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Whilst the Australian government is considering extending their $20,000 instant asset write-off benefit until June 2025, there's no guarantee it'll be approved. Therefore, as this financial year closes (June 30th, 2024), now is the perfect time to benefit from this government program.
The investment of your own solar and battery solutions in your businesses is the perfect way to maximise your current tax year. This creates a straightforward win-win, as it optimises your operational costs, slashes your energy bills, and helps your businesses ESG's (Environmental, Social and Governance) by contributing to a sustainable future and the instant tax write-off, well, that simply makes a Smart Solar and Battery solution even sweeter.
Understanding the $20,000 Instant Asset Write-Off
The $20,000 instant asset write-off is tailored to assist small businesses with an aggregated turnover of less than $10 million. Essentially, it allows this level of business to immediately deduct the full cost of eligible assets (up to $20,000 each) from their taxes, rather than depreciating them over several years.
On 14 May 2024, as part of the 2024–25 Budget, the government proposed extending this scheme by another 12 months, until 30 June 2025. While this extension aims to further ease cash flow challenges and reduce compliance costs for small businesses, it's not yet guaranteed.
Therefore the current certainty is that for the 2023-2024 period, the $20,000 instant asset write-off is crucial for businesses to take advantage of before 30 June 2024 (acting now is essential).
By utilising the write-off, your small businesses can deduct the full cost of eligible assets used or installed ready for use between 1 July 2023 and 30 June 2024 (this financial year). Additionally, the $20,000 threshold applies on a per-asset basis, allowing businesses to instantly write off multiple assets. This creates a compelling incentive to upgrade business assets immediately and benefit from this current tax saving.
Benefits of Investing in Solar and Battery Solutions
Environmental Advantages
Investing in solar and battery solutions goes beyond just reducing your carbon footprint. It positions your business as an environmentally friendly and sustainable operation, appealing to the growing number of consumers who prioritise eco-consciousness with businesses. By adopting renewable energy, your business not only helps combat climate change but also attracts customers who value sustainability, this enhances your brand's reputation and consumer loyalty.
Long-Term Cost Savings on Electricity Bills
Investing in solar and battery systems (Smart Solar and Battery Upgrade) long term will significantly reduce your costs on electricity bills and it's super simple. You generate your own power through your own solar panels, you store this energy (your energy) in your own battery systems and you drastically reduce your reliance on traditional energy sources which lowers your monthly energy expenses. Over time, these savings add up, making the initial investment in solar and battery systems a super smart financial decision for your business.
Moreover, it is certain that energy prices will continue to rise, therefore having your own renewable energy source protects your business from volatile electricity costs, which will contribute to greater financial stability and predictability.
Increased Energy Independence and Resilience
The generation of solar energy and storage of it in your own battery for your business lets you become less reliant on the grid, whilst it enhances your energy security. With your battery storage, you store any excess energy produced during sunny periods for use during peak times or unexpected power outages. This not only maximises the efficiency of your solar investment but also provides a reliable backup power source that minimises operations disruptions. This resilience is especially valuable in areas that are prone to power outages or for businesses that require constant power.
Financial Incentives and Immediate Savings
Offsetting Upfront Costs
The instant asset write-off can significantly reduce the initial financial burden of purchasing the best solar panels and batteries for your business. It occurs by deducting the full cost of these assets immediately, you improve your cash flow and it makes sustainability investments more affordable.
Potential Savings Comparison
A Solar and battery system provides substantial savings compared to traditional energy sources. Over time, the reduction in electricity bills offset the initial investment, leading to long-term financial benefits.
Return on Investment
Investing in solar energy not only provides immediate tax benefits but also offers a strong return on investment through energy savings and any potential government incentives and rebates.
How do you get started started with a Solar and Battery Solution?
Assessing Your Business's Energy Needs
Begin by evaluating your current energy consumption and identifying areas where solar power can make the most impact. This assessment will help determine the size and type of solar and battery system needed.
Choose the Right System
Select a solar and battery system that's fit for purpose for your business's specific needs. This is critical as most solar installers offer a one size fits all prepackaged system, whereas a customised solution always will produce the best results. Consider factors like roof space, energy consumption patterns, and future growth plans. Our Energy Solutions Consultants can help you pick the right system tailored to your business's unique energy needs.
Partnering with Reputable Suppliers and Installers
Choose a solar company with a proven track record in solar, it is essential and it will provide you with a successful installation. A company with a strong reputation, that uses high-quality products, provides you with expert advice, are known for their best in class installation services and after-sales support will position your business's investment in the right hands. Always check online reviews and or case studies to see their past work, this will give you a clear sense of their service quality and provide you peace of mind. Holistically this will ensure you get a system that's built to last and delivers the clean energy and cost-saving benefits you deserve.
Utilising Available Government Incentives and Rebates
Research additional government incentives and rebates that can further reduce the cost of your solar and battery investment. The combination of rebates and instant asset write-off will further maximise your savings.
Conclusion
The $20,000 small businesses instant asset write-off is a powerful tool to leverage your investment in sustainability and reduce operational costs. By taking advantage of this program (before it ends), your business will transition from grid-reliant to a solar and battery-powered business, which will lead to long-term financial and environmental benefits. Do yourself a favour and talk to our energy experts at Smart Energy Answers, as we are a trusted award-winning solar solutions provider and are well-versed to help you start exploring your options before this tax year ends.
