Australia’s small and medium-sized businesses (SMEs) will get a tax break of up to $20,000 for making investments like installing solar panels, batteries and heat pumps, and electrifying their heating and cooling systems under a new policy announced ahead of the release of the Federal Budget later this month.
Treasurer Jim Chalmers announced the Small Business Energy Incentive at the weekend, saying up to 3.8 million SMEs would benefit from the tax cuts for small businesses that invest in electrification and energy efficiency.
Under the budget policy, businesses with turnover of up to $50 million would be entitled to a bonus 20% tax deduction on solar panels, batteries and other electrical devices when they invest up to $100,000 to swap out fossil fuel energy and technology.
The maximum bonus tax deduction is $20,000 per business, with the initiative expected to cost $314 million over the forward estimates for the next four years.
Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.
Rewiring Australia co-founder and chief scientist Dr Saul Griffith welcomed the initiative, saying the scheme would help accelerate electrification among Australia’s SMEs and lock in years of benefit for those who seized the opportunity.
Griffith said swapping out fossil-fuelled devices and energy sources for renewable-backed electrification is the fastest, most cost-effective way to decarbonise our domestic economy but will also “permanently lower the cost of business.”
“It embeds thousands of dollars’ worth of annual savings into the annual operations of small businesses, savings that accrue over the long term,” he said.
“Once a business has switched to solar-backed electrification, they never look back.”
Griffith said switching to rooftop solar and electric devices also gives businesses certainty.
“They know their operating costs won’t suddenly surge due to something beyond their control,” he said.
The Federal Budget is due to be delivered on 9 May, 2023.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: firstname.lastname@example.org.
This blog is an amazing source of information and I’m so glad I found it!
I’m so impressed by the level of detail and research that goes into each post on this blog.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.