Clean energy and climate funding programs help Canadian businesses and communities reduce emissions and lower energy costs. These programs support projects that build stronger, more reliable infrastructure. However, each funding program covers only certain types of expenses. Getting this wrong is one of the main reasons applications fail. Using the Arctic Energy Fund and other real programs as examples, this guide explains which costs are usually eligible—and which are not.
Most clean energy and climate funding programs pay for capital costs and project-specific work. These must directly reduce greenhouse gas emissions or improve energy reliability. While details vary by program, the following expense categories are commonly eligible.
This is the largest and most consistent category of eligible expenses. Examples include:
The Arctic Energy Fund supports energy and resilience infrastructure in northern and Indigenous communities. This includes clean energy systems that reduce reliance on diesel.
Many programs recognize that projects begin long before construction. Commonly eligible costs include:
For example, the Clean Fuels Fund — Indigenous-Led Projects supports feasibility studies, basic engineering, and detailed front-end engineering for clean fuel production facilities.
Some programs allow labour costs if they are directly related to the funded project. Eligible labour expenses may include:
General administrative salaries are usually not eligible unless clearly justified and approved in advance.
Programs often cover costs needed to make systems operational. This may include:
Climate programs require proof that emissions reductions are real and measurable.
Programs for northern or Indigenous communities often recognize higher project costs. Under the Arctic Energy Fund, eligible expenses may include:
These costs must be project-specific and clearly documented.
GrantHub’s eligibility matcher can help you filter programs by province, community type, and project cost categories quickly.
Even strong clean energy projects can be rejected if budgets include ineligible costs. Common exclusions include:
Always check the program guide before committing funds.
Listing operating costs as capital expenses
Electricity bills, routine maintenance, and fuel costs are rarely eligible.
Starting the project too early
Many programs, including federal climate funds, will not reimburse costs incurred before written approval.
Under-documenting labour and consulting fees
Vague budget lines like “project support” often trigger follow-up questions or rejection.
Assuming all clean energy programs cover the same expenses
Each fund has its own rules. What’s eligible under one program may be excluded under another.
Q: Does the Arctic Energy Fund cover solar and battery projects?
Yes. The Arctic Energy Fund supports clean energy infrastructure that improves energy reliability and reduces diesel dependence in northern communities, including solar and energy storage projects.
Q: Are feasibility studies eligible for clean energy grants?
Often, yes. Programs like the Clean Fuels Fund support feasibility and engineering studies when they are required to advance a clean energy project.
Q: Can businesses apply, or are these programs only for communities?
Eligibility depends on the program. The Arctic Energy Fund is open to eligible Canadian organizations located in Canada, including community and Indigenous entities.
Q: Are clean energy grants taxable in Canada?
In most cases, grant funding is considered taxable income. However, exceptions may apply for some grants or recipients. The Canada Revenue Agency (CRA) states that grants are generally taxable unless specifically exempt. You should confirm the tax treatment with your accountant or review CRA guidance (CRA: Grants and subsidies).
Q: Can I combine multiple clean energy funding programs?
Sometimes. Many programs allow stacking, but total public funding is often capped. Always disclose other funding sources.
GrantHub tracks hundreds of active clean energy and climate grant programs across Canada. Checking which expenses match your project profile can save weeks of guesswork.
Clean energy and climate funding programs can cover a wide range of project costs. These costs must directly support emissions reduction or energy resilience. Before you apply, match every budget line to a specific program rule. GrantHub helps you compare eligible expenses across federal, provincial, and northern programs so you can build a budget that stands up to review.
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