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.
The process involves receiving an energy audit to evaluate your current energy usage and identify areas of improvement. You can inform the auditor that you plan on installing a solar PV system. Besides the $5,000 grant, the program awards $600 to cover the energy audit costs.
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.
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.
Provincial and Territorial Solar Power Incentives & Rebates
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.
Ontario
Currently, Ontario has no rebate or financing program for solar installations. However, they do have targeted incentives available to homeowners.
The First Nations Conservation Program provides free efficiency upgrades for on-reserve energy customers.
The High-Rise Retrofit Improvement Support Program focuses on helping apartment building owners with three stories or more limit emissions by upgrading to sustainable infrastructure.
Ontario’s Affordability Fund provides homeowners across the Ontario province with free energy upgrades if they qualify. The government has funded a total of $100 million to help electricity customers who aren’t eligible for low-income conservation programs. Ontarians may be able to access PV panel upgrades, insulation, and weatherstripping, depending on the amount of savings they qualify for.
Ontario also offers net metering up to 500kW or less, so you can send excess solar electricity to the grid for credit toward your energy costs. Homeowners must use credits within a year, after which the remaining credits will reset to zero.
Quebec
Currently, there aren’t any direct financial rebates for solar panels in Quebec. However, it’s still an excellent place to convert to renewable energy.
Quebec’s net metering system is among the best options in the country. It allows homeowners to export excess power generated to the grid and deduct the excess electricity sent to the grid from their electricity bill.
Let’s say you’ve consumed 1,000 kWh and sent 200 kWh last month using an EcoFlow DELTA Pro solar generator. You’d only have to pay for 800 kWh worth of electricity.
Also, Quebec offers financial assistance to homeowners who participate in the Heating with Green Power program to replace fossil-fueled home systems, including solar energy. It lets you improve your home’s energy efficiency while limiting greenhouse gas emissions.
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 Alberta Micro-Generation Regulation enables net-metering of PV systems of up to 5 MW or 5,000 kW. All excess energy generated will be sent to the grid and credited back to you.
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.
Through the Banff Solar Incentive, Banff’s residents and commercial property owners can receive rebates of $.75/watt for solar systems between 2kW and 20kW.
The Municipal Climate Change Action Centre offers community organizations and municipalities funding up to 25% of a maximum of $300,000 for solar projects. These projects must be greater than 2kW and less than 1MW.
Saskatchewan
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. SaskPower offers a solar or wind-powered pump grant of 50% of costs above $500, which covers a maximum of $500. The funding goes towards purchasing and installing the solar system for farm livestock watering facilities.
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.
Northwest Territories
In the Northwest Territories of Canada, the Government of NWT and the Arctic Energy Alliance provide solar incentives for homes, first nations communities, and businesses. There are several rebate programs for each group.
Their rebate program offers a rebate for up to half of the entire solar system’s cost of up to $20,000. Businesses can receive funding for up to half the cost of up to $50,000. And indigenous communities and non-profit organizations may receive funding of half the cost for up to $50,000.
Municipal Solar Power Incentives & Rebates
In addition to the provincial laws, the municipals in Canada also offer solar incentives and rebates to help you switch to renewable energy.
Toronto
With energy incentives for homeowners, such as low-interest loans and rebates, there’s never been a better opportunity to upgrade your home’s energy efficiency. There are several programs that the City of Toronto offers to encourage the installation of a solar PV system.
In particular, the Home Energy Loan Program offers $1,000 when qualifying participants install a solar PV system. The loan program covers the cost of your energy improvements with rates starting as low as 2% interest. This program states a range of home improvements like PV panels, insulation, windows, doors and energy-efficient furnaces.
Combined with the Canada Greener Homes Grant, you’d receive up to $6,000 for your PV system ($5000 from the grant and $1,000 from the loan).
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.
Conclusion
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 home ecosystem solar solutions.