The Ultimate Guide to Solar Rebates in Canada: Savings for 2026

Solar installation rebates are valuable financial incentives that make it easier for businesses to transition to solar technology. A solar rebate can greatly reduce installation costs, making solar an excellent choice for businesses.

In this article, we will discuss the various federal, provincial and municipal solar rebates available in Canada, as well as net-metering programs which vary by province. By understanding these incentives, your business can make informed decisions about investing in solar energy, saving on energy costs, and contributing to a greener future.

What Are Solar Rebates?

Governments and other organizations provide solar rebates as financial incentives to lower the cost of installing solar energy systems. There are two primary types of rebates available in Canada for solar technology.

1. Federal Rebates: Solar rebates offered by the Canadian government, such as the Clean Technology Investment Tax Credit (CT ITC).
2. Provincial Rebates: There are provincial solar rebates and/or net metering programs available for businesses offered by most Canadian provinces. An example is New Brunswick’s Energy Smart Commercial Buildings Retrofit Program, or Save on Energy grants available in Ontario for specific regions or sectors.
3. Municipal Rebates: Some cities offer rebates for solar over and above federal and provincial incentives, such as the City of Edmonton’s Solar Rebate Program.

Key Solar Installation Rebates In Canada

Clean Technology Investment Tax Credit (CT ITC)

Overview

Canada’s Clean Technology Investment Tax Credit (CT ITC) is a refundable tax credit that supports the federal government’s broader strategy to increase the adoption of clean energy and reduce carbon emissions. It provides financial incentives for businesses that invest in environmentally friendly alternatives such as clean energy generation. Although not exclusive to solar, solar energy generation is a focal point of this tax credit.

How Much Can Your Business Save with the Clean Technology Investment Tax Credit?

The Clean Technology Investment Tax Credit is a refundable tax credit that offers 30% of capital back for investments in new clean technology assets in Canada between March 28, 2023, and December 31, 2034. This includes the purchase of commercial solar panels.

Eligibility Criteria

• Eligible Investments: The tax credit applies to investments in a variety of eligible clean technologies, including:
  • Clean energy generation
  • Energy storage systems
• Eligible Businesses: Any tax paying Canadian corporation, or any Real Estate Investment Trust (REIT’s).
• Geographic Requirements: The investments must be made within Canada in order to qualify for this tax credit.
• Compliance with Labour Conditions: The government expects all eligible businesses to adhere to certain labour conditions, such as providing fair wages, to ensure eligibility for the full 30% tax credit. Businesses that fail to comply will get a smaller portion of the tax credit.

Tax Incentives

The Clean Technology Investment Tax Credit provides two primary incentives:

• Refundable Tax Credits: Businesses can reduce their tax burden, or get money back at tax time, provided the credit is more than taxes owed.
• Stackable with Other Incentives: You can combine the Clean Technology Investment Tax Credit (CT ITC) with other tax credits and incentives, including those for clean energy investments.

Clean Electricity Investment Tax Credit (CE ITC) *NEW*

Overview 

The Clean Electricity Investment Tax Credit (CE ITC) is a federal refundable tax credit that helps reduce the cost of investing in solar and other clean electricity projects. Unlike many tax incentives, it is designed for organizations that don’t pay corporate income tax, such as municipalities, nonprofits, and Indigenous organizations.

Learn more about how it works here.

How Much Can Your Business Save with the Clean Electricity Investment Tax Credit (CE ITC)?

Non-tax paying entities can receive up to 15% of their project costs back as a refundable tax credit. Additionally, it can be combined with other grants and incentive programs to reduce upfront costs.

Eligibility Criteria

To qualify, the project must be for a property located in Canada, must meet emission thresholds, and the equipment must be new (not leased or used).

Organizations that are eligible for this tax credit include: 

• Certain tax-exempt organizations, including First Nations and Crown corporations
• Taxable Canadian corporations
• Real estate investment trusts (REITs) (in some cases)

Eligible clean energy property includes:

• Non-emitting electricity generation equipment, such as solar PV.
• Additions or upgrades that are part of a refurbishment

Accelerated Capital Cost Allowance (Classes 43.1 & 43.2) *NEW*

Overview 

The federal government offers Accelerated Capital Cost Allowance (ACCA) to encourage businesses to invest in clean energy, such as solar. Under Classes 43.1 and 43.2, eligible clean energy equipment can be written off much faster than standard depreciation, reducing taxable income sooner and improving project cash flow.

Upon request, the Canada Revenue Agency is able to confirm whether you are eligible before project costs are incurred. 

Eligibility Criteria

• The equipment must qualify under Class 43.1 or Class 43.2 of the Income Tax Regulations.
• To qualify for Class 43.2, the equipment must otherwise be eligible for Class 43.1 and be acquired after February 22, 2005 and before 2025.
• The property must be acquired after November 20, 2018 and become available for use before 2028 to qualify for the first-year deduction.
• 50% of the project’s total capital costs must relate to eligible Class 43.1 or 43.2 equipment. If unrelated costs total 50% or more, your project may be ineligible. 
• Eligible equipment and expenses must meet the technical requirements set out by Natural Resources Canada and the Canada Revenue Agency.

Canadian Renewable and Conservation Expenses (CRCE) *NEW*

Overview 

Canadian Renewable and Conservation Expenses (CRCE) allow businesses investing in clean energy projects, including solar, to deduct certain development and start-up costs much sooner than normal. The CRCE lets businesses deduct these early expenses immediately or defer them for future years. 

This can reduce taxable income during the planning and development phase of a clean energy project, when costs are high and there aren’t any returns on investment yet. 

The CRCE is different from the ACCA. The ACCA applies to the equipment itself once it’s installed, while CRCE covers early project costs like planning and setup.

How Much Can Your Business Save with Canadian Renewable and Conservation Expenses (CRCE)

There’s no set amount businesses are eligible to receive from the CRCE, as it is dependent on your project costs. The CRCE can fully deduct eligible early project expenses, either in the year they’re incurred, or carried forward in future years.

Eligibility Criteria

• Expenses must be related to the development or start-up of a clean energy or energy conservation project.
• The project must involve clean energy equipment that qualifies under Class 43.1 or Class 43.2.
• Eligible expenses can include planning, engineering, or other early-stage project costs before the equipment is operational.
• Expenses must meet technical requirements set by Natural Resources Canada and the Canada Revenue Agency.

Net Metering Programs

Overview

Net Metering is a program allowing electricity customers to generate their own electricity using solar panels or other renewable energy sources. Electricity customers will receive credits for any excess energy they produce. This program can help offset clean energy costs while supporting renewable energy initiatives. Net metering is currently available in all provinces and territories in Canada, excluding Manitoba (which has another form of net metering called net billing).

How Much Can Your Business Earn Through Net Metering Programs?

For any excess energy generated and exported to the grid, customers will receive credits at the current electricity rate. When you generate more solar power than you use, the extra energy gets credited to your future electricity bills. If you don’t accumulate any excess energy, then you will not receive any credits.