30% Credit on Commercial Geothermal

Why this matters more for geothermal than anything else

The Clean Technology Investment Tax Credit returns 30%, refundable, on qualifying commercial clean technology property, for property available for use through 31 December 2033. It drops to 15% for 2034 and disappears from 2035.

Refundable means it is paid as cash, whether or not the corporation has tax payable. It is not a deduction against profit.

On a ground source project, the qualifying property includes the loop field. Since the ground works are typically the largest line in the budget, this is the most favourable incentive treatment available on any building measure in Canada.

Who can claim it

Taxable Canadian corporations
Mutual fund trusts that are real estate investment trusts
Corporate partners in a partnership, flowed through on T5013

Who cannot

Individuals and sole proprietorships. Residential systems are excluded entirely.

Municipalities, school boards and non-profits are not taxable corporations and cannot claim it — which matters because those are exactly the owners for whom geothermal otherwise makes the most sense. Build the business case without the credit rather than around it.

The labour election: 30% or 20%

To receive the full 30%, the claimant makes a written election at filing and meets two conditions:

Prevailing wage for the classification, experience and work location, based on applicable collective agreement terms.
Reasonable, documented effort toward 10% of total Red Seal trade hours being performed by registered apprentices.

Without it, the rate is 20%. On a $1 million institutional geothermal project that is a $100,000 difference, decided in how the contract is written and what records are kept from the first day on site — not at filing time, which is when most owners first hear about it.

The in-service date

The credit is triggered by the date the property becomes available for use. Not the contract date, not the payment date. On a project with a long drilling and commissioning programme, that date is a deliverable to be managed, not an outcome to be reported.

What we do

Confirm the claimant entity and eligibility before design
Structure the contract and crew records so the labour election is defensible
Manage the schedule against a target in-service date
Hand your accountant the documentation package the claim needs

We are not your tax advisors and we do not file your return. We make sure the project does not disqualify itself before your accountant ever sees it.

Common questions

Does the credit really include the drilling?

On a commercial system the qualifying property includes the ground loop, which is what makes this credit so much more valuable on geothermal than on other measures.

Can a homeowner claim it?

No. Residential systems are explicitly excluded, and the credit requires a corporate claimant in any case.

What if our project finishes in 2034?

The rate falls to 15% for property available for use during 2034, and to nothing from 2035. On a long programme that makes the in-service date a scheduling priority, not an administrative detail.

The 30% Credit, Loop Field Included