Solar Incentives for Alberta Small Businesses

What incentives can a small business look for?

Three layers are worth checking. First, federal programmes aimed at business energy efficiency or clean technology, some of which take the form of grants and some of which work through the tax system. Second, provincial and utility programmes, which have included rebates, financing help and rules about connecting generation to the grid. Third, ordinary tax depreciation on the equipment. Terms and open dates change, so treat everything you read in a news item as a lead and not as an offer. The broader tour is in the incentives guide, and the investment credit concept is in the clean technology credit explainer.

Depreciation in plain terms

When a business buys equipment, the cost is usually deducted over several years at a rate set by the tax rules for that class of asset, and some years have had faster treatment. An illustration with round numbers: if equipment costs 50,000 dollars and the allowed first-year deduction were a given percentage, the deduction would be that percentage of the cost, with the balance claimed in later years. The actual rate and the eligibility depend on the year and the asset, which is why the capital cost allowance guide is the place to start and an accountant is the place to finish. See also the small business tax guide.

How to check what is open

Use the Government of Canada energy-efficiency and business pages, the Alberta ministry responsible for energy, and your electricity retailer or distributor. Write down programme names and the date you looked. Check four things for each: whether you must apply before purchase, whether you can stack it with another programme, whether the installer needs a listing, and whether the credit or grant reduces the amount you can depreciate.

Rules for connecting and exporting power come from the provincial regulation, summarised in the micro-generation guide, and the credit mechanism is explained in the net metering guide.

Questions to put to an installer

• Which programmes does the quote assume, and which are confirmed in writing?
• How was production estimated, and what shading and snow were assumed?
• Who handles the permit and the utility connection?
• What does the warranty cover and who services it in this region?
• What is the payback with and without each incentive?

Compare at least two quotes using the installer checklist. A business also has a daytime load advantage: shops, offices and workshops often use most of their power while the sun is up, so more of the output offsets purchases at full retail price.

Financing, leases and the cost of waiting

Businesses can buy outright, borrow, or have a third party own the system. Each choice changes who can claim depreciation and who bears risk, as the lease and PPA guide and the financing comparison describe. Waiting for a better programme is a gamble, because programmes can also end. The honest approach is to price the project without any incentive and treat support as a bonus. For records, use the paperwork checklist. The efficiency-first thinking behind Drake Landing applies here as well: reduce the load first, then size the supply.

Leased premises and shared buildings

Many small businesses rent. A tenant usually cannot put panels on a roof without the landlord's written consent, and the landlord may own the benefit of any fixed equipment. Settle three points in writing before any quote is signed: who pays, who owns the equipment, and who removes it if the lease ends. If the building has several tenants, ask how the output would be metered and credited between them, since that is a utility question as well as a legal one.

The same questions apply to a business that owns its building but expects to sell it. A buyer will want to know the contract terms and the production record.

Quick answers