For Canadian businesses, solar adoption isn’t just a step towards sustainability; it’s a savvy business decision that will make them save money over the long term. However, the upfront costs are still a barrier for many owners. Fortunately, the Government is supporting the adoption of solar and other forms of clean energy as part of the efforts to make Canada a net-zero emission country by 2050 and is offering financial incentives that make going solar much more attractive from a business perspective. This blog will give you an overview of the solar incentives available in Canada and Alberta for commercial adopters, so you know which option suits your business best.
Federal Incentives
The Clean Technology Investment Tax Credit
This tax credit aims to support the investment in clean energy projects and allows taxable Canadian corporations to claim up to a 30% refundable tax credit for the capital cost of eligible equipment required for energy production through solar and other clean sources, bought and available for use on or after March 28, 2023, and before 2034. For equipment that becomes available for use in 2034, the tax credit would be up to 15%.
The Accelerated Investment Incentive
This incentive provides commercial users who invest in solar or other forms of clean energy to support their activities with an enhanced first-year tax deduction for the equipment subject to the capital cost allowance regulations. This allows them to deduct a more significant portion of the cost of these assets in the year they are put into use rather than spreading the deduction over several years through depreciation. The deduction applies to property purchased after November 20, 2018, and scales down over time.
Canadian Renewable and Conservation Expense (CRCE)
The CRCE covers the intangible costs of clean energy projects, such as feasibility studies and pre-construction development expenses, and allows taxpayers to deduct these expenses for the year incurred entirely.
Alberta Incentives
Emission Reductions Alberta
This initiative allows Alberta’s small and medium businesses to get funding for their clean energy projects. (This program was closed when we wrote this blog, but you can join the waitlist to be among the first ones to know when the program receives funding.)
Clean Energy Improvement Financing Program
This program offers financing up to 100% of clean energy projects and upgrades on commercial property in Edmonton. It offers an up-to-20-year repayment period through your property tax bill and competitive interest rates. The program is planned to reopen for applications in Spring 2024, and you can join its newsletter to stay informed.
An Investment With Long-lasting Benefits
Few investments can give a business instant cash flow relief the way a solar system can, and with the financial incentives we discussed, going solar is an attainable option for businesses of all sizes. When your panels start producing energy, you can invest the money you save in bills in other areas of your business while knowing your activities will be powered by a reliable energy source.
We would love to hear from you if you have any questions or would like more information. Contact us for a free consultation to ask us all your solar questions.