At BLDG Electric, we work diligently to understand and keep property owners informed about financial incentives for adding or transitioning to solar power. We have covered How to Qualify for the Canada Greener Homes Grant, How to Get Cash Back from Solar Installations, and How to Make Money from Solar (by selling Carbon Credits). There’s another piece of the incentive puzzle that Edmonton and Northern AB building owners and developers need to know about as we move further into 2024 - tax incentives for solar. Read ahead to learn more about leveraging recent updates to the Government of Canada’s budget to get tax credits on your solar investment.
Tax Credits Available to Edmonton and Northern AB Building Owners Who Transition to Solar Power in 2024 and Beyond
Clean Technology Investment Tax Credit
The 2023 Government of Canada Federal Budget ushered in a new era for renewable investment. As a part of the government’s commitment to achieving net-zero GHG emissions by 2050, they have indicated that a ten-fold expansion of wind and solar energy capacity is mission-critical. Their Clean Technology Investment Tax Credit should help to move this forward. This top tax incentive for solar is a refundable 30% tax credit on the capital cost of solar PV investments made by taxable entities such as businesses that own buildings and property developers. Eligible solar equipment (panels, wiring, supporting structures, etc.) may be written off at 30% per year on a declining balance basis. This credit was initially made available for all project spending from March 28, 2023, and will continue to be available into 2034. After 2034, it will be reduced to below 30%.
A tax credit this substantial will likely encourage property owners to deploy solar projects across Edmonton and Northern Alberta. Assuming that you want to keep pace with (or exceed) the efforts of competitive entities, we encourage you to contact BLDG Electric right away for a consultation for your solar transition.
Clean Electricity Investment Tax Credit
The Government of Canada introduced this incentive during their March 2023 Budget Announcement. The Clean Electricity Investment Tax Credit is a refundable 15% tax credit on the capital costs of renewable energy investments. Unlike the Clean Technology Investment Tax Credit (above), this incentive is only available to non-taxable entities. Non-taxable entities include Indigenous communities, municipally owned utilities, and Crown corporations.
Other Tax Incentives for Solar
The above incentives apply to businesses, building owners, developers, and municipalities. However, business owners who use their homes to conduct some or all of their business can take advantage of Canada Revenue Agency (CRA) law. Under Canada’s Business-Use-of-Home Expenses guideline, you can deduct expenses for the business use of a workspace in your home as long as you meet one of the following conditions:
- The home is your principal place of business.
- You use the space only to earn your business income, and you use it regularly and continuously to meet your clients, customers, or patients.
As long as these conditions are met, you can deduct part of your electricity, which may include the capital cost of solar installation (year one) and future maintenance. Make sure to talk to your accountant about what this allowable tax deduction can be with respect to solar, as we are solar experts, not accountants!
The incentives for transitioning to solar power keep adding up. Take advantage of tax credits and more in 2024 and beyond, starting today by contacting BLDG Electric for a consultation.