The Canadian federal government has approved a new six-year investment tax credit for new solar, wind and energy storage projects to be 2034 in the country until the end of March, will enjoy the tax credit provided by the Canadian government.
The ITC is a two-stage 2033 of a 30 per cent rebate by the end of December and a 15 per cent rebate by the end of the 2034. In the 2023 budget approved by the Canadian government, the ITC policy extends to geothermal, solar, wind and energy storage, as well as new hydropower, wavestide, nuclear and natural gas generation. In addition, the Canadian government will grant up to 40 percent of the ITC tax credit for eligible hydrogen projects.
It is well known that the country, the world's second-largest, lags far behind the photovoltaics country, which also has lots of open space and a small population. If Canada plans to develop photovoltaic power, not only the land cost is low, its lower temperature, high-latitude solar radiation resources more conducive to photovoltaic power generation.
In addition, there are also domestic photovoltaic manufacturers in Canada, such as Canadian Solar, Silfab Solar, Heliene Solar, etc. . Previously, due to low domestic demand, they mainly targeted the U.S. market, even Jinko has considered entering the U. S. market by partnering with local component manufacturer Heliene and using its proven facilities to produce components.
In addition to the clean technology ITC being included as part of the Canadian government's 2023 budget, the Canadian government has introduced the IRA (similar to the U.S. Inflation Reduction Act) , which includes two new ITC's for clean energy and technology manufacturing, the Canadian government says the new plan is intended to allow Canada to remain competitive with its southern neighbor. It is understood that the 30 per cent refundable tax credit will also be extended to clean technology manufacturing to invest in machinery and equipment used in the manufacturing process, as well as in the extraction, processing and recycling of key materials in the clean supply chain.
In its autumn 2022 economic statement, the Canadian government said that after the passage of the inflation reduction act in the United States, canada's need for competitive clean technology tax credits is more important than ever. The ITC stimulus for PV installations, combined with the IRA manufacturing incentives, could be a major boon for domestic PV module companies in Canada, including Canadian Solar (parent company of Atlas) .
The Canadian government has made the clean energy economy one of the three pillars of its multi-year budget plan. The federal goal is to have the grid net zero by 2035 through tax breaks for clean energy projects over the next six years. As a result, the Canadian government has also provided a new investment tax credit incentive for non-taxable entities with capital costs of up to 5 per cent.