Could Clean Technology Tax Credits Help Improve Renewable Energy ROI?

For many businesses and organizations, the upfront cost of renewable energy equipment is one of the biggest factors when deciding whether to move forward with a project. While long-term savings, reduced fuel use, and energy independence are important benefits, the initial investment can still be a major consideration.

Canada’s Clean Technology Investment Tax Credit may help strengthen the financial case for certain renewable energy projects. The credit is designed to support capital investment in new clean technology property in Canada, including equipment used to generate electricity from wind energy. For eligible property acquired and available for use from March 28, 2023, to December 31, 2033, the tax credit rate may be up to 30% of the capital cost.

This can be important for businesses considering microgeneration wind energy. A tax credit can help lower the net cost of a project, which may improve the return on investment and shorten the effective payback period. For farms, rural businesses, remote facilities, and other commercial properties, this could make renewable energy systems more financially accessible.

It is important to understand that eligibility depends on specific requirements. The Clean Technology ITC is generally available to taxable Canadian corporations and certain eligible trusts. The equipment must also meet qualification rules, including being new clean technology property located and intended for use in Canada. Businesses should speak with a qualified accountant or tax professional to confirm whether their project qualifies.

Accelerated capital cost allowance may also be worth exploring for some clean technology property, especially where equipment falls under Class 43.1 or Class 43.2. Class 43.1 generally allows eligible equipment to be depreciated at 30%, while Class 43.2 can allow a 50% rate for certain qualifying clean energy equipment. This could provide another way for businesses to improve the cost profile of a renewable energy investment.

For Borrum Energy Solutions, these incentives matter because they can help make microgeneration wind energy more practical for commercial and rural applications. The Anorra wind turbines are designed to produce electricity close to where it is used, helping reduce reliance on diesel, propane, or outside electricity sources as well as the electrical grid

Clean technology incentives do not replace the need for proper system planning, wind assessment, and financial review. However, they can be an important part of evaluating the full project opportunity. For businesses considering renewable energy, understanding available tax credits and depreciation options can help make the path to cleaner local power more achievable.

Learn more through the Government of Canada’s Clean Technology Investment Tax Credit page: Clean Technology Investment Tax Credit (ITC)