What the Clean Technology (CT) Investment Tax Credit can fund
The Clean Technology Investment Tax Credit (CT ITC) is a federal, refundable investment tax credit designed to accelerate capital investment in eligible clean technology property across Canada. For organizations planning solar, wind, hydro, storage, heat pump, geothermal, non-road zero-emission vehicle, concentrated solar, or small modular reactor projects, understanding exactly what the CT ITC can fund is essential.
This comprehensive coverage guide explains eligible property, ineligible costs, rates through 2034, documentation standards, real-world examples, and how the credit is ultimately claimed. Use it to scope your project, align procurement to the “available-for-use” timeline, and structure your budget to maximize the refundable credit.
As of December 2025, the CT ITC provides up to 30% of the capital cost for eligible property that becomes available for use through 2033, and up to 15% for eligible property available for use in 2034. The program is administered by the Canada Revenue Agency (CRA), with technical guidance on eligible property from Natural Resources Canada (NRCan).
Program Funding Overview
The Clean Technology Investment Tax Credit is a refundable tax credit for capital invested in new, eligible clean technology property that is situated in and intended for use exclusively in Canada. Key points:
Time window:
Available for property that becomes available for use from March 28, 2023, to December 31, 2034.
Credit rate is up to 30% for property available for use through December 31, 2033.
Credit rate is up to 15% for property available for use between January 1 and December 31, 2034.
Not available after 2034.
Administration and guidance:
CRA administers the refundable tax credit via corporate and trust tax returns.
NRCan provides engineering and scientific guidance on whether equipment falls within CT property categories.
Claimant types:
Taxable Canadian corporations, including those in partnerships.
Mutual fund trusts that are real estate investment trusts (MFT‑REITs), including those in partnerships.
Canada-use and “new” requirements:
Property must be new (not previously used or acquired for use/lease) at the time of acquisition by the claimant.
Property must be situated in and intended for exclusive use in Canada.
Project vs property:
You can only claim one clean economy ITC on the same property.
You may claim multiple clean economy ITCs within a single project if the project includes different ITC-eligible property types under separate clean economy ITCs.
The CT ITC can be combined with the Atlantic investment tax credit where applicable.
Funding Amounts & Rates
Your CT ITC rate depends on the “available-for-use” date and whether you elect to meet clean economy labour requirements:
Available for use from March 28, 2023 to December 31, 2033:
If you elect to meet labour requirements: up to 30% of the capital cost.
If you do not elect: up to 20% (a 10‑percentage‑point reduction).
Available for use from January 1, 2034 to December 31, 2034:
If you elect to meet labour requirements: up to 15%.
If you do not elect: up to 5% (a 10‑percentage‑point reduction).
Labour requirements apply to “covered workers” for work performed on or after November 28, 2023. If you elect to meet prevailing wage and apprenticeship requirements but fail to comply, additional tax may apply. If you do not elect at all, your rate is reduced by 10 percentage points.
Practical notes on amounts:
The credit base is the capital cost of eligible clean technology property, determined under income tax rules.
The timing hinge is the date the property becomes “available for use” (commissioning/ready for intended use), not the purchase order date.
The CT ITC is refundable, meaning it can reduce tax payable and potentially yield a refund after assessment.
Eligible Expenses (Eligible Property)
The CT ITC funds specified categories of clean technology property. The following must be new, situated in Canada, and intended for exclusive use in Canada.
1) Solar electricity generation equipment
Photovoltaic modules and panels
Inverters, combiner boxes, monitoring and control systems
Racking, trackers, and mounting hardware integral to generation
Balance-of-plant components necessary for generation and interconnection
Solar carport generation equipment (panels, inverters, structural mounting for generation)
2) Wind electricity generation equipment
Turbines, blades, nacelles, towers
Controllers, converters, transformers integral to generation
Balance-of-plant directly tied to wind generation
3) Water/hydro electricity generation equipment
Turbines, generators, runners
Control systems and integral electrical equipment
Balance-of-plant directly tied to hydroelectric generation
4) Stationary electricity storage equipment that does not use fossil fuel in operation
Battery energy storage systems (BESS) including battery packs, battery management systems, inverters, and associated power conditioning
Pumped hydroelectric storage components
Control, monitoring, and safety systems integral to stationary storage
Note: Storage equipment that relies on fossil fuels to operate is not eligible
5) Active solar heating equipment, air-source heat pumps, and ground-source heat pumps
Active solar thermal collectors, circulating pumps, heat exchangers, controls
Air-source heat pumps (commercial or industrial), including variable-refrigerant flow components where integral to the system
Ground-source (geothermal) heat pumps including ground loops, headers, and associated mechanical equipment
6) Non-road zero-emission vehicles (ZEVs) and related charging/refuelling equipment used primarily for such vehicles
Electric or hydrogen non-road mobile equipment used in mining, construction, logistics yards, ports, or industrial sites (e.g., electric haul trucks, loaders, forklifts, yard tractors)
High-capacity chargers or hydrogen refuelling equipment used primarily for non-road ZEVs
Charging/refuelling infrastructure integral to the non-road ZEV application
7) Geothermal energy equipment used exclusively to generate electrical energy or heat energy (or both) solely from geothermal energy
Geothermal electricity generation components not tied to fossil extraction systems
Geothermal heat-only systems that meet the CT category and are exclusively geothermal
Exclusion: equipment that is part of a system extracting fossil fuels for sale does not qualify
8) Concentrated solar energy equipment
Mirrors, heliostats, receivers, tracking and control systems
Thermal transfer and conversion components integral to the CSP system
9) Small modular nuclear reactors (SMRs)
Eligible SMR reactor modules and integral systems aligned with CT ITC guidance
Balance-of-plant equipment that meets category criteria (subject to technical scope)
Leasing notes for eligible property:
If you lease CT property to another person or partnership, both of the following must be met:
The lessee must be a taxable Canadian corporation or an MFT‑REIT, or a partnership all of whose members are taxable Canadian corporations.
The lessor must be in the ordinary course of a Canadian business whose principal business is any combination of selling/servicing that type of property, leasing property, lending money, or purchasing specified financial obligations related to merchandise/services.
If leasing conditions are not met, the property may not qualify for the CT ITC.
Additional incentives:
Property that also falls under Class 43.1 or 43.2 may benefit from accelerated capital cost allowance (ACCA) in addition to the CT ITC. This is separate from, and can complement, the CT ITC.
Ineligible Expenses
The CT ITC focuses on specific clean technology capital property. The following are generally not eligible:
Previously used equipment or equipment acquired for use/lease before acquisition by the claimant
Property not situated in Canada or not intended for exclusive use in Canada
On-road vehicles and their charging infrastructure (the CT ITC’s vehicle coverage is for non-road ZEVs and their related charging/refuelling equipment used primarily for such vehicles)
Fossil-fuel-dependent equipment or storage solutions that use fossil fuels in operation
Geothermal equipment that is part of a system that extracts fossil fuels for sale
General construction costs unrelated to eligible property (e.g., standard building shells that are not part of an eligible technology category)
Land, routine furnishings, and non-integral building components
Software and IT systems not integral to the eligible generation/storage/thermal system
Training, general maintenance, and operating costs
Permits, legal, and financing costs not capitalized to the eligible property
Property on which another clean economy ITC is claimed (no double-claim on the same property)
Property leased to non-qualifying entities or under structures that do not meet the CT leasing conditions
Important: Eligibility is fact-specific. Technical specifications and system integration determine whether equipment is integral to the qualifying category.
Expense Documentation Requirements
Strong documentation supports eligibility, the capital cost base, and the “available-for-use” date:
Technical documentation
Manufacturer datasheets, engineering specs, and one-line diagrams
NRCan-compatible technical descriptions showing category alignment
Commissioning reports and “available-for-use” evidence
Commercial documentation
Executed purchase contracts and invoices
Proof the equipment is new (not previously used)
Shipping, delivery, and installation records tied to the asset
Canada-use proof
Site address in Canada and evidence of exclusive use in Canada
Asset registers, GPS/telematics (for non-road ZEVs) showing primary use on Canadian sites
Financial documentation
Capitalization schedules showing the capital cost basis by asset
Allocation memos where systems include mixed eligible and ineligible components
For partnerships: T5013 slips (boxes for CT ITC, labour requirement addition, and recapture) provided to members
Labour requirements evidence (if electing)
Prevailing wage compliance documentation
Apprenticeship ratios and hours for covered work performed on/after November 28, 2023
Maintain records to satisfy CRA reviews and potential audits. Retain all documents for the standard retention periods applicable to corporate/trust returns.
Examples of Funded Projects
Example 1: Commercial real estate solar + storage (REIT)
Project: A Canadian REIT deploys 4 MW of rooftop and carport solar with a 6 MWh BESS across multiple properties in Ontario and Québec.
Eligible property:
Solar PV modules, inverters, racking/trackers, monitoring systems
BESS packs, inverters, battery management systems, protection and control gear
Credit estimation:
If available for use in 2026 and labour requirements are elected: up to 30% of the capital cost of eligible equipment.
If non-election: up to 20%.
Additional incentives:
Where assets fall into Class 43.2, accelerated CCA may apply in addition to the CT ITC.
Example 2: Mining fleet electrification (non-road ZEVs)
Project: A mining operator in Northern Ontario acquires electric haul trucks, loaders, and installs high-capacity chargers at the pit and processing yard.
Eligible property:
Non-road zero-emission vehicles and fast charging equipment used primarily for those vehicles
Credit estimation:
If available for use by 2033 with labour election: up to 30% on eligible capital costs.
If available for use in 2034 with labour election: up to 15%.
Example 3: Industrial heat decarbonization with heat pumps
Project: A manufacturer in Alberta installs multiple high-temperature air-source heat pumps and an active solar thermal array to displace natural gas heat in process applications.
Eligible property:
Air-source heat pumps integral to process heat
Active solar heating collectors, heat exchangers, and controls
Credit estimation:
Up to 30% through 2033 (with labour election), recognizing the credit applies to eligible capital property only.
Example 4: Geothermal district heat (non-fossil)
Project: A district energy provider in Atlantic Canada deploys a geothermal loop and heat-only system not linked to any fossil extraction.
Eligible property:
Geothermal heat equipment, pumps, loops, and control systems
Stacking:
May combine CT ITC with the Atlantic investment tax credit, subject to rules.
Example 5: Small modular reactor (SMR) equipment
Project: A private corporation invests in eligible SMR modules and integral systems for a future generation site.
Eligible property:
SMR equipment within the CT ITC scope, including integral control and safety systems
Documentation:
Robust technical files demonstrating category fit and available-for-use timing.
These examples are illustrative. Actual eligibility and amounts depend on detailed engineering scope, asset lists, and tax treatment.
Funding Disbursement & Claiming Process
The CT ITC is claimed through tax returns; there is no separate grant portal. High-level mechanics:
Corporations
Complete Schedule 75 (Clean Technology Investment Tax Credit) with calculation details.
Report the ITC on Schedule 31 (Investment Tax Credit) at line 155, and ensure the amount flows to line 780 of the T2 return.
Include any CT ITC amounts allocated from partnerships (typically reported on T5013 slips).
Partnerships
Complete Schedule 75 (partnership version) with calculation details.
Provide each member a T5013 slip showing the CT ITC amount, any labour requirement addition to tax, and any recapture.
Trusts (MFT‑REITs only)
Complete Form T1098 (Clean Technology Investment Tax Credit).
Claim on the T3 return (field 881/line 57), including partnership allocations if applicable.
Filing due dates align with the due date of the underlying T2 or T3 return, with limited late-filing relief potentially available within one year of the due date. The CT ITC is refundable; after assessment, it may reduce taxes payable and can generate a refund.
Stacking Rules
No double-claim on the same property:
You cannot claim more than one clean economy ITC on the same piece of property (e.g., you cannot claim both the CT ITC and the CCUS ITC on the identical asset).
Multiple ITCs in one project:
You may claim different clean economy ITCs within a single project if each claim relates to a different category of eligible property.
Atlantic investment tax credit:
The CT ITC can be combined with the Atlantic investment tax credit, subject to program rules.
Depreciation:
Where eligible property falls under Class 43.1 or 43.2, consider accelerated CCA alongside the CT ITC to optimize cash flow.
Always disclose other government assistance according to tax rules and maintain clear records to avoid overfunding issues.
Real-World Budgeting Tips
Plan for the 2033/2034 rate shift
Aim to commission and reach “available for use” by December 31, 2033 to access up to 30% with labour election. Assets available for use in 2034 may be eligible for up to 15%.
Elect into labour requirements early
Build prevailing wage and apprenticeship compliance into contracts and site procedures to avoid the 10‑point rate reduction and potential additions to tax for non-compliance.
Align scope to eligible categories
Separate budgets for eligible equipment (e.g., PV modules, inverters, BESS components, non-road ZEVs) and non-eligible construction or soft costs to avoid dilution of the credit base.
Document “available-for-use”
Commissioning certificates, energization logs, or substantial completion documentation will help substantiate the timing of eligibility and the applicable rate.
Structure leasing to meet CT conditions
If using a lease model, ensure the lessee and lessor tests are met; otherwise, the property may not qualify.
Consider recapture exposure
A recapture may be required if, within 10 calendar years of acquisition, the property is disposed of, exported from Canada, or converted to a non-clean technology use. Track events rigorously.
Integrate with Class 43.1/43.2
Accelerated CCA can complement the refundable CT ITC. Model both to optimize net present value.
Keep partnership flows clean
For joint ventures and partnerships, align accounting to produce accurate T5013 slips showing CT ITC, any labour requirement addition, and potential recapture.
Conclusion
The Clean Technology Investment Tax Credit funds a defined set of clean technology capital assets—from solar, wind, hydro, and storage to heat pumps, geothermal, non-road ZEVs and their chargers, concentrated solar, and SMRs—when those assets are new, situated in Canada, and intended for exclusive use in Canada. With rates up to 30% through 2033 (15% in 2034) and a 10‑point reduction if you do not elect labour requirements, precise scoping and documentation are essential.
Use this guide to map eligible property, prepare evidence of “available-for-use,” and structure budgets that separate eligible from non-eligible costs. Confirm technical alignment with NRCan guidance, follow CRA claiming requirements, and plan commissioning timelines to maximize the refundable CT ITC within the 2023–2034 window.
