Canada’s new coverage plan mirrors the US Inflation Discount Act (IRA), together with two new enter tax credit (ITCs) concentrating on clear power and manufacturing expertise to stay at 30% till 2033. , which is able to drop to fifteen% in 2034 earlier than all of it ends afterwards. 2034.
From pv journal USA
Canada’s 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 power storage tasks deployed till March 2034. Clear Know-how ITC is included as a part of the Canadian authorities’s 2023 Price range Day fiscal priorities on March 28, with Deputy Prime Minister and Finance Minister Chrystia Freeland releasing the federal government’s 2023 federal funds.
The Canadian authorities is prioritizing a clear power financial system as one of many three essential pillars of its multi-year funds plan. The federal authorities has a aim of creating its electrical grid internet zero by 2035 via tax incentives for clear power tasks over the subsequent six years.
Canada’s Price range 2023 mirrors the IRA and contains two new ITCs that target clear power and manufacturing expertise. In authorities statements this week, it mentioned 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 obtainable to be used on or after March 28, 2023. In Price range 2023, expanded to authorities this ITC to make use of in geothermal power tasks, along with photo voltaic, wind and power storage. The time period of the ITC can be prolonged from phasing out in 2032, as supposed below the 2022 proposal, and can stay at 30% till December 2033, lowering to fifteen% in 2034 earlier than being phased out fully after 2034. .
A brand new incentive offered 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 power, power storage, interprovincial energy transmission and different clear power infrastructure tasks.
The ITC additionally applies to new hydroelectric, wave/tidal tasks, nuclear (together with small modular reactors), and abated pure gas-fired era.
The Clear Hydrogen ITC was introduced as a part of the federal government’s 2022 proposals. The brand new specs of the essential design components of the hydrogen ITC embody a volumetric ITC credit score primarily based on the carbon depth of the challenge, 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 known as utilizing much less carbon restoration can see 5% to 25 % ITC, relying on job circumstances.
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