Easun Power-Solar Power Incentives and Tax Breaks for Consumers in Canada 2023
Installing a solar power system can be a daunting financial prospect, especially if it’s your first time using renewable energy. Incorporating a solar PV system into your home can be a significant investment, but it can offer substantial savings on your electricity bills in the long run. Not to mention being much more environmentally friendly.
Federal, provincial, and municipal governments throughout Canada have launched incentives to offset the upfront costs of investing in solar. These solar power incentives and tax breaks for consumers in Canada are just one way that renewable energy can help you save. Learn how they benefit you.
What Are the Federal Solar Power Tax Breaks?
Federal solar power tax breaks are credits that Canadian residents can claim on federal income taxes for a set percentage of the cost of the entire PV system. Essentially, tax credits help you reduce the amount of tax you owe or increase your tax refund.
Currently, there are over 78 clean energy incentive programs that Canada has to offer. They differ depending on the source of renewable energy, the province you live in, and whether you’re a business owner or homeowner.
The Canada Greener Home Grant lets homeowners receive up to $5,000 to make their homes more energy-efficient. It means you could earn tax breaks for improvements such as insulation, battery energy storage systems, new windows, and installing PV panels. In addition, solar power systems get a generous rebate of $1.00/W for up to $5,000.
Additionally, the federal incentive provides homeowners up to $40,000 in interest-free loans to help buy environmentally friendly retrofits such as higher quality sealing for windows and doors and solar panels. The program lets homeowners receive a free energy audit to determine which upgrades will translate into the maximum savings.
Canada also offers a commercial solar tax incentive, which allows businesses to write off the entire asset value in year one of the purchase.
Which provinces and regions enjoy tax reduction and exemption policies?
The renewable energy industry across Canada has taken huge strides within the last few years. Residents in Ontario, New Brunswick, Manitoba and Saskatchewan are eligible for the Climate Action Incentive Fund. This fund is a rebate for small and medium-sized businesses investing in green technology. It offers rebates of up to 25% of the project cost, which ranges from $20,000 to $250,000.
Besides these business incentives, several significant incentives and rebates are available for specific provinces and territories.
Are You Eligible for the Federal Solar Power Tax Breaks?
The Canada Greener Home Grant is available to homeowners who own the solar energy system. This tax break is valid for first or second residential properties but not rental properties. You may be eligible for Canada’s tax credit if you have a solar-powered system and paid for it via a secured loan or out-of-pocket. If you have the solar system installed in your home but don’t own the equipment, you won’t be eligible for the tax break.
British Columbia
While British Columbia doesn’t offer a rebate at the provincial level, it’s the only province that provides a PST exemption for solar panels. However, similar to other provinces like Alberta, multiple regional solar rebates and incentives fill the place of a centralized program.
For example, the Regional District of Nanaimo offers homeowners a rebate of $250 to $400 for any Solar PV, geothermal, thermal or wind system. However, the program is on a first-come-first-serve basis. Applicants must provide documentation to prove that the address falls within the region.
The Alternative Energy Sources PST Exemption covers any equipment needed for installation, such as inverters, controllers and wiring.
In the District of Summerland, the Distributed Generation Program gives homeowners with small (30kW) or less inverter-based solar generation systems access to net metering. Residents can offset a portion or all their electricity costs by providing solar electricity to the grid.
Alberta
Alberta offers several excellent incentives for homeowners looking to install solar PV. Additionally, the western province receives more sunshine than most other places in Canada. Thanks to the ideal sunlight conditions and a slew of regional benefits, Alberta is one of the best places to switch to solar energy.
The City of Edmonton incentivizes its residents with its Edmonton Solar Rebate program. This rebate provides installation for $0.40/W of up to $4,000 with a maximum of 40% of eligible system costs or up to $4,000. Qualified expenses for the rebate program include PV equipment such as solar panels, inverters, cabling, and racking. Ineligible expenses include lease payments, batteries, and administration costs.
Saskatchewan is the sunniest province in Canada and is an excellent location for solar power generation. The primary provincial incentive is their net metering program. It allows residents to receive credit for generating excess renewable energy and sending it off to the grid.
Residents, businesses, and farms can apply for solar systems with up to 100kW capacity. Any excess energy created is sent to the grid and converted to credits at 7.5¢/kWh.
The municipality of Saskatchewan also encourages farms to switch to renewable energy sources.
Yukon
Yukon Territory aims to help residents to switch to solar with several programs. The Good Energy Yukon program is a solar incentive to reduce the expenses of installing renewable energy systems for residential property.
This program includes solar photovoltaic panels, hydro, biomass, wind, or geothermal energy systems. It provides an $.80 per watt rebate for up to $5,000 per system per year. Solar systems have a capacity limit of 50kW or smaller than the amount your local electrical utility allows.
Yukon’s micro-generation program works similarly to net metering in that it acts as an alternative energy source or supplement power from the grid. For small-scale electricity generation between 5kW and 50kW, residents can receive annual reimbursement for any surplus energy generation exported to the grid.
Montreal
Unfortunately, Montreal doesn’t have any municipal solar tax breaks or incentives. Quebec used to offer the Renovert Tax Credit, but that expired. Businesses can now utilize the Federal Tax Provision for Clean Energy Equipment to cover their solar power system.
There are over ten energy incentive programs in Quebec, and many homeowners choose to take advantage of these incentives as they switch to solar.
Vancouver
Similar to Montreal, Vancouver doesn’t have specific solar tax incentives and rebates at this time of writing. However, you can still leverage the several energy tax incentives at the provincial level. As mentioned previously, British Columbia offers tax exemptions for solar panels.
The Summary
Canadian consumers combining the various solar tax incentives and rebates at the federal, provincial and municipal levels can save money on installation or reduce the taxes owed.
While installing a solar-powered system can sometimes seem like a significant upfront cost, these programs will drastically reduce the expenses over the long term. Not to mention, you’ll significantly reduce your carbon footprint and help stop global warming.
If you’re ready to begin using solar, look into Easun Power