If you own a business, you don’t need to be told that the world has been turned upside down lately. The combination of bushfires and floods was bad enough, but the additional hit of the COVID-19 virus has been the last straw for too many businesses. Even with the billions of dollars in stimulus from the government, many businesses are doing it very tough!
There is one benefit from this stimulus package however, that will help companies save a significant amount of money, both now and in the future. This is the instant asset write off that ends on December 31st.
Utilising this instant asset write-off opportunity with an investment in commercial solar power and battery storage can be a very wise move for your organisation, even in these troubling times.
How much is the instant asset write-off worth to your business?
Over the past few years, the government has been slowly increasing the maximum value for assets that can be written-off on your tax. With the COVID-19 pandemic however, the government has significantly increased the value of these assets to help stimulate the economy. It’s now sitting at $150,000.
It doesn’t matter whether you own a small office building and just need a 6 kilowatt system or you own a huge warehouse that will take thousands of solar panels. As long as it’s a business purchase, you can write-off up to $150,000 as a deduction on your next tax bill. This means that you need to get in before December 31st to receive the most benefit from this stimulus package, but only if your business has an annual turnover of less than $500 million – but that’s most businesses that are hurting right now in Australia!
You can use this write-off for any assets you purchase for your company before the end of December, but it makes sense to invest your money in technology that will actually save you money, both today and in the future. After all, smart investment is more important today than ever before and reducing your overheads is critical to coming out of this pandemic with enough resources to get back on your feet quickly.
Three more benefits of going solar during the COVID-19 crisis
As if the increase in asset write-offs isn’t enough of an incentive, there are three other benefits to installing a commercial solar system before the end of the financial year.
1. STCs & LGCs; Small Scale Technology Certificates (SCTs) and Large Scale Generation Certificates (LGCs) actually lower the cost of your solar power even further. Systems up to 100 kilowatts can claim STCs and over 100 kilowatts can claim LGCs. However, the SCTs are expected to give a much better ROI than the LGCs, so keeping your install to less than 100 kilowatts will maximise your returns.
2. Backing Business Investment: This is another bite of the cherry from the government’s stimulus package, but it’s slightly different to the instant asset write-off. This difference is that if you make a business investment before the end of the financial year 2021 (regardless of the dollar amount of these investments), you can deduct 50% of these investments from your tax return, applying normal depreciation to the remaining 50% (if your turnover is less than $500 million). This means that you can potentially expand your infrastructure, claim the 50% deduction on your tax return and then install solar and claim it as an asset write-off.
3. Solar farms claim 50% deductions: Under the Backing Business Investment scheme above, you could build your own solar farm or even install more than 100 kilowatts of panels on your commercial property. You can then claim 50% of this investment under the above incentive, depreciating the remaining 50% as previously explained.
Supporting local businesses during COVID-19
Of course, if you leverage this stimulus package, it’s a good idea to support your community by buying local. Cola Solar has served the local Bendigo community for more than ten years and we are experts in commercial solar systems and battery storage options.
We are the oldest and largest solar PV retailer in regional Victoria!
So if you want to cut your energy bills and make the most out of your investments during the COVID-19 pandemic, your best strategic option is to invest in solar energy for your business.
Remember however, that these incentives do have deadlines. So if you leave it too late, you might get bowled over in a last minute rush to secure your future after the COVID-19 lockdown ends and miss out on these investments.
For help selecting the best solar system for your commercial property call Cola Solar on 1300 374 357.