Instant Asset Write-off For Commercial Solar Boosted

Commercial solar instant asset writeoff

Image: samfabersf

The extension and expansion of Australia’s instant asset write-off scheme could be of significant benefit to businesses considering installing solar power.

The scheme enables businesses to immediately fully depreciate eligible asset purchases – including solar power systems1.

First introduced in the 2015‑16 Budget, the instant asset write-off has been extended several times and was also to be lifted in February this year from $20,000 to $25,000. However, in the recent Budget, that threshold was upped again to $30,000.

As well as boosting the limit and extending the scheme to June 30, 2020, firms with revenue of up to $50 million annually also now have access to the scheme. Previously, revenue could be up to $10 million.

The Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 passed both Houses last Thursday and the new $30,000 level is applicable to purchases made after Budget night (April 2).  The $25,000 limit is applicable to purchases made prior to April 2.

Commercial Solar A No-Brainer For Business

The cost of commercial solar power systems has continued to drop – currently around $1,000 – $1,300 per kilowatt capacity for a good quality system competently installed, including the reduction resulting from Australia’s major solar subsidy. This means that under the expanded instant asset write-off, a system of between 23kW and 30kW capacity could be installed.

Based on a 30kW system, output should be around 120kWh a day on average2, or around 43,800 kWh a year – 43.8 megawatt-hours. While solar feed in tariffs can be low in some regions, the electricity generated would be produced during the hours many businesses are operating and consumed on-site. Another potential benefit is reduction in demand charges, which are based on the peak power3 drawn from the grid. Added to this is a significant carbon footprint reduction, an issue that is becoming more pressing in the business world.

These days, a commercial scale PV system in the 10-100kW range can achieve payback in as little as 4 years.

Important: Before making a solar purchase decision or signing any contract, businesses should consult with a tax professional to determine if they are eligible for the instant tax write-off.

With so much to offer businesses, it’s little wonder the popularity of commercial PV in Australia is continuing to grow. According to the Clean Energy Council, there was a 45 per cent increase in commercial solar installations throughout 2018.


  1. According to the ATO, a solar power system would usually be written off over a period of 20 years.
  2. Conservative estimate – will vary with installation specifics.
  3. Learn about the difference between power and energy.
About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

Speak Your Mind