Updated Checked by the Tax-Services.ca editorial team How we check
Checked 10 November 2026. Homeowners get no federal tax credit for solar panels, and the Greener Homes Grant and Loan are closed. Businesses can use the Clean Technology credit and capital cost allowance. Sales tax, net metering and rebates depend on the province.
This guide pulls together what the CRA, Natural Resources Canada, Finance Canada and provincial governments say about the tax side of solar energy. It covers homes, rentals, farms and corporations. Where a government page did not answer a question, we say so.
What can you actually deduct or get back for solar panels in Canada?
A homeowner who puts solar panels on a house gets no federal income tax credit and no federal deduction for the cost. The only federal incentives that ever paid homeowners directly, the Canada Greener Homes Grant and Loan, are closed. Businesses are in a different position: they can write off solar equipment faster through capital cost allowance, and taxable Canadian corporations can claim up to 30% of the cost back through the Clean Technology investment tax credit. Provinces fill some of the gap with rebates, sales tax rules and net metering. The table below sums up where each piece stands on 10 November 2026.
| Question | Short answer | Status |
|---|---|---|
| Federal tax credit for home solar | None found on the CRA lists of credits and deductions | Not available |
| Canada Greener Homes Grant ($1,000 per kW, up to $5,000) | Paid for solar PV, not taxable | Closed |
| Canada Greener Homes Loan (up to $40,000, interest free) | No new approvals | Closed |
| Clean Technology investment tax credit (30%) | Taxable Canadian corporations only, new property | In force to 2033, extension proposed |
| Capital cost allowance, Class 43.1 | 30% declining balance, with a faster first year for business owners | In force, newer first-year rule still described as proposed |
| GST, HST, PST on panels | Depends on the province, BC exempts panels from PST | In force |
| Tax on credits for surplus power | No CRA page found on net metering | Unclear, see below |
| Provincial rebates | Ontario, Manitoba, Northwest Territories and others, amounts differ | Check each program |
Everything on this page comes from government sources. Where we could not read an official page, we say so and leave the figure out rather than guess.
Which situation sounds like yours?
Solar tax advice changes completely depending on who owns the system and what it does. Find your case first, then jump to the section that goes with it.
- You own a house and want to cut your power bill. You get no federal tax credit, you pay sales tax on the equipment in most provinces, and your savings come from the bill, not from the return. Start with the homeowner credit question and sales tax by province.
- You expect to send power back to the grid. Your utility decides whether surplus becomes a bill credit or a payment, and that decides whether you have a tax question. Read surplus power and tax and net metering by province.
- You own a rental property. The cost is a capital expense you write off over time, not a one-year deduction. See rentals and farms and our rental income tax guide.
- You run a farm or a small business. You may qualify for sales tax relief, faster depreciation, or both. Go to capital cost allowance and company tax deductions.
- You run a corporation. The Clean Technology and Clean Electricity credits are written for you. Read the business credits and compare your rate with federal corporate tax rates.
- You plan to sell the house. The principal residence exemption still applies. See selling a home with solar.
Is there a federal tax credit for home solar panels?
No. We searched the CRA page that lists deductions, credits and expenses for individuals and it names no energy, renovation or solar credit. The only housing item on that list is the home office expense claim. Absence from a list is not a quotation, so the careful way to put it is this: we found no federal personal tax credit or deduction for installing solar panels on a home you live in.
Two federal items sometimes get confused with a solar credit. The first is the Clean Technology investment tax credit, which is a business credit. The CRA says personal-use property is not eligible, so a roof array that serves your own house does not qualify. The second is the Multigenerational Home Renovation Tax Credit, which gives 14.5% of up to $50,000 of qualifying costs, a maximum of $7,250. It exists for a renovation that creates a secondary unit for a senior or an adult with a disability, such as a basement suite. The CRA page does not mention solar, so do not assume panels count even when they are part of such a project. Ask the CRA before you claim.
Budget 2025 did not add a homeowner solar measure either, and the text of Budget 2026, tabled on 5 November 2026, shows none in the parts we read. Both budgets focus the solar tax money on business credits and utility scale projects. For the rest of the rules a homeowner faces, see our guide on Canadian tax credits and government benefits.
What happened to the Canada Greener Homes Grant and Loan?
Both are closed. Natural Resources Canada reports that applications to the grant ran from May 2021 to February 2024 and that December 31, 2025 was the last day applicants could upload documents. The program paid about $1.8 billion at an average of about $4,430 per household. Solar photovoltaic systems, including panels and inverters, were on the list of eligible retrofits.
| Item | Southern and grid-connected homes | Northern and off-grid homes |
|---|---|---|
| Solar PV grant | $1,000 per kW installed | $1,300 per kW installed |
| Range per system | $1,000 to $5,000 | $1,300 to $5,000 |
| Minimum system size | 1.0 kW DC, pro-rated on added capacity | Same rules |
| Battery with a PV system | No separate amount found | $1,300 as a resiliency measure, only with another efficiency retrofit |
| Cap per household | $5,000 for solar | $5,600 across measures |
The NRCan example uses a 3.5 kW system and a $3,500 grant. The equipment had to be CSA certified, permanently mounted and bought in Canada, and a grid-tied system needed an interconnection approval letter. Your own labour was not eligible. Sources: eligible retrofits and grant amounts and the grant for northern and off-grid homes.
Was the grant taxable?
No. NRCan states: "The federal grants are not taxable and do not have to be declared as income." The same page tells grant recipients to keep copies of their documents until March 31, 2028, so if you received a grant, keep the file. We found this statement from NRCan only, and not on a CRA page. Provincial and municipal top-ups follow their own rules. See step 5 of the grant process.
What about the interest-free loan?
The Canada Greener Homes Loan offered $5,000 to $40,000 interest free over ten years. NRCan says the funding is fully committed and new applications cannot be approved. CMHC, which administers the loan, says its portal closed to new applications on October 2, 2025. Loans that were already approved keep running. See the loan page and CMHC on the Greener Homes loan.
Which federal home energy programs are still open?
Only a few, and none of the ones we read lists rooftop solar. The Canada Greener Homes Affordability Program is active. It runs with provinces and utilities for lower and middle income households and covers the full cost of recommended retrofits for eligible homes. The examples in the June 2026 federal backgrounder are heat pumps, insulation, air sealing, windows, doors and smart thermostats. Funding named in that backgrounder includes $243.5 million for Quebec ($172.5 million federal), about $177.3 million for BC Hydro customers, about $45.2 million for FortisBC customers, $26 million for Nova Scotia and about $15 million for Prince Edward Island.
The Oil to Heat Pump Affordability Program stopped taking applications after July 31, 2026. The National Heat Pump Rebate is a $2 billion program for up to 820,000 households, with up to $10,000 for households below the median income and $2,000 above it. It counts retroactively from November 1, 2026, the portal is expected to open in early 2027, and it is for heat pumps only. See the Canada Greener Homes Initiative page and one million home energy retrofits.
CMHC has two mortgage insurance refunds. CMHC Eco Plus returns 25% of the premium to buyers of a newly built energy-efficient home that meets a rating at least 20% better than a typical new home. CMHC Eco Improvement returns 25% to buyers who then do energy-efficient renovations. Neither page we read mentions solar by name. Details are on the CMHC Eco Plus page.
The federal money that does reach solar is larger and aimed elsewhere. The Smart Renewables and Electrification Pathways Program is a $4.5 billion program expected to run to March 31, 2036, for utility and Indigenous-led projects. NRCan reports 39 approved solar PV projects as of June 30, 2026, and both of its streams are currently not accepting proposals. The Wah-ila-toos initiative says its Clean Energy for Rural and Remote Communities stream is fully committed and scheduled to close on March 31, 2027, while Northern REACHE is still accepting applications. None of these is a program for one household. See SREPs and Wah-ila-toos funding.
Do you pay GST, HST or PST on solar panels?
Yes in most of the country. We found no CRA page that exempts or zero-rates residential solar panels, so the federal GST of 5% or the HST rate of your province applies to the equipment and the installation. The CRA publishes the harmonized rates in its place of supply guide: Ontario 13%, Nova Scotia 14%, and New Brunswick, Newfoundland and Labrador and Prince Edward Island 15%. Quebec is a non-participating province, so the CRA collects only the 5% GST, and Revenu Québec handles the QST. See the CRA place of supply overview.
The provinces that charge their own sales tax handle solar differently. British Columbia is the clearest case. Bulletin PST 132, revised in April 2026, says solar photovoltaic collector panels are exempt from PST. Wiring, controllers and DC to AC inverters are exempt only when bought together with the panels as part of one system, and they are taxable if sold separately. Batteries are treated as generic goods: when bought for a solar system, they do not qualify for the exemption. The bulletin is on gov.bc.ca.
| Province or territory | What we verified |
|---|---|
| British Columbia | Panels exempt from PST, batteries taxable, system parts exempt only when bought with the panels (Bulletin PST 132, April 2026). See BC PST and GST |
| Alberta | No provincial sales tax, only GST. See Alberta sales tax |
| Saskatchewan | No general solar exemption found. Bulletin PST-16 lists solar panels for livestock watering troughs as exempt for farms |
| Manitoba | No general solar exemption found, see Manitoba sales tax. Bulletin RST 018 exempts solar panels used exclusively in farm production with a Farm-Use Certificate |
| Ontario | 13% HST. No exemption or rebate found. See Ontario sales tax |
| Quebec | 5% GST federally. QST is a Revenu Québec matter, see Quebec sales tax |
| New Brunswick, Nova Scotia, PEI, Newfoundland and Labrador | HST at 15%, 14%, 15% and 15%. No solar exemption found |
| Yukon, Northwest Territories, Nunavut | No territorial sales tax, only GST |
Newfoundland and Labrador Hydro adds one useful rule on its net metering page. All customers pay HST on energy supplied by Hydro during the billing month. If you must collect HST on the generation you supply, Hydro pays HST on your generation credit, but you must tell Hydro in writing. That is the only statement we found from a utility about HST on surplus generation. For a plain explanation of all the sales taxes, see GST, HST, PST and QST explained for every province and use the GST/HST calculator to price a quote.
Is money or credit from surplus solar power taxable?
The CRA has not published guidance on how ordinary net metering credits are taxed. We searched the CRA site, its folios and its technical interpretations for any statement on net metering credits or on payments for surplus electricity from a home system. We found none. The CRA folio on clean energy equipment says nothing about net metering, and the only government page that describes the mechanism, from Measurement Canada, covers billing and has no tax comment.
That gap matters because the way a utility settles your surplus decides what you are dealing with. In a pure credit model, the utility lowers a bill and no cash changes hands. In a payment model, the utility sends you money. The provinces use both models, and some use both in different rules:
- Credits only, no cash. Saskatchewan credits cannot pay basic charges or taxes and are not paid out in cash. Nova Scotia does not buy excess generation above your annual consumption in the same calendar year.
- Settled by payment or offset. Alberta requires the provider to settle unused credits at least once each calendar year, as a payment, an offset against charges owed, or a combination.
- Credit applied to the bill. Manitoba Hydro turns surplus into a monetary credit applied against other charges on the monthly bill, at a price it resets each year.
What can we say with confidence? The CRA has said, for Ontario microFIT contracts, that money earned from selling electricity is income, and the next section sets out the exact wording. That statement is about a sale contract, so it does not settle how net metering credits are treated. If you receive actual payments for surplus power, or you run the system as a business, talk to a tax professional and consider asking the CRA directly. A written CRA answer is worth more than any website, including ours. Our guides on dealing with the CRA and choosing a tax preparer explain how to ask.
What does the CRA say about microFIT and feed-in tariff income?
The CRA has a page for Ontario's FIT and microFIT programs, which paid owners a fixed price for electricity sold to the grid under a contract. It is the closest official guidance to a home solar owner who sells power, and it is worth knowing even if you are in another province. The page says:
- A participant includes in income for the tax year all amounts earned for electricity generated by the project, whether or not the participant uses any of the electricity personally.
- The income is treated as coming from either a business or property.
- A participant's personal home consumption of electricity is a personal expense that is not deductible.
- A participant may deduct reasonable expenses incurred to earn business or property income.
- Capital cost allowance on the equipment is limited to the net income from the property, and it cannot be used to create or increase a loss.
The page also shows the allowance classes: Class 43.1 at 30% and Class 43.2 at 50% on a declining balance basis, with the usual half-rate rule in the first year. The CRA folio on clean energy equipment goes further and uses an example of a homeowner selling power from solar panels to a provincial authority. In that example the panels are not used to earn income in the way required for the usual business treatment, so they fall into a class called specified energy property, which has the loss limit above. The folio states that it is current only to August 2, 2019, so check for updates. See the CRA page on Ontario FIT and microFIT and Income Tax Folio S3-F8-C2.
GST/HST on microFIT sales
CRA info sheet GI-122 says the sale of electricity under the microFIT program is a taxable supply for GST/HST. It expects most participants to be small suppliers. Registration is required once taxable sales pass the small supplier threshold and is optional below it. A registrant can claim full input tax credits on a system used exclusively to sell power, and when the registrant later sells the system or stops using it for taxable sales, tax is deemed collected on its value. The info sheet was issued in 2011 and last updated in 2021. See GI-122.
The small supplier threshold is $30,000 of taxable sales over four consecutive calendar quarters, according to CRA Memorandum 2-2 (June 2026). A small supplier in commercial activity can still register voluntarily. For the registration rules in plain words, read GST for small business and how to get an HST account.
How do net metering rules compare across the provinces?
Net metering is provincial, and the rules for size, credit value and expiry differ a lot. This table lists what we could read on government and Crown utility pages. Where a province is missing, we could not open its official pages and did not want to quote search snippets.
| Jurisdiction | Size limit | How surplus is valued | What happens to unused credit |
|---|---|---|---|
| Ontario | Cap not stated on the ontario.ca page. You need approval before buying equipment | Same rates you pay for electricity | Carries over to future bills for up to 12 months |
| Alberta, small micro-generation | Under 150 kW. Absolute limit is the lesser of 5 MW or the service rating | Retail energy rate you pay the provider | Carry forward up to 12 months, settled by payment or offset at least once a year |
| Alberta, large micro-generation | 150 kW to 5 MW | Pool price for each settlement interval | Same settlement rule |
| Saskatchewan | Up to 100 kW DC per meter, 500 kW of projects per calendar year | Monthly credit at the approved net metering rate, posted by SaskPower | Carries forward while the account is active, not paid in cash |
| Manitoba | Under 100 kW | $0.07173 per kWh until March 31, 2027, reset each year | Monetary credit applied against other charges on the monthly bill |
| Nova Scotia, residential | 27 kW or less | Surplus kWh banked through the calendar year | Applied to billed consumption at year end, excess above annual consumption not purchased |
| Nova Scotia, commercial | Minimum 27 kWac, up to 1,000 kWac for demand-rate customers, wineries, farms and aquaculture, 200 kWac for others | 1 to 1 at the customer retail rate | Banked within the calendar year, no cash payout |
| Newfoundland and Labrador | Lower of 100 kW and the capacity you need | Marginal wholesale rate (Island), imbalance rate (Labrador) | Banked, any surplus at the annual review credited on the anniversary of connection |
| Northwest Territories | Generally not above 15 kW (pilot project) | kWh credits at the full retail rate | Reset to zero at the end of March |
| Nunavut | See the Qulliq Energy Corporation program | Credits applied to the monthly bill | Reset to zero on March 31 |
Sources: ontario.ca net metering, Alberta Micro-generation Regulation, SaskPower net metering guidelines, Manitoba Hydro, NS Power self-generating option, NL Hydro net metering and NTPC net metering. Programs for BC, Quebec, New Brunswick, Prince Edward Island and Yukon have their own utility pages, listed in the next sections. Always read the current page before you sign a contract, because credit prices and caps move.
One detail catches buyers in two provinces. In Saskatchewan the credit can offset only the consumption charge, not the basic monthly charge or taxes. In Alberta, the settlement can be a real payment, which is why the tax question above becomes sharper there.
Can a business claim the Clean Technology investment tax credit for solar?
A taxable Canadian corporation can. The credit is refundable and covers up to 30% of the capital cost of new clean technology property acquired and available for use from March 28, 2023 to December 31, 2033. The rate falls to 15% in 2034 and the credit is not available after that. Solar generation equipment qualifies, and so does active solar heating equipment, but the property must be new. If the business does not meet the labour requirements, the rate is 10 percentage points lower, which means 20% instead of 30%. Employers who elect to meet the labour requirements avoid that reduction.
Who can claim
The CRA lists two kinds of claimant: a taxable Canadian corporation (including one that is a member of a partnership) and a mutual fund trust that is a real estate investment trust. The page does not list individuals, so a sole proprietor, a homeowner and a person who earns income as an individual are not on the list. The CRA also says that personal-use property is not eligible. A corporation that owns a building and puts solar panels on the roof to power its own operations is the standard case. See who can claim the Clean Technology ITC and which property qualifies.
How the claim is filed
A corporation files Schedule T2SCH75 along with Schedule 31 with its T2 return. The claim goes on line 155 of Schedule 31 and flows to line 780 of the T2. Partnerships use T5013SCH75, and the members see the credit in box 265 of their T5013 slip. The credit is recaptured if the property is converted to non-clean use, exported or disposed of within the year or the preceding 10 calendar years. The CRA says late filing may be accepted if filed by the later of December 31, 2026 or one year after the due date. See how to claim the Clean Technology ITC.
The Clean Electricity credit
A second credit, the Clean Electricity investment tax credit, gives up to 15% of the capital cost of eligible clean electricity property such as solar panels. Bill C-15 received Royal Assent on March 26, 2026 and brought it into effect. It reaches back: property bought and available for use on or after April 16, 2024 can qualify if construction began after March 28, 2023. The claimant must be a qualifying entity, which includes taxable Canadian corporations, certain pension corporations, the Canada Infrastructure Bank and the Canada Growth Fund. Provincial and territorial Crown corporations can now apply. See which property qualifies for the Clean Electricity ITC.
How does capital cost allowance work for solar equipment?
Capital cost allowance, or CCA, is the tax version of depreciation. You cannot deduct the whole price of a solar system as a current expense, because it lasts for years. You deduct a share each year instead. Solar photovoltaic equipment is listed in Class 43.1, which has a 30% rate on a declining balance basis, and the CRA folio says Class 43.2, with a 50% rate, applied to most of the same equipment acquired before 2025. The current CRA page says Class 43.2 property must be acquired before 2025. For a general explanation of the method, see Capital cost allowance: how the CCA deduction works.
The regulation is specific about what counts. Under Schedule II of the Income Tax Regulations, subparagraph (d)(vi) of Class 43.1 covers fixed-location photovoltaic equipment used primarily to generate electrical energy from solar energy, if it consists of solar cells or modules and related equipment including inverters, control and conditioning equipment and support structures. Active solar heating equipment is covered by an earlier subparagraph. Read the exact wording on Justice Laws.
The faster first year
The CRA Accelerated Investment Incentive page lists an enhanced first-year allowance for Class 43.1 and 43.2 property of 55% for 2026 and 2027, with nothing from 2028. Separately, the Government proposed a new enhanced first-year allowance for Class 43.1 property acquired on or after January 1, 2025 and available for use before 2034, with a phase-out over four years for property available after 2029. The CRA pages we read on 10 November 2026, including the T4002 farm guide and the classes of depreciable property page, still describe this newer rule as proposed. Bill C-15 got Royal Assent on March 26, 2026 and its summary mentions reinstating the accelerated investment incentive and immediate expensing for certain assets. We could not confirm in the bill text that it names Class 43.1 solar equipment, so check the current CRA page and your accountant before you rely on a first-year percentage. See the Accelerated Investment Incentive and classes of depreciable property.
The loss limit
Specified energy property is generally Class 43.1 or 43.2 property, and CCA on it is limited to the income from such property. It cannot create or add to a loss. The rule does not apply to a corporation that meets the principal business test, such as one that manufactures, mines or sells energy. That is why a part-time owner with a small system and a cheque from the utility generally cannot use the allowance to shelter other income.
How are solar panels treated on a rental property or a farm?
On a rental property the cost is a capital expense in the ordinary sense. The CRA rental income guide says a capital expense generally gives a lasting benefit or advantage, a current expense usually recurs after a short period, and an expense that simply restores a property to its original condition is usually current. A new solar system is not a repair, so it belongs with the capital items you depreciate through CCA, and the same guide refers to Class 43.1 property that becomes available for use before 2034. The wording of the guide does not discuss solar systems in particular, so confirm the treatment with a preparer. Related reading: rental income tax in Canada, rental property deductions and the rental CCA recapture calculator. See CRA guide T4036.
Farms have the most specific sales tax relief we found. Saskatchewan bulletin PST-16 lists solar panels for livestock watering troughs among exempt farm items, some requiring a Farm Exemption Certificate. Manitoba bulletin RST 018 exempts solar panels used exclusively in farm production when the buyer holds a Farm-Use Certificate, but taxes lighting plants and generators for domestic use on a farm site. Alberta's On-Farm Efficiency Program is described by the Utilities Consumer Advocate as up to $0.60 per watt, capped at 25% of project cost or $50,000, for farms earning at least $10,000 a year from production. The page does not say whether the program is open, so check before you plan around it. Nova Scotia's commercial net metering allows up to 1,000 kWac for farms. Federal farm guides such as T4002 carry the Class 43.1 and 43.2 sections that apply to farm equipment.
Which provincial rebates and loans can you still get?
Provinces and utilities run the only live incentives for homes. The table lists the ones whose official pages we could read, with the exact wording we found. It is not a full list of every program in the country.
| Province | Program | What the page says |
|---|---|---|
| Ontario | Home Renovation Savings Program, run by IESO Save on Energy | Solar panels and battery storage appear under single upgrades at "Up to $10,000", with additional terms and conditions. No deadline stated |
| Manitoba | Efficiency Manitoba solar rebate | $0.50 per watt for homes, up to 10 kW and up to $5,000 per home. The business page lists a different per watt figure |
| Northwest Territories | Arctic Energy Alliance renewable energy rebate | Residents up to $20,000. The rebate is the lower of 50% of eligible costs or $4.00 per watt for solar electric. Grid-connected renewable electricity is not eligible in communities served by hydro. First come, first served, with pre-approval |
| Alberta | Clean Energy Improvement Program | Low-interest financing tied to the property, repaid through property taxes, with terms up to 25 years, offered only in select municipalities |
| Saskatchewan | SaskPower | No rebates or programs for residential solar panels |
| Alberta | Provincial rebate | None named by the Utilities Consumer Advocate. Municipalities set their own incentives |
Official pages: Save on Energy, Efficiency Manitoba, Arctic Energy Alliance and the Alberta Utilities Consumer Advocate. Rules also change by program year, so confirm the amount before you sign a contract.
Provinces to check yourself
We could not read the program pages for the following, so we give no amounts. Each has its own current program and rules: British Columbia BC Hydro solar and battery rebate and self-generation rates; Quebec Hydro-Québec for its solar grant and net metering option; New Brunswick NB Power; Prince Edward Island Maritime Electric and the provincial energy efficiency agency; Yukon the renewable energy rebate page; and Nova Scotia Efficiency Nova Scotia SolarHomes. Several of these programs have changed or closed in the last two years, so an old blog post is a poor guide.
Do solar panels raise your property tax?
Usually not for a normal house, but the rules are provincial and local. In Ontario, the assessment agency MPAC says a rooftop system may not change the assessed value when the primary use of the property does not change, for example when it stays residential. A ground-mounted system of up to 10 kW that is not the primary use does not change the value. From 10 kW to 500 kW the property class stays the same but the value may rise. Over 500 kW, part of the property may be reclassified as industrial. MPAC sets the assessment and the municipality sets the tax rate. Leasing land to a power producer can raise the value. See MPAC on solar panels.
In Alberta, the Matters Relating to Assessment and Taxation Regulation defines an electric power system as a distribution, generation or transmission system, and it leaves out a system that generates electricity solely for the person's own use and a micro-generation generating unit under the Micro-generation Regulation. In practice, a home array is not assessed as an electric power system. For how property tax works in general, read how property tax works in Canada. We found no official property tax guidance for the other provinces, so ask your municipality.
What happens to your taxes when you sell a home with solar panels?
The CRA does not publish a rule specific to solar panels here, so the general rules apply. The adjusted cost base of a property includes capital expenditures such as the cost of additions and improvements, but not current expenses such as maintenance and repairs. If the home was your principal residence for every year you owned it, or for all years but one, the gain is normally covered by the principal residence exemption, and the extra cost of panels does not change that. See CRA guide T4037 and our pages on capital gains on a primary residence and the principal residence exemption.
Three situations change the picture. First, if you earned income from the system and claimed CCA, selling the home or the system can trigger recapture of that allowance. The CRA page on FIT and microFIT treats the sale of a home with a renewable energy property as a case where the renewable portion is handled separately. Second, if the system sells power in a business, a registrant may owe deemed GST/HST on its value when it stops taxable use, as GI-122 explains. Third, if part of the property earns income, the sale may need a split of the proceeds. Run the numbers with the principal residence exemption calculator and speak to a preparer before you list. Our guide to property and tax in Canada and the page on capital gains when you sell a home cover the rest.
What did Budget 2026 propose for solar?
Budget 2026, tabled on November 5, 2026, proposes to extend the Clean Electricity and Clean Technology investment tax credits to property available for use before 2041. The Clean Technology rate would drop to 15% in the last year, moved from 2034 to 2040. The cost estimate is $2.4 billion across 2027 to 2028 through 2030 to 2031 and $36.1 billion across 2031 to 2032 through 2041 to 2042. A consultation on a domestic content bonus of up to 10 percentage points runs alongside it. These are proposals, not law, and they apply to businesses.
The same budget proposes more than $50 billion to expand the electricity system, nearly $4 billion over 10 years from 2027 to 2028 including SREPs, $6 billion over six years for emerging generation technologies and $1.6 billion over 10 years including $713.8 million for renewable energy in Indigenous, rural and remote communities. It also proposes a National Heat Pump Rebate for up to 820,000 households. We saw no homeowner solar credit in the text we read. Our page on Canadian taxes in 2027 tracks which items are confirmed and which are proposals, and Budget 2026 for the self-employed and small business owners covers the small business items. See the Budget 2026 tax measures.
What do official sources say about solar output and cost?
Governments publish good data on how much a panel produces and almost none on what a home system costs. NRCan's photovoltaic potential maps define potential as the expected lifetime average annual kilowatt hours produced per kilowatt of installed DC capacity, for a grid-connected system without a battery. The calculation uses a performance ratio of 0.75, notes that well-working systems typically run 0.75 to 0.9, assumes degradation of about 0.6% a year, and says lifetime values should be within about 10%. The data cover more than 3,500 municipalities and can be downloaded from the Open Government portal. Use your municipality's figure and not a national average. See NRCan photovoltaic potential.
On cost, the Canada Energy Regulator's Energy Futures 2026 report gives utility-scale solar at $2,039 per kW in 2024, in 2025 dollars, and projects $1,840 per kW in 2030 under current measures. That table does not include rooftop or residential prices, and no official source we found gives a typical home system size, installed price or payback period. Any specific payback figure you read elsewhere is an estimate and not a government number. Compare quotes line by line, keep the permit and interconnection approval, and ask the installer to state whether sales tax and any rebates are in the price. Read the data on the CER Energy Futures appendix.
What should you check before you install solar panels?
- Confirm the utility approval first. Ontario says you must apply and get approval before buying equipment, and some areas cannot connect. Saskatchewan charges a $315 interconnection study fee that includes GST and is not refundable.
- Read the credit terms. Does surplus expire, carry forward, or turn into cash? That decides both your savings and your tax question.
- Price the sales tax. Ask for the quote showing GST, HST or PST. In BC check whether the panels, inverter and wiring are bought as one system, and note that batteries are taxable.
- Check each rebate against its current page. Program amounts and open dates change, and several have closed.
- Keep your paperwork. If you received the federal grant, NRCan asks you to keep documents until March 31, 2028. Keep invoices, permits and approval letters in any case, because they support the cost base if you sell.
- Do not claim a personal credit that is not on the CRA lists. If a salesperson says there is a federal tax credit for home solar, ask for the CRA page that says so.
- If you sell power as a business, look at GST/HST registration, CCA and the loss limit, and get written advice.
The CRA pages change, and so do the provincial programs, so recheck them before you sign. Filing dates are on the Canadian tax calendar 2027. Use our income tax calculator to see how a deduction would change a return, and the self-employed and small business guide if the system belongs to a business.
How is this page kept current?
We checked the pages cited here on 10 November 2026 and mark anything we could not read as unverified. We update the page when the CRA, Finance Canada, NRCan or a provincial government changes a rule or a program opens or closes. The main items to watch are the status of the proposed Class 43.1 first-year allowance, the Budget 2026 credit extension, the Canada Greener Homes Affordability Program and the provincial programs listed above.
This is an independent information site. It provides no services, does not represent the CRA, Natural Resources Canada, any province, any utility or any other organization, and collects information from open sources. It does not guarantee that anything here is accurate or current, and it accepts no liability for how you use it. It is not tax or legal advice. Check the official pages or a tax professional before you rely on a figure.
Frequently asked questions
Is there a federal tax credit for installing solar panels on my house?
No federal personal tax credit or deduction for home solar appears on the CRA lists of credits and deductions. The Canada Greener Homes Grant and Loan, which helped homeowners, are closed.
Was the Canada Greener Homes Grant taxable?
No. Natural Resources Canada states that the federal grants are not taxable and do not have to be declared as income. Keep your documents until March 31, 2028.
How much did the Greener Homes Grant pay for solar panels?
It paid $1,000 per kW of installed solar PV, from $1,000 to $5,000 per system, and $1,300 per kW in northern and off-grid communities. It is now closed.
Is the Canada Greener Homes Loan still available?
No. NRCan says funding is fully committed, and CMHC says its portal closed to new applications on October 2, 2025. Already approved loans continue.
Do I pay sales tax on solar panels?
Mostly yes. The CRA lists no solar exemption, so GST or HST applies. British Columbia exempts solar panels from PST but taxes batteries. Alberta and the territories have no territorial sales tax.
Is income from selling surplus solar power taxable in Canada?
The CRA has no page on net metering credits. For Ontario microFIT contracts it says money earned from selling electricity is income. Get advice if you receive payments.
Can a business claim a tax credit for solar panels?
A taxable Canadian corporation can claim the Clean Technology investment tax credit of up to 30% on new qualifying solar equipment acquired and available for use from March 28, 2023 to December 31, 2033.
Can an individual claim the Clean Technology investment tax credit?
The CRA lists only taxable Canadian corporations and real estate investment trusts as claimants and says personal-use property is not eligible, so individuals are not on the list.
What capital cost allowance class covers solar panels?
Solar photovoltaic equipment is in Class 43.1, which has a 30% declining balance rate. Class 43.2, at 50%, applied to property acquired before 2025.
Do solar panels increase property tax?
Often not for a home. Ontario assessment agency MPAC says a rooftop system may not change value when the use stays residential. Rules differ by province.
What does Budget 2026 propose for solar?
It proposes extending the Clean Electricity and Clean Technology tax credits to property available for use before 2041. It is a proposal, not law, and it applies to businesses.
Which province gives the best solar rebate?
It depends on the year and the program. Official pages we read show up to $10,000 in Ontario, up to $5,000 in Manitoba and up to $20,000 in the Northwest Territories, with different rules.