Energy experts believe by the year 2050, solar energy would have become the largest and most-used source of electricity in the world. [1] Solar power is an easy-to-harness, clean, renewable source of energy that can be accessed almost anywhere across the globe. As long as the sun is up and your solar panels or photovoltaic cells are fully functional, you can collect the radiant energy emitted by the sun for domestic, commercial, or industrial purposes.
More and more people are opting to
live off the grid every year, giving up public utilities for self-provided
amenities, such as power, cooking energy, and clean water. They generate their
own electricity, purify rainwater, and have no connections to any
government-provided utility services. If people can set themselves up to live
comfortably this way, they wouldn’t expect to be charged tax by the government
on electrical power generated in their own homes.
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In August 2017, Kris Currie from Prince Edward Island, Canada, called out his government on a classic case of “tax extortion” protected by federal law. [2] He spent $46,000 to purchase and install 35 solar panels in his home, only to continue paying the Harmonized Sales Tax on the energy he generates himself. He didn’t receive any grants from the government to have his solar power units installed. Such grants are common in areas in and around Ontario, where citizens can be awarded tax-rebated grants of up to $5,000 to have solar power systems set up in their homes. [3]
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Currie singlehandedly funded the
nearly $50,000 bill to make his home a net-zero OTG zone where no electric
bills should be sent. However, there was one glitch in the system that he
doesn’t seem to agree with. In fact, people on social media have argued that
Currie might not be living as OTG as he intended.
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Why he’s taxed for solar panels
Currie is part of the P.E.I’s net metering program, which simply means that even though he generates his electricity, he still has an electric meter in his home. If a person’s solar power system happens to get faulty, the program allows them to draw a certain amount of energy from the grid free of charge. While they generate their own electricity, any excess that their homes do not require is funneled into the grid, where customers of Maritime Electric can purchase it. The power sent to the grid is measured by meters installed in individual homes, and this is what Currie is paying tax for.
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According
to the P.E.I authorities and Maritime Electric, it’s within the provision of
the federal tax law to charge HST on homeowners who are part of the net
metering program.
In Currie’s opinion, it’s one of the ploys of the government to discourage people from living off the grid. “It’s nonsense really. It should be exempt,” he said. “We’re using it for heat, for one. Oil’s exempt. Now that we’re producing electricity we’re getting charged for it.”
He doesn’t follow on why he should
pay an HST bill of about $13.49 on 644-KWH he used in April. According to him,
the tax usually goes way up in the winter when every home requires more heat,
and he could end up paying $50–$60 as HST. Unless there’s an amendment to the
law, there’s nothing anyone can do about this because as long as a person has a
meter in his home, he’ll have to pay HST. That one single connection to the
grid means you’re still not 100 percent off of it.
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“Everybody’s on a cost basis when they go to build a house or retrofit a house or try and reduce their energy consumption,” he said to CBC.[4] “It all goes into cost at the end of the day, how many years payback will you get? …The quicker we can get a payback, the quicker this stuff’s going to get produced.”
Tax rewards in the United States for solar energy usage
The U.S is still heavily dependent on fossil fuels for its energy, generating about 77.6 percent of all energy used in the country from coal, petroleum and natural gas. [5] Even though the U.S produces billions of barrels of crude oil every year, it still has to import billions more to serve its business and consumer needs. The country has been trying for decades to become fully self-sufficient in generating clean, environmentally-safe energy, and solar energy is one bright prospect. Wind energy from turbines is promising as well, but not every zone gets enough wind to produce sufficient electricity.
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In 2005, the government came up with
the federal solar tax credit, popularly called the Investment Tax Credit, aimed
at encouraging citizens to utilize more solar power. [6] The Act was supposed to expire at
the end of 2007, but it just kept getting extended until a consensus was
reached in 2016. They would allow five more years for the solar industry to
reach full maturity and the ITC would be cut off. Between 2016 and 2019, the
federal tax credit allowed solar power users to deduct 30 percent of the cost
of installing a new solar system from their federal taxes.
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However, subsequent deduction rates
had already been set in place for the ITC, targeted at owners of new and
residential solar systems:
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2020: 26 percent
2021: 22 percent
2022 and onwards: 10 percent (This
affects only commercial systems and there is no deduction for residential
systems.)
Solar power is a renewable source of energy that has no effects on the environment. No air pollution, water pollution, and noise pollution from heavy machinery. It makes good use of natural sunlight and has no business increasing the carbon footprint in anybody’s home. Citizens should be encouraged and supported by the government to utilize more solar power.
Brittany is a freelance writer and editor with a Bachelor of Science in Foods and Nutrition and a writer’s certificate from the University of Western Ontario. She enjoyed a stint as a personal trainer and is an avid runner. Brittany loves to combine running and traveling, and has run numerous races across North America and Europe. She also loves chocolate more than anything else… the darker, the better!