Save energy and money with Canada's investment tax credit (ITC) on Clean Electricity and Clean Technology. Introduced in Canada's Fall 2022 Financial Statement and 2023 Budget, these tax credits refund a certain percentage of the capital cost of investments that help Canada with its commitment to achieve a net-zero electricity sector by 2035.
Clean Technology
Originally announced in the 2022 Fall Economic Statement and updated in the 2023 Budget to expand its scope, the Clean Technology ITC is a refundable tax credit for up to 30% of the capital cost of the following projects:
Electricity generation systems, including solar photovoltaic, small modular nuclear reactors, concentrated solar, wind and water (small hydro, run-of-river, wave and tidal);
Stationary electricity storage systems that do not use fossil fuels in their operation, including, but not limited to, batteries, flywheels, supercapacitors, magnetic energy storage, compressed air energy storage, pumped hydroelectric energy storage, gravity energy storage and thermal energy storage;
Low-carbon heat equipment, including active solar heating, air-source heat pumps and ground-source heat pumps; and
Industrial zero-emission vehicles and related charging or refueling equipment, such as hydrogen or electric heavy duty equipment used in mining or construction.
Geothermal energy systems that are eligible for capital cost allowance Classes 43.1 and 43.2. Projects that will co-produce oil, gas, or other fossil fuels would not be eligible for the Clean Technology ITC.
*For the full 30% tax credit, certain labour conditions must be followed including paying paying prevailing wages based on local labour market conditions. The Department of Finance will consult with a broad group of stakeholders, but especially with unions, on how best apply labour conditions. 20% tax credit otherwise.
With an expected total cost of $6.9 billion over its lifetime from 2023-2034 this tax credit aims to support Canadian businesses and workers in adopting clean technology.
Clean Electricity
Announced in the 2023 Budget, the Clean Electricity Tax Credit provides a refundable 15% tax credit for investments in:
Non-emitting electricity generation systems: wind, concentrated solar, solar photovoltaic, hydro (including large-scale), wave, tidal, nuclear (including large-scale and small modular reactors);
Abated natural gas-fired electricity generation (which would be subject to an emissions intensity threshold compatible with a net-zero grid by 2035);
Stationary electricity storage systems that do not use fossil fuels in operation, such as batteries, pumped hydroelectric storage, and compressed air storage; and,
Equipment for the transmission of electricity between provinces and territories.
This tax credit can be claimed on any applicable projects that began construction after the day of budget 2023, and also have similar labour requirements as the Clean Technology ITC in order to receive the full 15% credit. This ITC is expected to cost $6.3 billion over four years starting in 2024-25, and an additional $19.4 billion from 2028 to 2035.
How We Can Help
Mann Energy Solutions (MES) is a professional consulting engineering company that specializes in electrical and energy solutions, including engineering and implementation. Our experienced engineers can help work with your building’s unique profile to identify spare electrical capacity, energy saving opportunities, and design the best system for you. We have extensive experience with energy retrofits that make the most of your existing electrical capacity by optimizing building processes and equipment such as lighting, mechanical systems, electrical loads, and building envelope to reduce your energy use. Our firm has hundreds of installed electrical and power projects and we have been in business since 1983. Some of our services include:
Free site walk-through by our experienced engineers and technicians to provide an initial site assessment
Engineering feasibility studies
Incentive study and application
Engineering, Procurement and Construction (EPC) for a turnkey project
Coordination with utilities for distribution system upgrades, service size expansions, and microgeneration through solar PV , energy storage and cogeneration
Energy storage
For more information or a complimentary assessment contact us through the main site, info@mannenergysolutions.com, or call (905) 597-5855.