Canada: Government Announces More Support for Geothermal Energy Industry

Federal Budget 2017 — A Focus on Innovation and Tax Fairness for the Middle Class (Lexology)

Clean Energy Generation Equipment: Geothermal Energy

The Canadian Budget 2017 proposes three changes to the capital cost allowance (CCA) regime in respect of geothermal energy equipment:

• Eligible geothermal energy equipment under Classes 43.1 and 43.2 will be expanded to include geothermal equipment that is used primarily for the purpose of generating heat or a combination of heat and electricity. Eligible costs will include the cost of completing a geothermal well and, for systems that produce electricity, the cost of related electricity transmission equipment. Equipment used for the purpose of heating a swimming pool will not be eligible.
• Geothermal heating will be made an eligible thermal energy source for use in a district energy system.
• Expenses incurred for the purpose of determining the extent and quality of a geothermal resource and the cost of all geothermal drilling, for both electricity and heating projects, will qualify as a Canadian renewable and conservation expense.

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