Solar Investment Tax Credit Calculator (Canada)
Free Canadian commercial solar Investment Tax Credit calculator. Estimate your 30% federal Clean Technology ITC, Class 43.2 accelerated CCA, and net cost after every business incentive.
Solar Investment Tax Credit Calculator
Gross cost
$220,000
Total incentive
$96,800
Clean Tech ITC value: $66,000
CCA tax shield: $30,800
Provincial rebate value: $0
CCA tax shield: $30,800
Provincial rebate value: $0
Net cost after rebate
$123,200
Effective discount
44%
Strong incentive — Clean Tech ITC + Class 43.2
How to use this calculator
Canada’s Clean Technology Investment Tax Credit makes 2026 the most lucrative year ever for commercial solar capex. The calculator above stacks the 30% federal ITC, the Class 43.2 / 43.1 CCA tax shield, and provincial rebates into a single net-cost number:
- Gross system cost — total contract price by the CSA-certified EPC. CanREA’s 2026 Industry Snapshot puts commercial rooftop at C$2.00–C$2.50/W installed (higher than U.S. due to climate-engineering and snow-load requirements), so a typical 100 kW commercial rooftop system runs C$200,000–C$250,000.
- Federal Clean Tech ITC (% of cost) — 30% if labour requirements met, 20% if not.
- CCA Class 43.2 tax shield — present value of accelerated depreciation × your blended federal-provincial corporate rate (typically 25–27%).
- Provincial / utility rebate — PEI Solar Electric (C$1/W), Nova Scotia SolarHomes (C$0.30/W), Yukon Good Energy, BC CleanBC, Saskatchewan Net Metering.
How the math works
itc_value = gross_cost × 30%
depreciable_basis = gross_cost - itc_value (§13(7.1) ITA basis reduction)
cca_pv = depreciable_basis × combined_corp_rate × pv_factor
flat_rebate = provincial_rebate + utility_pbi
total_incentive = itc_value + cca_pv + flat_rebate
net_cost = gross_cost - total_incentiveA 100 kW commercial system in Ontario at C$220,000 with 30% ITC, Class 43.2 with AII full expensing, 26.5% combined rate (Ontario), and a C$5,000 utility rebate:
- Clean Tech ITC: C$220,000 × 30% = C$66,000 federal credit
- Depreciable basis: C$220,000 − C$66,000 = C$154,000
- AII full expensing × 26.5% combined corporate rate: C$154,000 × 26.5% = C$40,810
- Utility rebate: C$5,000
- Net cost: C$220,000 − C$66,000 − C$40,810 − C$5,000 = C$108,190 (50.8% effective discount)
Provincial table — combined corporate tax rates (2026)
| Province | Federal | Provincial | Combined |
|---|---|---|---|
| Ontario | 15% | 11.5% | 26.5% |
| Quebec | 15% | 11.5% | 26.5% |
| British Columbia | 15% | 12% | 27% |
| Alberta | 15% | 8% | 23% |
| Saskatchewan | 15% | 12% | 27% |
| Manitoba | 15% | 12% | 27% |
| Nova Scotia | 15% | 14% | 29% |
| New Brunswick | 15% | 14% | 29% |
| PEI | 15% | 16% | 31% |
| Newfoundland & Labrador | 15% | 15% | 30% |
| Yukon | 15% | 12% | 27% |
| NWT | 15% | 11.5% | 26.5% |
| Nunavut | 15% | 12% | 27% |
The small-business deduction (SBD) reduces the federal rate to 9% on the first C$500,000 of active business income (10% provincially varies). For a Canadian-controlled private corporation (CCPC) at SBD, combined rates fall to 11–13%.
Provincial rebates and incentives (2026)
- PEI Solar Electric Rebate Program — C$1.00/W cap C$10,000 (residential and small commercial)
- Nova Scotia SolarHomes — C$0.30/W rebate, ≤25 kW residential / commercial
- Yukon Good Energy — C$1.20/W up to C$5,000 for solar PV
- British Columbia CleanBC Better Buildings — non-residential energy-efficiency grant covering solar capex
- New Brunswick Total Home Energy Savings — residential only
- Quebec Rénoclimat — residential renewables
- Saskatchewan SaskPower Net Metering — credit at retail rate, no upfront rebate
- Alberta deregulated PPA market — no provincial rebate but very strong commercial PPA economics
- Manitoba Hydro Solar Energy Program — net metering at retail rate
Capital Cost Allowance schedule for Class 43.2
Under the Accelerated Investment Incentive (extended to end-2025) plus the half-year rule from 2026 onward:
| Year | AII (placed before 2026) | Standard half-year rule (2026 onward) |
|---|---|---|
| Year 1 | 100% | 25% (50% × 50%) |
| Year 2 | 0% | 37.5% |
| Year 3 | 0% | 18.75% |
| Year 4 | 0% | 9.38% |
| Year 5 | 0% | 4.69% |
The cliff at 1 January 2026 means projects placed in service in late 2025 capture the full first-year deduction, while 2026 projects must spread the deduction over multiple years and present-value the shield.
Worked example — 250 kW solar farm, Quebec dairy operation
- Gross system cost: C$525,000 (C$2.10/W, CSA C22.1 + Hydro-Québec interconnection)
- Clean Tech ITC: C$525,000 × 30% = C$157,500 federal refund
- Depreciable basis: C$367,500
- AII full expensing × 26.5% Quebec combined rate: C$367,500 × 26.5% = C$97,388 tax shield
- Hydro-Québec D rate net metering with banking (no upfront rebate but strong revenue stream)
- Net cost: C$525,000 − C$157,500 − C$97,388 = C$270,113
- Effective discount: 48.5%
Pair this with the tax credit calculator, cost calculator, and payback calculator
The investment tax credit calculator gives the upfront net-cost; the payback calculator turns it into break-even years using your provincial tariff; the cost calculator benchmarks your gross.
Sources
- Department of Finance Canada — Clean Technology ITC — primary policy
- Income Tax Act §127.45 + §13(7.1) — primary legislation
- Canada Revenue Agency — Class 43.2 — CCA rules
- Natural Resources Canada — PV Performance Maps — generation data
- CanmetENERGY — Solar Resource Atlas — design data
- CanREA Industry Snapshot 2026 — pricing benchmarks
- Provincial program pages — PEI, NS, YK, BC, NB, etc.
Frequently asked questions
What is the Canadian Clean Technology Investment Tax Credit?
The Clean Technology Investment Tax Credit (CT ITC) is a refundable corporate tax credit introduced by Bill C-59 (royal assent 20 June 2024) and amending §127.45 of the Income Tax Act. It pays a 30% credit on capital costs of eligible clean technology property — including solar photovoltaic equipment, energy-storage systems (≥10 kWh), active solar heating equipment, and small wind turbines — installed and placed in service between 28 March 2023 and 31 December 2034. The base 30% rate drops to 15% in 2034 and is fully phased out from 2035 onward. The credit is refundable for taxable Canadian corporations, meaning a corporation receives the credit as a refund even if it has no Part I tax payable in the year.
How does the Clean Technology ITC interact with Capital Cost Allowance Class 43.2?
Solar PV equipment qualifies as Class 43.2 property under Schedule II of the Income Tax Regulations, which provides 50% accelerated declining-balance CCA for clean energy generation equipment placed in service before 1 January 2025. The Accelerated Investment Incentive (AII) introduced in 2018 boosts year-1 CCA to 100% (full expensing) for Class 43.2 acquisitions before end-2025; standard half-year rule applies thereafter. From 2025 forward, Class 43.2 reverts to Class 43.1 with a 30% declining-balance rate. Crucially, claiming the 30% Clean Tech ITC reduces the undepreciated capital cost (UCC) base by the credit amount under §13(7.1) ITA, so depreciation flows from the post-credit basis. A C$200,000 system that takes the 30% ITC depreciates the remaining C$140,000.
What labor requirements apply to claim the full 30% Clean Tech ITC?
From 1 October 2024, Bill C-59 introduced labour requirements that mirror the U.S. IRA's prevailing-wage and apprenticeship rules. To claim the full 30%, the taxpayer must (1) pay all covered workers prevailing wages as published by the Department of Finance and aligned with the most recent collective agreement applicable in the locality, and (2) ensure 10% of total labour hours are performed by registered apprentices. Failing the labour requirements drops the credit to 20% (a 10-percentage-point haircut) — but does NOT eliminate the credit entirely. Records of certified payrolls, hours, and apprentice ratios must be retained for the recapture period. Smaller residential and unincorporated business projects below an income threshold are exempted under the regulations.
Can a Canadian corporation stack provincial incentives on top of the federal Clean Tech ITC?
Yes — provincial tax credits and rebates generally stack with the federal ITC, but the interaction with the CCA basis differs by program. PEI's Solar Electric Rebate Program pays C$1.00/W (capped at C$10,000); Nova Scotia SolarHomes pays C$0.30/W; Yukon Good Energy provides up to C$3,000 per kW capacity for commercial solar; New Brunswick Total Home Energy Savings (residential) and BC's CleanBC Better Buildings (commercial) offer non-tax cash incentives. Quebec's Rénoclimat targets residential. Provincial cash incentives that arrive before the project is completed reduce the cost basis used to calculate the federal Clean Tech ITC; rebates received after the credit is claimed do not. The Greener Homes Loan (0% APR, up to C$40,000 over 10 years) continues for residential applicants only; the Greener Homes Grant program closed to new applicants in February 2024.
What's the difference between Class 43.1 and Class 43.2 for solar?
Both classes cover clean energy generation equipment under Schedule II of the Income Tax Regulations, but the rates differ. Class 43.1 (declining-balance 30%) is the legacy class for clean energy property dating back to 1994. Class 43.2 (declining-balance 50%) was introduced in 2005 specifically to accelerate the after-tax economics of renewables and applies to assets placed in service before 1 January 2025. With the Accelerated Investment Incentive applied through end-2025, businesses can claim 100% first-year CCA on Class 43.2 acquisitions. From 2025 onward, all new clean energy capex defaults to Class 43.1 (30%) unless the asset specifically qualifies for the new Class 56 (zero-emission vehicles) or Class 57/58 (carbon capture). Multiply the depreciation × the combined federal-provincial corporate rate (Ontario 26.5%, Quebec 26.5%, Alberta 23%, BC 27%, Saskatchewan 27%) to compute the tax shield.