SR&ED in energy and utilities
Storage, smart grids, conversion efficiency, capture, hydrogen: the energy sector does its R&D in real conditions, with long projects and expensive failures. SR&ED is the only programme that also funds the paths that did not work out.
- Storage, conversion and energy efficiency
- Smart grids and demand management
- Test benches and field pilot projects
SR&ED applied to the energy sector
SR&ED is Canada's federal R&D tax credit. A Canadian-controlled private corporation recovers up to 35 % of its qualifying expenditures as a refundable cash payment, on a base of up to $6M per year; in Québec, the CRIC adds 30 % on the first $1M. Energy is also the most heavily subsidised sector in the country — which makes stacking, and the order in which the various forms of assistance are applied, more decisive here than anywhere else.
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The field pilot, between R&D and operations
A pilot installation usually produces energy that is sold. That does not disqualify it, but it requires separating the experimental portion from the commercial one and dealing with the revenue earned during testing. This is the technical point that decides the claim.
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Government assistance is subtracted before the credit
A grant, a repayable contribution or a provincial programme reduces qualifying expenditures before the credit is computed. Stacking remains worthwhile, but a claim that ignores this overstates the amount and invites a review.
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Multi-year projects lose their history
A test programme running over four years crosses several teams and several fiscal years. Without documentation carried forward year after year, the earliest work — often the most uncertain, therefore the most clearly qualifying — becomes impossible to defend.
Examples of eligible projects
Work that commonly qualifies among our clients in this sector. This list illustrates; it does not enumerate. A project absent from it is not a project excluded.
Commonly qualifying in this domain
- Developing a storage system or a battery management system
- Improving conversion efficiency or heat recovery
- Forecasting and demand-management algorithms for the grid
- Hydrogen production or storage processes
- Capture, valorisation or treatment of emissions
- Custom-built instrumentation and test benches
The sector trap: claiming the installation of commercial equipment. Deploying a proven technology at a new site — even at scale, even for the first time in the company — is engineering. What qualifies is what had to be invented because the site imposed a constraint the equipment was not designed for.
Frequently asked questions
Yes, provided the experimental portion is isolated. A pilot almost always has two sides: the trials run to resolve a technological uncertainty, which qualify, and the commercial operation of the installation, which does not. The claim has to reflect that split, and revenue earned from the installation during the test phase has its own treatment.
Yes, and it is the norm in this sector. Government assistance received reduces qualifying expenditures before the credit is computed, so the same dollar is not funded twice — but the combination is almost always better than either alone. The order of the calculation changes the final amount: it is planned, not observed after the fact.
Not as a capital asset: durable equipment was removed from federal qualifying expenditures. What is claimable is material consumed or destroyed during the work — test coupons, raw materials for a trial, components of a prototype that did not survive — along with salaries and contracted R&D. Some provincial regimes treat equipment differently.
Each fiscal year is claimed separately, and the project does not need to be finished. A four-year test programme gives rise to four claims, each covering that year’s work and the uncertainty that remained at that point. An unclaimed year can sometimes be recovered within the statutory window, but that window is strict.
Hubvention is a Canadian firm specialised in public funding: SR&ED, CRIC, NRC IRAP and sector grants. In energy, most of the value sits at the junction between grants and tax credits — we handle both, which lets us sequence the applications rather than simply stack them.