Clean Electricity Investment Tax Credit (CEITC)

Insider Tip

The 15% rate is conditioned on meeting CRA's prevailing wage and apprenticeship requirements for all manual labourers on the project — failure to commit reduces your rate to 5%, costing 10 percentage points on potentially hundreds of millions in capital. Confirm labour compliance before contractor selection, not after. The credit is retroactive to April 16, 2024 — if you placed eligible clean electricity property in service since that date (and construction pre-dated March 28, 2023 exclusion doesn't apply), you may be able to claim on a prior T2. This ITC is separate from and stackable with the Clean Technology ITC (30%) and Clean Technology Manufacturing ITC — but they cannot apply to the same property dollar. The CEITC targets electricity generation and storage infrastructure specifically; manufacturing equipment qualifies under CTM ITC instead.

Rejection Pitfalls 6

• Property is not eligible clean electricity property (e.g. fossil fuel generation without abatement, distribution equipment, buildings)
• Construction commenced before March 28, 2023 (property is excluded regardless of acquisition date)
• Property not acquired or not available for use by December 31, 2034

Success Profile

Large-scale electricity developers, utilities, and Crown corporations investing in wind, solar, hydro, nuclear (SMR), energy storage, or inter-provincial transmission. Also accessible to municipalities, pension funds, and Indigenous-owned corporations investing in community clean energy projects. Projects with eligible capital expenditures in the $10M+ range receive the most meaningful credits.

Evaluation Criteria

Entitlement program — no discretionary adjudication. CRA assesses the claim against: (1) Entity eligibility — does the applicant meet the entity type requirements; (2) Property eligibility — does the asset qualify as eligible clean electricity property under the Income Tax Act s. 127.491; (3) Timeline compliance — acquisition date and construction commencement date; (4) Labour compliance — prevailing wage and apprenticeship documentation for the applicable rate; (5) Capital cost calculation — accurate determination of eligible capital cost basis.

Application Steps

Required Documents 8

Eligible Expenses 9

• Capital cost of wind energy generation equipment
• Capital cost of solar photovoltaic and concentrated solar generation equipment
• Capital cost of run-of-river and other hydroelectric generation equipment
• Capital cost of nuclear fission generation equipment (including small modular reactors)
• Capital cost of geothermal electricity generation equipment exporting more electrical than heat energy
• Capital cost of stationary electricity storage equipment (batteries, pumped hydro — not using fossil fuels in operation)
• Capital cost of inter-provincial electricity transmission equipment and structures
• Capital cost of waste biomass electricity generation systems
• Capital cost of emissions-abated natural gas generation meeting strict GHG intensity limits (65 tonnes CO2/GWh with CO2 storage)

Ineligible Expenses 7

• Buildings and real property (land)
• Electricity distribution equipment (local grid, substations below inter-provincial level)
• Fossil fuel generation equipment without emissions abatement
• Equipment that began construction before March 28, 2023
• Equipment not acquired or available for use within the April 16, 2024 – December 31, 2034 window
• Operating costs, fuel, maintenance
• Equipment claimed under Clean Technology ITC or Clean Technology Manufacturing ITC (cannot double-dip)

Intake Periods

Continuous — claim filed annually with T2/T3 return for the year the eligible property becomes available for use. No intake windows. Retroactive claims possible for eligible property placed in service from April 16, 2024 onward.

Deadline Notes

Property must be acquired and become available for use between April 16, 2024 and December 31, 2034 to qualify. Construction must not have commenced before March 28, 2023. Credit is claimed on the T2 Corporation Income Tax Return or T3 Trust Return for the taxation year in which the property becomes available for use. Late filing accepted up to one year after the T2/T3 due date.

Ineligible Organizations

• Unincorporated businesses and partnerships (unless structured as a qualifying trust)
• Non-Canadian corporations not filing Canadian corporate tax
• Non-profit organizations and registered charities (unless structured as a qualifying municipality-owned entity)
• Individuals

Compatible Programs

Clawback Risk

Medium Risk

ITC recapture applies if eligible clean electricity property ceases to be used in a qualifying manner within a recapture period (typically 20 years). Disposition of the property, conversion to non-eligible use, or certain corporate restructuring events may trigger recapture proportional to time remaining in the recapture window. Recaptured amounts are added back to income in the year of the triggering event.