounding land use (e.g. residential, farm, multi-residential, commercial).

Essentially, a house with a microFIT project would continue to be taxed as a house and not as a business. Also, the house would not be assessed to a higher tax rate due to an increased value.
This is great news - we had wondered all along if our property tax would increase due to our PV system. It would be disappointing if the government paid you to generate renewable energy then turn around and increase your taxes to claw back a part of that revenue. On a small PV system, even a couple hundred dollars would have a large impact on the financial viability of the project [see my recent post]. Secondly, this would act as a disincentive to produce renewable energy - something that is socially beneficial. Thirdly, I have never seen any information from the Ontario Power Authority to say the $0.802/kWhr accounted for increased taxation.
There is more details on wind and larger solar projects that I won't get into here. On Farm anaerobic digestion systems (even systems over 500 kW) are taxed at the farm rate.

July 2011 PV Revenue Results

In my previous post I show that all but one day had very high PV generation for our system over July 2011. I don't complain about the one lower output day as we desperately needed the rain. On the 20 June 2011 we broke even since the winter where our cumulative revenue exceeded our cumulative loan payments. We had a very sunny June and we continued to add to our surplus so that by 1 July we started the month with $58.60 surplus. Don't forget, this is a surplus on a PV system that was over $31,000 and we had less than 2 more months to earn a little on our investment.
July was a very good month, adding to June's very strong output [and therefore revenue]. My chart below shows the cumulative revenue, loan payments, and microFIT payments we received.

Cumulative revenue, microFIT payments, and loan payments to 31 July 2011, 4.9 kW PV system.

We see the following:

• Revenue has exceeded loan payments by $341 by the end of July
• Return to date is 1.08% [profit over loan value]
• microFIT payments are a little irregular [number of days for each payment has been 49, 70, 68, 43, and 63]. I suspect that microFIT payments are manually processed at Guelph Hydro with "flexible" schedule
• Slope of cumulative revenue is greater during May-July vs. Aug-Nov [clearly showing the tendency of longer days in the summer, less cloud cover]. This trend should continue for the rest of the summer given the long range forecasts, though some rain is forecasted over next 2 weeks. 

I did do a boo-boo in some previous charts. I was showing earlier versions of the figure above with the microFIT payments including HST. The payments from Guelph Hydro includes HST. I must submit this to Revenue Canada so I incorrectly was including that tax as part of my revenue. The chart above is corrected and does not include HST. I shall talk about taxes in a forthcoming blog post.

July 2011 PV Results

A hot July ends and it has been a good month for our PV system. The very hot weather has had a very real decrease in our output, but the sunny long days has still been good for overall production. I counted 7 days that were either "pure blue" skies, or virtually cloud free other than the odd passing cloud. Many more had occasional cloud passage. However, we had many days that were 30 deg C and this hot weather reduced the peak output levels. I'll post examples of those soon.
Below I am providing the raw daily totals for July. The days with 30 or more kWhrs were virtually cloud-free, and you can see the number of days over 25 kWhr is also high. Only 1 day [28 July] was low - a cloudy day with even a bit of rain which was much needed.

July 2011 daily kWhr PV production, 243 Farley Dr., Guelph, Ontario.

The next figure shows the total daily production since we started. Despite the longer days in July compared to March, total daily output is trending down to 30 kWhr from March's 35 kWhr.

Daily kWhr PV production up to July 2011, 243 Farley Dr., Guelph, Ontario.