BAKU, Azerbaijan, May 3. Canada’s new Federal Renewable Energy Investment Tax Credit (ITC), presented in 2023, will make the country a world leader in favorable financial conditions for green energy projects, Trend reports via Rystad Energy, independent energy research and business intelligence company from Norway.
"Rystad Energy’s renewable economic modeling shows that these new tax breaks will raise the value of some projects by more than 50 percent over their lifetime, positioning Canada as the second most attractive place for renewable developers, behind only the US," the report said.
As the research explained, the "made in Canada" strategy is part of a growing global trend of policies that prioritize domestic production and manpower, similar to the US Inflation Reduction Act. ITC is a return incentive that offers a percentage of the cost of capital investment - will provide a tax write-off of 30 percent for renewable technologies introduced before 2034.
"Thanks to this reimbursement, a 250-MW project built in Canada will now boast a full lifecycle net present value of $202 million after-tax, up from $131 million before the ITC was announced. This marks a significant rise in value, which is likely to encourage further developments and revitalize some projects that have been sidelined due to unfavorable economics," the company added.
Canada is already a world leader in renewable energy, with 83 percent of its electricity coming from renewable and nuclear sources. Thus, Rystad Energy expects this share to reach 97 percent by 2050, with most of the additional capacity coming from the solar energy project.
