The Clean Tech ITC - Supporting Solar for Businesses
The Canadian government has committed $6.7 billion over five years, starting in 2023, to support investments in clean technologies. This refundable tax credit offers 20% to 30% of the capital cost for eligible clean technology projects installed after March 2023 and before 2035.
Information provided in this article is summarized to provide a basic understanding of the Clean Technology Investment Tax Credit. For full details, visit the CRA website.
Who Can Apply?
To qualify for the Clean Technology ITC, projects must meet the following criteria:
✅ The project sponsor must be a taxable Canadian corporation.
✅ The technology must be used and located in Canada.
✅ Eligible clean technology equipment must be installed after March 2023.
Eligible Clean Technologies
The ITC covers various clean technology investments, including:
Electricity Generation Systems – Solar photovoltaic (PV) and concentrated solar power.
Stationary Electricity Storage Systems – Batteries, thermal energy storage, and other non-fossil fuel-based systems.
How to Qualify for the Full 30% Credit
To receive the full 30% tax credit, applicants must meet specific labor conditions; otherwise, they will only qualify for 20%. Numerous contributors on the job must be notified. It is strongly advised to
Labor Requirements:
Paying Prevailing Wages: All covered workers involved in the installation must be paid wages based on local labor market conditions.
Apprenticeship Hours: Reasonable efforts must be made to ensure Red Seal registered apprentices work at least 10% of the total Red Seal tradesperson hours on the clean technology installation.
Application Details
Capital costs submitted must be adjusted for any other applicable ITCs.
Multiple clean economy ITCs can be claimed for the same project if different types of eligible technologies are included.
The ITC cannot be claimed on property eligible for the CCUS (Carbon Capture, Utilization, and Storage) tax credit.
Cost calculations must be net of any financial assistance received.
How to Apply
Deadline: One year after the tax filing due date for the clean technology installation year.
✔ Steps
Complete the ITC application form and submit it to the CRA.
If applying for the additional 10% (totaling 30%), provide the following supporting documents:
Written confirmation of compliance with prevailing wage and apprenticeship requirements.
Verification that all covered workers met prevailing wage standards.
Documentation confirming efforts to ensure Red Seal apprentices worked at least 10% of the total Red Seal tradesperson hours on the installation.
Phase-Out Timeline
This program is expected to gradually phase out by 2035. The acquisition deadline refers to when the clean energy technology must be operational and in use.
For more details, visit the CRA Clean Tech ITC page or consult a tax professional to maximize your benefits.
