Business in Canada? Whopper 30% Tax Credit with Solar

by Dale Rowe

Your Simple Guide to Canada’s Solar Tax Credit
Save up to 30 % on your business solar investment—no jargon, just clear steps and definitions.

Whether you run a corporation, a partnership or a real-estate investment trust, this post will walk you through everything you need to know to claim Canada’s Clean Technology Investment Tax Credit (CT ITC)—also known as the Canadian solar tax credit. You’ll learn how the 30 % vs 15 % rates work, what equipment qualifies, and exactly which forms to file.

1. What Is the Clean Technology Investment Tax Credit?

  • The CT ITC is a refundable federal credit that returns a portion of what you spend on new solar equipment when it’s first commissioned in Canada.
  • 30 % credit if your system goes live by December 31 2033 (the main CT ITC window).
  • 15 % credit if your system is first used anytime in 2034 (the final “phase-out” year).
  • 0 % credit for systems first used on or after January 1 2035.

Refundable means that if your CT ITC exceeds the tax you owe, CRA will pay you the remainder.

2. Who Can Claim the Canadian Solar Tax Credit?
Only these entities can directly claim the CT ITC:

  1. Taxable Canadian corporations (including corporate partners in a partnership)
  2. Mutual fund trusts that are REITs (real-estate investment trusts)

Note: Partnerships themselves don’t keep the credit—they pass it through to eligible corporate or REIT partners via a T5013 statement.

3. Which Solar Equipment Qualifies for the Business Solar Tax Credit?
To be eligible, your solar gear must be:

  • Brand-new (never used, owned or leased before)
  • Installed in Canada
  • Exclusively for generating or storing solar energy: photovoltaic panels, inverters, racking, batteries, heat pumps (air or ground source), etc.

Leasing solar panels?
You can still claim the solar tax credit if you lease equipment to a Canadian corporation, REIT, or a partnership made up entirely of Canadian corporations—provided leasing is part of your normal business (e.g., equipment rental or financing).

4. Elect-In vs. No-Elect: How to Keep the Full 30 %
To earn the full 30 % (or 15 % in 2034), you must elect in to pay “prevailing wages” and meet apprenticeship rules on any installation or construction work. If you don’t, your credit is automatically cut by 10 points:

Commission Date

Elect-In Credit

No-Elect Credit

By Dec 31 2033 (30 % window)

30 %

20 %

Jan 1 2034 – Dec 31 2034 (15 % window)

15 %

5 %
  • Prevailing wage: the typical local wage for each trade (e.g., Red Seal electrician rate).
  • Apprenticeship rule: a minimum share of total on-site hours must be performed by registered apprentices (requirements vary by province).

5. How to File Your Corporation Solar Tax Credit Claim

  1. Schedule 31 (T2SCH31): enter your CT ITC amount on Line 155.
  2. Schedule 75 (T2SCH75): attach the PDF form showing your cost and credit calculation.
  3. T2 Return: roll the CT ITC total into Line 780.
  4. Deadline: same as your corporate tax-return due date (CRA may accept up to 1 year late).

6. How to Claim as a Partnership or Trust

  • Partnerships: issue each corporate/REIT partner a T5013 Statement (or written notice) allocating their share of the CT ITC. Each partner then claims on their own T2 Schedule 31.
  • REIT Trusts: report your CT ITC on Line 51 (Field 88) of the T3 Trust Return, and attach your calculation details (PDF form until software updates).

Deadlines for partnerships and trusts match their T2/T3 return due dates (CRA may accept up to 1 year late).

7. Recapture, CRA Review & the 2035 Sunset

  • Recapture: if you export, sell or convert the solar equipment to non-qualifying use within 10 years, you may have to repay part of your credit. Report any recapture event by your return’s due date.
  • CRA Review: CRA can audit your claim—keep all invoices, lease agreements, payroll registers and apprenticeship logs on hand.
  • After December 31 2034, the CT ITC ends—no credits are available for systems first used in 2035 or later.

8. Bonus Savings: Accelerated Depreciation (CCA)
Most solar equipment also qualifies for Class 43.1/43.2 accelerated capital cost allowance: you can write off 100 % (or 50 % on new additions after 2023) in year 1. This stacks with the CT ITC to supercharge your cash flow.

9. Key Terms Glossary

  • CT ITC: Clean Technology Investment Tax Credit (aka the Canadian solar tax credit).
  • Refundable credit: CRA pays you if the credit exceeds your tax owing.
  • First use date: when your system is commissioned and producing power.
  • Elect-in: file to meet wage/apprentice rules and earn the full rate.
  • No-elect: skip the election or rules, receive a 10 point lower rate.

10. Getting Started: Next Steps to Maximize Your Solar Tax Savings

  1. Consult your accountant or tax advisor about project timing and the labour-election strategy.
  2. Gather documentation: supplier invoices, lease contracts (if leasing), payroll records, provincial prevailing-wage schedules, and apprenticeship hour logs.
  3. Prepare your forms: T2 Schedules 31/75 for corporations; T5013 + T2SCH31 for partnerships; T3 Field 88 for trusts.
  4. Commission your system before December 31 2033 to lock in a 30 % credit—or anytime in 2034 for a 15 % credit.

Solar isn’t just clean energy—it’s a powerful tax-saving tool. Get your panels up, claim your Canadian solar tax credit, and watch savings flow back into your bottom line.

 


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