Canada’s Solar Tax Credit for Businesses
Save Up to 30%
Businesses across Canada can now take advantage of a powerful incentive: the Clean Technology Investment Tax Credit (ITC), offering up to 30% back on the cost of a solar panel installation.
Designed to accelerate Canada’s shift to a low-carbon economy, this refundable tax credit works much like a rebate — putting money back into your business while helping you invest in clean, renewable energy.
Who Qualifies for the ITC
To be eligible, your project must meet these key requirements:
Taxable Canadian Corporation — Only Canadian corporations can claim the credit. Individuals, non-profits, and condo corporations are excluded.
Eligible Technology — Your investment must be in qualifying clean technologies such as solar PV systems or energy storage.
Installation Timeline — Equipment must be purchased and operational between March 28, 2023, and December 31, 2034. The credit can be applied retroactively for projects in service as early as March 28, 2023.
Labor Requirements — To claim the full 30% rate, you must meet prevailing wage and apprenticeship requirements. Missing these requirements reduces the rate by 10%.
Location — The system must be installed in Canada and generate power for a Canadian business property.
How to Claim the Tax Credit
To secure your refund, you’ll need to follow the CRA’s process:
1. Keep Detailed Records — Maintain invoices, receipts, and proof of payment.
2. File Through Your Corporate Tax Return — The ITC is claimed directly on your annual return.
3. Attach Supporting Documentation — The CRA will require proof of eligibility.
4. Ensure Labor Compliance — If aiming for the full 30%, confirm wage and apprenticeship requirements are met. This may involve working with a compliance consultant.
Our team can connect you with specialists to help you meet all criteria.
Why It Matters for Your Business
The ITC is refundable, meaning if your credit exceeds your corporate tax liability, the balance is refunded directly — by cheque or direct deposit. This makes the program valuable for businesses of all sizes, not just those with large tax bills.
If your solar project costs $500,000, you could receive $150,000 back through the ITC.
Pair It With Accelerated Depreciation
Alongside the ITC, businesses can use Accelerated Capital Cost Allowance (CCA) to further improve project returns.
CCA Class 43.1 allows solar equipment to be depreciated at 30% annually.
Projects installed between November 20, 2018, and 2028 qualify for an enhanced first-year deduction:
75% in 2025
55% in 2026 or 2027
By claiming the ITC and accelerated depreciation, you can significantly reduce the payback period of your solar investment.
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