SR&ED for cleantech
Lower emissions, cleaner energy and better efficiency are valuable outcomes.
They are not the CRA's eligibility test.
The SR&ED question begins with the technological limit: what known approaches could not achieve, what the team tested, and what those tests added to the available knowledge.
Follow the performance constraint
- Efficiency, energy-density or emissions work where established approaches could not reach a defined target.
- Material experiments where behaviour under the actual temperature, load or environment could not be predicted.
- Process or system work where scale-up, integration or durability exposed an unresolved technological limit.
- Prototype and pilot tests that compared hypotheses and produced technical conclusions, including negative results.
Environmental value does not decide eligibility
Deploying established technology, engineering to a known specification, standard integration and routine performance testing generally fall outside SR&ED. Separate the experimental work from procurement, construction and commissioning, even when all of it contributes to the same environmental objective.
Record what changed after each prototype
Prototype and pilot results, performance measurements, materials characterization and design changes can show how the investigation moved. Record the target, test conditions and interpretation beside each result so a later reviewer does not have to infer them.
SREDlog organizes approved records by project and connects reviewed costs to the tests that support them.
Frequently asked questions
No. Environmental benefit does not determine eligibility. Review the particular work against the CRA's advancement and systematic-investigation requirements.
Not as a whole. Review any experimental scale-up or integration work separately from routine construction, procurement and commissioning.
Keep the performance target, configuration, test conditions, measurement, result and resulting design decision together. Materials data and design history help explain why the next iteration changed. See documentation requirements.
Trace the constraint through each prototype
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These industry examples are prompts for a fact-specific review, not categories guaranteed to qualify. Work must be conducted in Canada and meet both current CRA requirements; support work must directly support and be commensurate with eligible work. This is general information, not tax advice, and has not been reviewed by an independent qualified tax professional. See our editorial policy.