|Arnie says ``Get to dah CCA choppah !!!``|
Under the capital cost allowance (CCA) regime in the income tax system, Class 43.2 of Schedule II to the Income Tax Regulations provides an accelerated CCA rate (50 per cent per year on a declining-balance basis) for investment in specified clean energy generation and conservation equipment.
Included is eligible equipment that generates or conserves energy by:
- using a renewable energy source (for example, wind, solar, small hydro);
- using a fuel from waste (for example, landfill gas, wood waste, manure); or
- making efficient use of fossil fuels (for example, high efficiency cogeneration systems, which simultaneously produce electricity and useful heat).
Some REITs have been proactive about income-producing green initiatives. Example initiatives can be capital intensive and the useful life of things like solar panels (or their efficiency over time) is uncertain. The budget's more aggressive depreciation allowances will encourage green investments like these. I would favour those property owners investing in Clean Energy Generating Equipment (e.g., Skyline REIT`s solar panels) rather than other LEED point initiatives like say green roofs. Green roofs can help get a plaque on the corporate office wall, and may provide amenity value to tenants in some cases (lower vacancy, turnover benefits?) - but generally they provide just a ``warm and fuzzy``. I would trade that for the ``cold and hard`` cash from solar panel income from the Ontario FIT program and from the 2013 budget improved CCA deduction benefit.