The Australian Government announced the largest expansion of the Instant Asset Write-Off scheme. Here is why your business should invest in solar panels and battery backup now!
As of October 2020, the Federal Government has announced the most comprehensive expansion of the Instant Asset Write-Off scheme, it has increased from $150,000 to UNLIMITED for most business and will run until 30th June 2022. The expansion of the instant asset write-off scheme could be of great benefit to businesses considering installing solar power and/or battery backup system installations.
In October, Australia’s 2020-21 Budget was handed down by federal Treasurer who committed a further $98 billion, on top of the $257 billion that has already been directly pumped into economic support aimed at cushioning the blow of COVID 19 and strengthening the country’s recovery from the pandemic. Amongst the measures aimed at helping to boost Australia’s economy, the most talked about is the move to expand its instant asset write-off tax break incentive for businesses. The federal government will now allow businesses to write off the full value of any assets they purchase prior to June 30th 2022. This budget along with some of the other recent announcements by the federal government creates a perfect opportunity to capitalise on the new generous government incentives and invest in solar and battery power.
It is the largest initiative the Federal Government has ever announced to stimulate the economy and businesses.
The Small-Business instant asset write-off was first introduced in the 2015‑16 Budget, and the threshold was only $30,000 this increased earlier in 2020 to $150,000. More recently it has been upped again in response to the COVID 19 recovery plan to any valuation allowing businesses to immediately fully depreciate eligible asset purchases – including solar and battery power systems and installation. As part of the Economic Stimulus Package, Businesses with a turnover of less than $5 billion will be able to immediately deduct the full cost of eligible depreciable assets, like a commercial solar or battery system, installed by the 30thof June 2022. New solar and energy efficient equipment is included. Replacing or upgrading an existing solar system and retrofitting batteries is also included.
If you have already purchased or are planning to purchase a solar or battery system for your business, you may be eligible to claim an immediate tax deduction. The following tips will assist you getting your instant asset write-off claim correct:
To check eligibility for your business, visit the ATO website
The solar system must be installed before 30 June 2022.
If your solar system is for a mixture of private and business use, you can only claim the percentage of business portion.
Instant Asset Write-off for Commercial Solar Systems – What you need to know:
All businesses and organisations with annual revenue of less than $5 billion are eligible.
Positive Energy Solutions also offers Green Finance payment plans that can be used to the purchase of the solar system and still allow the instant asset write-off to be claimed whether you rent or are the owner of the building.
Because the policy is based on individual assets you could install the multiple solar systems at various locations before 30 June 2022 and still be able to claim all projects as a write-off.
$150,000 Can Easily Pay for 100 Kw of Solar Power
So how does this incentive for small and medium businesses considering solar work?
Based on an average 100 kW system you could expect:
Gross System Value – $150,000
Small Scale Trading Certificate Rebate (STC) + $50,000
Asset Write Off Tax Benefit of Balance (25% company tax rate 2021-22 FY) + $25,000
Net System Value = $75,000
The estimated payback period on 100kW solar system is 1-2 Years.
For a 100kW system, the STC’s (small-scale technology certificates) already provide a big incentive of some $50,000 towards your move to cheaper, renewable energy. With an immediate tax deduction available through the stimulus package, it is possible to reduce your first year cash flow by a further $37,500 for systems purchased by eligible businesses before 30 June 2022.
The purchase of a Positive Energy Solutions Solar and/or battery system in Perth Western Australia and Melbourne Victoria for your business is the perfect way to redirect your cash flow away from paying future Tax Liabilities and ongoing increasing Electricity bills.
Solar A Good Fit For All Small, Medium and Large sized businesses!
With the generous federal government STC incentives, it is not a surprise that the uptake of solar energy continues to increase. Synergy 2021 price rise. As of 30 December 2020, there were over 2.68 million PV installations in Australia, with a combined capacity of over 20 gigawatts.
Join the 1000’s of businesses that are already enjoying the benefits and savings of switching to solar power. Positive Energy Solutions offers businesses in Perth and Melbourne an answer to dramatically reducing your ongoing power bills. Contact us today to discuss solar and battery installation options for your business.
Upload a recent power bill and we will perform a no-obligation site assessment and formal quotation for you to review.
If you have any questions or would like to discuss a residential, commercial, industrial or off grid solar systems throughout Perth, Western Australia or Melbourne, Victoria please contact Positive Energy Solutions on 1300 180 999, www.positiveenergy.com.au or [email protected] and don’t forget to Think Positive!