Ireland’s Climate Action Plan targets 80% renewable electricity by 2030, including 5 GW of offshore wind, and hitting those targets means solving real engineering problems in storage, grid integration, hydrogen and offshore structures.
Companies developing these solutions in Ireland can avail themselves of the R&D tax credit. It’s worth up to 35% of your qualifying spend, if you can prove you meet the requirements.
This post explains what counts, what doesn’t, which costs you can include and what Revenue expects to see.
What counts as R&D in renewable energy and CleanTech?
Revenue applies the same test to every sector. Your project has to seek a scientific or technological advance, resolve a scientific or technological uncertainty, and involve systematic, investigative or experimental work to do it. Or, in plain English, you need to be pushing the state of the art and trying to solve technical problems to do that.
Your uncertainty is judged from the point of view of a competent professional in the field of the project. If an expert would have known at the outset how to achieve the result, the project won’t qualify, even if it was new to your company.
In CleanTech, these are the areas where we most often see genuine uncertainty:
- Improving the efficiency or durability of electrolysers, fuel cells or other hydrogen technology in ways the existing literature doesn’t resolve
- Designing foundations, moorings or components for floating offshore wind where loads and materials behaviour can’t be predicted from existing methods
- Developing new solar cell materials or coatings where stability or yield is genuinely uncertain
- Building forecasting or grid-balancing algorithms for variable generation where no known approach works at the scale or speed you need
- Developing heat recovery, carbon capture or district heating systems that depend on solving unproven technical problems
The kind of project that might qualify could be:
A battery storage developer doesn’t know whether a new control algorithm can keep its cells within safe temperature limits during rapid charging. This would be the first of its kind. The company employs experts in control algorithms who are uncertain of how to proceed to meet the target. It builds and tests several versions before one meets the target, and that work can qualify.
However, the same company later installs a proven system for a customer using its finished product. That installation is routine delivery, and it doesn’t qualify.
What doesn’t qualify?
A lot of valuable CleanTech work sits outside the credit. Typical examples include:
- Installing, commissioning or maintaining proven equipment, even at large scale
- Site selection, planning, permitting, grid connection applications and financing
- Feasibility studies that are commercial rather than technical
- Routine engineering design that applies established methods
- Building dashboards or reporting tools with known software methods
- Adapting a product for a new customer or market, without changing the technology materially
The dividing line is usually whether the uncertainty is technological or commercial. Not knowing whether a project will be profitable, permitted or financed isn’t scientific or technological uncertainty.
What could a CleanTech claim be worth?
The calculation of your R&D tax credit claim is easy. For accounting periods beginning before 1 January 2026, the rate is 30%; for periods beginning on or after this date, the rate is 35%.
Company A, a CleanTech developer, has €500,000 of qualifying expenditure on a battery control system in an accounting period running from 1 January to 31 December 2026. At 35%, its credit is €175,000. At the 30% rate, the same spend would be worth €150,000.
Revenue pays the credit in three annual instalments. You can choose to receive it as a cash payment, as an offset against your tax liabilities or as a mix of both. For Company A, that means €87,500, €52,500 and €35,000 over three years. Our guide to the three-instalment payment system shows how it works.
What costs can you include?
Once you’ve identified qualifying activity, you can include the costs directly tied to it:
- Staff costs. Where an employee spends at least 95% of their duties on qualifying R&D, 100% of their emoluments can be treated as qualifying. This applies generally to accounting periods ending on or after 31 December 2026. Otherwise, you’ll need a just and reasonable apportionment of their time.
- Consumables and power. Materials and energy consumed directly in the R&D can qualify, but the saleable output rule matters a great deal for pilot plants (see below).
- Plant and machinery. Test rigs and equipment used in R&D can qualify, and so can building or refurbishing a laboratory used for R&D. See our guide to claiming for buildings, plant and machinery.
- Rent. This qualifies only where the space is integral to the R&D, such as a specialised test facility. An office or a production site usually doesn’t. Our post on claiming R&D tax credits on rent covers the test.
- Subcontractors and universities. Each is capped separately at the greater of:
- 15% of your in-house qualifying R&D expenditure
- €100,000
Indirect overheads such as insurance and travel don’t qualify, even on a project that does. Our guide to what you can’t claim lists the main things to consider.
Finance Bill 2026 announced higher subcontracting limits of 20% or €200,000, but the legislation is still going through the Oireachtas, so the current limits apply to everything you’re preparing today. Our guide to claiming R&D tax credits for subcontracted work explains how the caps work.
What happens when your pilot produces electricity or hydrogen?
If your pilot plant exports electricity, or produces hydrogen that you could sell, Revenue’s saleable product rule applies. Revenue’s guidance says to deduct costs where “it is reasonable to consider that there will be a saleable product”.
This essentially means that if you could reasonably expect, at the time of the R&D, that some of the output would be sold, you deduct the lower of the cost or the net realisable value of that output from the expenditure you claim.
A company runs a 12-month pilot of a new electrolyser stack. Its electricity and water costs are €80,000. Of that, €25,000 relates to hydrogen that was produced and could reasonably be expected to be sold, for a net realisable value of €15,000. The lower figure, €15,000, is deducted, so €65,000 of the consumables spend stays in the claim.
The deduction doesn’t apply in every case. Where genuine scientific uncertainty is still being resolved throughout the trial, it may not be reasonable to consider that a saleable product will result, and the full cost can qualify. Document your reasoning at the time of the R&D, because Revenue will expect to see it. Our guide to consumable materials covers the rule in detail.
What if a project is funded by a grant?
Many CleanTech projects receive State or EU grant aid. Expenditure met directly or indirectly by a grant can’t also qualify for the credit, so track funding by project and by cost from the start. The part of the project you fund yourself can still qualify, provided it meets the R&D conditions. For more detail, see our guide to claiming R&D tax credits on a grant-funded project.
Can you claim if the project didn’t work out?
Yes. Revenue looks at the process, not the outcome. A storage trial that proves a chemistry unworkable, or a pilot that shows a design can’t survive offshore conditions, can still be qualifying R&D if the work was systematic and the uncertainty was genuine. Leave failed projects in your claim, because they’re often the clearest evidence that the answer wasn’t known at the outset.
What does Revenue expect when you claim?
Your documentation needs to show what you were trying to achieve, what the uncertainty was, which approaches you investigated and what you found. A strong technical report explains the investigation, not just the product, and it’s what you’ll rely on if Revenue opens an audit of your claim.
Keep contemporaneous records as you go, such as test logs, design reviews, engineers’ notes and who worked on each project. If you’re claiming for the first time, or haven’t claimed in the previous three years, you’ll also need to send Revenue a pre-filing notification before you submit.
Key takeaways
- Technological uncertainty is the test. Working in renewable energy isn’t enough; the work has to resolve a problem a competent professional couldn’t have solved from existing knowledge.
- Commercial and planning work doesn’t qualify. Permitting, financing, installation and routine design sit outside the credit.
- Pilots can trigger the saleable output rule. Electricity or hydrogen you could sell may reduce your consumables claim.
- Grant-funded costs can’t be claimed twice. Track funding at project and cost level.
- Failed projects can still qualify. Revenue looks at the investigation, not the result.
If you’d like help working out whether your CleanTech projects qualify, get in touch with the Tax Cloud team or try our R&D tax calculator for an early estimate.
