top of page

Harnessing Tax Benefits of Green Energy in Ontario Real Estate

Writer's picture: Medvisory TeamMedvisory Team

Updated: Jan 22

Ontario’s real estate market is full of opportunities for homeowners to embrace green energy initiatives, such as solar panels and energy-efficient retrofits. These upgrades not only reduce energy costs and environmental impact but also provide significant tax benefits. With a variety of federal and provincial incentives available, sustainable investments are more accessible than ever. By adopting green energy solutions, homeowners can enhance property value, lower operating expenses, and contribute to an eco-friendlier future.


Harnessing Tax Benefits of Green Energy in Ontario Real Estate

Federal Tax Incentives for Individuals


The Canadian government offers several tax incentives designed to make clean energy investments attractive for homeowners:


  • Clean Technology Investment Tax Credit (CT ITC)

    Homeowners can claim a refundable tax credit of up to 30% for eligible clean energy systems, such as solar panels, wind turbines, and energy storage solutions. The credit applies to property available for use between March 28, 2023, and December 31, 2034, with reduced rates for property installed in 2034.


  • Canada Greener Homes Loan

    This interest-free loan provides financing of up to $40,000 for major energy-efficient upgrades, such as improving insulation, replacing windows, or installing heat pumps. The loan is repayable over 10 years and can be combined with grants and tax credits for maximum financial benefit.

 

Ontario-Specific Benefits for Individuals


Ontario provides additional incentives to homeowners who invest in green energy:


  • Net Metering Programs

    Net Metering Programs in Ontario allow homeowners with renewable energy systems, like solar panels, to generate electricity and offset costs. Excess electricity is fed back into the grid, earning credits to reduce utility bills during periods of lower production, such as at night. Homeowners must meet technical requirements and connect to a participating utility to qualify.


  • Property Tax Rebates

    These are offered by some municipalities to encourage energy-efficient upgrades or certifications like LEED or ENERGY STAR. These rebates lower property taxes, reducing overall carrying costs for homeowners. To find out if you qualify, check with your local municipality for eligibility criteria, which typically include approved energy-efficient upgrades or certifications. Detailed guidelines are often available on municipal websites or through their tax departments.

 

Grants and Rebates Available for Individuals


  • Home Renovation Savings Program

    On January 7, 2025, the new Home Renovation Savings Program was announced. It offers rebates covering up to 30% of costs for energy-efficient upgrades. Key rebates include up to $8,900 for insulation, $7,500 for a cold climate air source heat pump, $5,000 for solar panels, and $600 for a home energy assessment, among others. Payments will be issued within 30 to 60 days of approval. The program will expand later in 2025 to include rebates for energy-efficient appliances.


  • Canada Greener Homes Grant

    Eligible homeowners can receive up to $5,000 to cover the cost of energy-efficient retrofits, such as high-performance windows, insulation, and solar panels. An additional $600 is available for required energy audits before and after the upgrades (currently not taking new applicants).


  • Enbridge Gas Rebate Program

    Homeowners connected to Enbridge Gas can access rebates for upgrading to high-efficiency furnaces, water heaters, and other energy-saving appliances. Eligibility may require an energy assessment, and approved upgrades must be completed by qualified contractors. Detailed program guidelines are available on Enbridge’s website.


  • Save on Energy Programs

    The Save on Energy Programs are energy efficiency initiatives offered by the Independent Electricity System Operator (IESO) in Ontario. These programs provide homeowners, businesses with incentives and resources to reduce energy consumption and lower electricity costs. For homeowners, Save on Energy offers rebates for upgrades such as energy-efficient lighting, smart thermostats, and weatherproofing materials. These programs are designed to promote sustainability and decrease utility bills. Homeowners can learn more and apply directly through the Save on Energy website.


  • Green/Cool Roof Incentives

    The Eco-Roof Incentive Program, offered by the City of Toronto, provides financial assistance to homeowners for installing green or cool roofs on residential and commercial properties. The program offers:


    • Up to $2 to $5/m² for a cool roof, with a maximum grant of $50,000.

    • Up to $100/m² for a green roof, with a maximum grant of $100,000.


    Applications can be submitted directly through the City of Toronto’s Eco-Roof Incentive Program.

 

Tax Strategies for Individual Homeowners


To maximize tax benefits, individuals should:


  • Plan Upgrades Strategically: Timing is key. Bundling multiple upgrades into a single tax year can maximize credits and deductions.


  • Leverage Financing: Pair interest-free loans like the Canada Greener Homes Loan with tax credits and grants to reduce upfront costs and enhance cash flow.


  • Maintain Documentation: Keep records of all eligible expenses, including receipts, energy audits, and certifications, to streamline the claims process with the CRA.

 

Navigating Challenges and Compliance


  • Eligibility Requirements: Ensure that the clean energy equipment meets eligibility criteria for tax credits and grants. For example, systems must be certified under Canada’s renewable energy programs.


  • Be Aware of Recapture Rules: If you sell your property after claiming credits or rebates, some benefits may be subject to recapture. Work with a tax advisor to understand potential implications.

 

Long-Term Benefits of Green Energy Investments


  • Higher Resale Value: Energy-efficient homes sell at a premium, offering a competitive edge in the real estate market.


  • Reduced Energy Costs: Green energy systems lower monthly bills, allowing homeowners to enjoy long-term savings.


  • Environmental Impact: Investing in green upgrades helps reduce greenhouse gas emissions and supports Canada’s net-zero goals.

 

For individual homeowners, green energy investments represent a unique opportunity to enhance property value, reduce costs, and contribute to sustainability. With federal and provincial programs offering a mix of grants, tax credits, and rebates, these upgrades are more accessible than ever.


By leveraging these programs, individuals can transform their properties into efficient, eco-friendly homes while reaping substantial financial rewards.


Make your green energy investment today—because a sustainable future starts at home.

 


Want To Learn More? Reach out today and we'll be in touch shortly.

bottom of page