Solar incentives for business

Commonwealth Instant Asset Write -Off 

Do you qualify for generous COVID stimulus tax treatments for rooftop solar?;

The Commonwealth Government has introduced an allowance for businesses to invest in plant and equipment that will directly support companies to invest in solar energy assets. Businesses with an annual turnover of up to $500 million are able to immediately deduct several assets as an instant asset write off. This includes new and second hand plant and equipment worth up to $150,000 each.

What has changed under the 2020 budget COVID – 19 stimulus measures? 

Both the eligible business size and the upper threshold of the asset value have significantly increased. The threshold amount for each asset was been raised from $30,000 up to the current $150,000  in April 2020.

The big news is that this program transitioned to a much more generous program from October 6, 2020 to allow for immediate expensing from 6 October until 30 June 2022. Businesses can now claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use.

This extension allows businesses already holding assets under the scheme an additional six months to first use or install eligible assets. This time extension will allow for any delays with meter upgrades or network connection for business solar installations.

Businesses with a turnover of up to $5 billion will be able to immediately deduct the full cost of a new, eligible asset installed or ready for use by 30 June 2022, with no limit on asset value. These measures can help build the case for companies that wish to invest in solar and energy productivity enhancing equipment.

Installing solar PV panels on rooftops for business energy use or a solar battery for energy storage can qualify as an instant asset under this scheme. 

For further information, refer to the Australian Tax Office website

Commonwealth Small Scale Renewable Energy Scheme 

The Federal Government solar rebate scheme for solar systems under 100kW in size is known as the small scale renewable energy scheme.

For each kilowatt of panels you install, a certain number of small-scale technology certificates (or STCs) are generated. Because these STCs are bought by electricity retailers who need them to meet their renewable energy obligations, you receive money for each certificate.

You can expect to sell each STC for about $30. For a 30kW system, this equates to approximately $18000 off the cost of the system. Most prices you’ll see will already have taken into account the STC discount, so unfortunately, you can’t claim an additional $18,000 off the price.

But the good news is, this process is entirely managed by your solar installer, so there’s no need to worry about selling the STCs yourself (though it’s an option if you’d like to do so).

It’s important to note that this scheme is currently being phased out until 2030, so the value of STCs is declining by 7% at the start of each calendar year (January 1st).

Eligibility requirements 

  • Small scale Technology Certificates (STCs)must be created within 12 months of installation
  • The project must use Clean Energy Council approved inverter and solar panels
  • The solar system must have a maximum 100kW DC capacity (nameplate rating of solar panels not inverter)
  • The solar system must adhere to local, state, federal government legislation and Australian standards.

The following projects ARE eligible for STCs if the total system remains under 100kW in capacity:

  • creating additional capacity or upgrading
  • installing an additional separate system, and
  • replacing an additional system

Return to Solar Assessments for Business 

Rate this page

  • Rate as The content was useful0% The content was useful votes
  • Rate as The content was not useful0% The content was not useful votes

Thanks for your feedback. We will use this data to improve the content of this page.

Page last updated: 26 Oct 2021