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Instant asset write-off for commercial solar

Jay Dean
11 June 2021
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Instantly write off your solar investment.

If your business is currently considering installing solar to reduce your operating costs, the Federal Government’s increased Instant Asset Write-Off means there’s never been a better time to do it. From the 12th of March 2020, any business purchasing an asset of up to $150,000 could immediately write off 100% of the cost of that asset. This has now increased with no limit to the asset invoice amount, so it’s big news. And using the Write-Off to go solar is unquestionably a smart business move.

You will need to act quickly though, as the Government has only made it available until 30th of June 2023.

As I watched, I began recollecting a recent conversation I had with a potential client, who, truth be told, wasn’t blown away by the appeal of more sustainable power consumption. I remember that at the end of that conversion, the only thing he was interested in was how much money he could save – “I’ll be honest with you, I’m only interested in the cost-saving potential of solar systems. Tell me how much I can save and let’s see how we can take this conversation forward.”

The truth is that many people don’t have the time to think about the future when they’re struggling today. That’s why my pitches always highlight the cost-saving potential of renewable power.

An important part of the process of converting clients to green energy these days is network tariff optimisation. Given that the last few weeks have involved plenty of conversation on my end on this front, I thought it might be useful to examine some of the finer elements of network tariff optimisation.

This is especially important as the Australian Energy Regulator lays down their final regulatory proposal on Friday, 5th June 2020, which will include changes to cost components like peak and off-peak windows, tariff classes and structures and more.

How could your business benefit?

With the ability to write off your solar system instantly, you could reach a return on investment in as little as three years and continue saving up to $23,000 per year for the rest of the system’s lifetime. This would leave you with a potential 10 year saving of more than $170,000. You’ll also be able to relax, knowing that you have a 12 year warranty on your inverter as well as 25 year warranty on panel performance.

Example scenario.

The best way to illustrate the savings is with an example. Imagine your company purchases a new 100kW solar system and power factor unit from Energy Partners. You instantly write off the entire system using the Government’s $150,000 Instant Asset Write-Off. Your company then receives a GST Refund ($10,000), and Tax Depreciation ($27,500) and you reach a return on investment in three years. You also have ongoing secured energy savings of up to $23,000 per year for the system’s lifetime. As a result, the system will produce first year net savings of $60,500 and 10 year net savings of up to $290,000. The numbers really do speak for themselves.

Why is solar the best way to use the Write-Off?

Simply enter the cost of your solar system as an expense in the Business and Professional Items schedule on your tax return, up to the value of $150,000. If, for example, the full amount is claimed, this will write off the full cost of the system in the year it is installed.

Why choose Energy Partners?

You should choose us, because when it comes to solar, we’re the business. As Brisbane’s number one commercial solar company, you know you can trust us with all your solar needs, and more. From installs to tariff optimisation, we have the expertise to guide you, with straight forward advice and decent prices.

We use only professional-quality components and we have the highest standards of installation. We don’t outsource work, but use a dedicated team of engineers, designers and installers.

We’ll break your reliance on the grid, save you money and save you hassle.

We’re happy to answer any questions you have about the Instant Asset Write-off scheme, so call us on 1300 768 977 now or click the button below.

*The information contained in this article and the links provided are for general information only and should not be taken as constituting financial or tax advice.

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