SR&ED in the Renewable Energy Industry

Eligible sub-sectors in the renewable energy industry include:

• wind
• solar
• geothermal
• biomass
• hydropower.

It's no secret that the renewable energy industry is constantly growing and becoming becoming a more popular alternative to traditional energy sources (petroleum, nuclear power, coal, etc). Many companies are realizing the potential for developing technologies to harness renewable energy sources, and as a result we have seen a jump in how much of our electricity generation has been from renewable energy sources. In fact, since the early 90's, the percentage of Canada's energy generation that comes from renewable energy sources has grown annually at an average rate of 12%.

In 2004 alone, 4.4% ($44 billion) of Canada's GDP was related to the renewable energy industry, and this number is still growing.

As a growing industry, there are still many things we need to learn about how to most efficiently harness renewable energy: what components and materials work best; how to best adapt the technology for Canadian weather conditions; how to best store the energy, etc. In any and all of these situations, there are going to be technological obstacles that you are faced with which qualify for the Scientific Research and Experimental Development (SR&ED) program. While there is currently much funding available for those working in the renewable energy industry, the SR&ED program shouldn't be overlooked.

With the influx of government funding (at all levels) into renewable energy sectors, little attention has been paid to the SR&ED program. However, as this funding is spent, companies need to increasingly monitor their spending to ensure that maximum SR&ED credits are recaptured. As many companies will be affected by reductions in the feed-in tariffs offered by the FIT and MicroFIT programs, SR&ED tax credits can help to offset some of these lost revenues.

Part of the challenge will be to file for SR&ED claims within the 18-month timeframe; if this timeframe is missed, then the SR&ED credits are forever lost – don't wait until it is too late, contact the experts at NorthBridge today for your free consultation.