Install Solar with $150,000 Instant Asset Write-off

Gippsland businesses may see increased benefit from installing solar as part of the Covid-19 stimulus package if installed before June 30, 2020.
— Request a professional consultation with our commercial solar designer

Key Points

Covid-19 stimulus package, Increased the Instant Asset Write Off up to $150,000, 5 times the normal $30,000
HURRY as it Ends Soon, Jun 30, 2020
Applies to businesses with annual turnover up to $500 million
Businesses will benefit from installation immediately with reduced electricity bills
If financing, repayments may be less than savings resulting in positive cashflow from day one
High quality components and warranties, mean no unexpected ongoing costs.
High Return on Investment.

As a part of the Covid-19 Stimulus package, the federal government has announced an increase to the instant asset write-off (IAWO) threshold from $30,000 to $150,000 for businesses and community organisations with an annual turnover of up to $500 million.

The rising cost of electricity in recent years has added significantly to operational costs for many businesses, at the same time, the cost of installing a solar system has declined meaning the most valuable asset you can add to your business right now is a solar system tailored to suit your individual business requirements that uses quality components and is backed by locally supported warranty. With a properly designed solar package your business could experience positive cashflow in the first year and with the ability to instantly write off the asset you will be even further ahead.

To maximise benefits a business will need act immediately as the IAWO will only apply to assets purchased before 30 June 2020.

Here’s an example of how a business may benefit immediately from purchasing a solar package.

John owns ABC Manufacturing Pty Ltd, he engages Rockys Solar to install a 76.8kW Solar System valued at $70,000 at his workshop. Johns Solar System has a Return on Investment of < 2.6 Years and to improve cashflow he has decided to finance the system through On Trac Finance Brokers in Sale at $18,000 per annum repayments over 5 years.

Each year due to reduced electricity purchased from the grid, and credit for excess solar exported to the grid, John is expected to save $22,850 on his electricity bills. This means John’s Solar System reduces his annual electricity bill from $28,000 to just $5,150. After finance repayments, John is ahead by $4,850 in the first year. In addition, John’s business claims 100% of the solar installation cost as an IAWO on his 2019-2020 tax return, reducing his tax bill by $19,250 based on Small Business Company Tax Rate.

This means John is better off by $24,100 in the first year, and in 10 years will have saved approximately $191,200*.

Please note: The information provided above is of a general nature and does not take into account your personal needs and financial circumstances. Nothing constitutes or should be considered to constitute legal, taxation or financial advice. Before making a decision about any of the products or services offered, you should consult with your own independent legal, taxation and financial advisors, who can advise you about your personal circumstances

* Assuming a 3% annual increase in the cost of electricity.