Our climate challenge is an energy crisis. We need to transition to an electrified economy to meet the aggressive greenhouse gas emissions targets required to stabilize the climate. Investing in solar energy is one of the most effective and immediate ways to make this transition. With new financial incentives available, there has never been a better time to act.

The Clean Technology Investment Tax Credit (CT ITC) is making returns on solar projects better than ever for many Canadian businesses. It is one of the easiest, and most impactful subsidies in renewable energy ever offered. Simply invest in Clean Technology for your business, and claim a 30% tax credit at tax time.

Eligibility for the Clean Technology Investment Tax credit

The latest Federal budget in Canada has expanded the eligibility criteria for the Clean Technology Investment Tax Credit (CT ITC). Under this new policy, tax paying corporations can now claim up to 30% of their investment in solar projects as a refundable tax credit. This means that even organizations without large tax liabilities can still benefit from the program, making solar more accessible than ever.

You may claim multiple clean economy ITCs for the same project, if the project includes different types of eligible property. Eligible CT properties include CT ITC investments of the following types:

• Equipment used to generate electricity from solar, wind and water energy
• Stationary electricity storage equipment that does not use any fossil fuel in operation (such as batteries and pumped hydroelectric storage)
• Active solar heating equipment, air-source heat pumps and ground-source heat pumps
• Non-road zero-emission vehicles and related charging and refueling equipment that is used primarily for such vehicles
• Equipment used exclusively for the purpose of generating electrical energy or heat energy (or a combination of both), solely from geothermal energy, unless it is part of a system that extracts fossil fuels for sale
• Concentrated solar energy equipment

NOTE: You can generally claim only one of the clean economy ITCs for the same eligible property. For example, you cannot claim the CT ITC if you claim the Carbon Capture, Utilization, and Storage (CCUS) ITC on the particular property.

How it works

This tax credit is claimed as part of your income tax filing in the year following the installation of your solar project.

Your accountant or accounting team will help you work through the submission when you file your taxes.

The CT ITC requires that your solar installer comply with a number of provisions, including wage rates paid to employees. Make sure that your solar installer complies with these requirements to ensure that you will be able to access the tax credit.

How can the Canadian businesses benefit from the CT ITC tax credit

The financial benefits of solar energy are constantly improving and with this tax credit, they are now better than ever in many parts of Canada.

Organizations can lower their electricity bills, protect against rising energy costs, and demonstrate leadership in sustainability by opting solar energy—all while benefiting from a government-backed financial incentive. This tax credit helps make solar energy even more financially feasible for small-scale corporations. It reduces the overall cost, allowing them to regain/recoup their investment more quickly, making solar energy a more viable option for them.

Solar projects offer rapid payback times and long-term energy savings. With production warranty periods of up to 25 years on solar panels and projected lifetimes of 40+ years for solar carports, solar projects provide decades of reliable, low-cost energy.