This was put into place by Federal Treasurer Josh Frydenberg by extending the existing scheme for the 2019-2020 budget which now includes companies that have less than $50 million in yearly revenue. In the past, this was only open to businesses that earn less than $10 million each year. Aside from that, the ceiling for the instant tax write-off has also been increased to $30,000 up from $25,000.
Numerous Companies Can Now Write-Off Solar Installations Immediately
Businesses nowadays will be able to claim this instant tax deduction based off the cost of their entire solar asset rather than do it throughout a number of years. This is good news for owners buying solar power and battery storage systems since they can immediately be depreciated as soon as they are purchased.
This scheme first came into practice in the 2015-2017 budget, along with additional extensions ever since. There is also an increase in the maximum write-off level which is one of the best parts of this news. The Treasurer further claims that more than 22,000 companies will now be allowed to take part in the deduction based on the extended threshold.
Purchase of Commercial Solar Systems Increases with Declining Costs
The rapidly declining cost for commercial solar systems has encouraged a wide range of Australian companies to start installing solar panels in their premises. Another incentive pushing this sector is the rising electricity prices which continues to encourage many to make the switch.
It was announced in the Clean Energy Australia Report of 2019 that 45% growth in commercial solar installations were surveyed. Not only had the cost of solar panels started to go down, but the prices on solar batteries declined significantly as well with more to be expected this year.
Tax Deductions for Solar Aids Australian Businesses
With the new instant asset write-off rules, many firms will now be able to purchase a 23 to 30 kW solar system today. This will give them an average output of about 120 kWh per day which is sufficient enough.
Even more good news is that there will be additional help given to companies who are interested in going solar. The Small-Scale Technology Certificates or STCs will be available for firms that install rooftop solar PVs, which will come with a point-of-sale discount upon installation.
Businesses can also benefit from feed-in tariffs (FiTs) wherein the electricity is fed back into the grid, which makes installing solar panels even more tempting for them.
One thing to remember however is that businesses should first consult with a tax professional prior to making a solar purchase decision. This is because they will know if their company can truly be eligible for the instant tax write-off.
Solar panel installation offers so much to businesses today that it’s no wonder commercial PVs are growing in popularity in Australia. With this in mind, we can only expect even more increases in commercial solar installations in the years to come. If you want to speak to our solar energy consultants about how you can use solar power in your business contact us today!
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