Canada’s new coverage plan mirrors the US Inflation Discount Act (IRA), together with two new enter tax credit (ITCs) concentrating on clear vitality and manufacturing expertise to stay at 30% till 2033. , which is able to drop to fifteen% in 2034 earlier than fully stopping afterwards. 2034.
From pv journal USA
The Canadian federal authorities has outlined a brand new, six-year funding tax credit score that places a 30% tax credit score in place for photo voltaic, wind and vitality storage initiatives deployed till March 2034. Clear Know-how ITC is included as a part of the Canadian authorities’s 2023 Funds Day fiscal priorities on March 28, with Deputy Prime Minister and Finance Minister Chrystia Freeland releasing the federal government’s 2023 federal price range.
The Canadian authorities is prioritizing a clear vitality financial system as one of many three principal pillars of its multi-year price range plan. The federal authorities has a objective of constructing its electrical grid web zero by 2035 by tax incentives for clear vitality initiatives over the following six years.
Canada’s Funds 2023 mirrors the IRA and contains two new ITCs that target clear vitality and manufacturing expertise. In authorities statements this week, it stated the brand new plan permits Canada to stay aggressive with its southern neighbor.
Within the authorities’s 2022 Fall Financial Assertion, it proposed a 30% refundable Clear Applied sciences ITC, which might apply to eligible belongings acquired or out there to be used on or after March 28, 2023. In Funds 2023, expanded to authorities this ITC to make use of in geothermal vitality initiatives, along with photo voltaic, wind and vitality storage. The time period of the ITC has additionally been prolonged from phasing out in 2032, as meant beneath the 2022 proposal, and can stay at 30% till December 2033, dropping to fifteen% in 2034 earlier than being fully phased out after 2034. .
A brand new incentive supplied by the Canadian authorities is a refundable 15% funding tax credit score on capital expenditures made by non-taxable entities. These embody indigenous or tribal communities, municipal utilities and Crown-corporations that make investments in renewable vitality, vitality storage, interprovincial energy transmission and different clear vitality infrastructure initiatives.
The ITC additionally applies to new hydroelectric, wave/tidal initiatives, nuclear (together with small modular reactors), and abated pure gas-fired technology.
The Clear Hydrogen ITC was introduced as a part of the federal government’s 2022 proposals. The brand new specs of the essential design parts of the hydrogen ITC embody a volumetric ITC credit score based mostly on the carbon depth of the undertaking, measured in kilograms of carbon emissions produced per kilogram of hydrogen, and assembly the required working circumstances.
As detailed within the chart above, inexperienced hydrogen produced with the least carbon emissions and produced with practicable expert labor will see an ITC of as much as 40%, whereas grey or blue hydrogen as it’s referred to as utilizing much less carbon restoration can see 5% to 25. % ITC, relying on the work circumstances.
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