Key benefits for renewable energy for small businesses
We already know that going green is good for the environment, but is renewable energy good for business too? In Australia, it definitely can be. Small businesses benefit from renewable energy investment by becoming eligible for tax breaks and rebates, making it a financially sound idea, as well as a good PR exercise.
As the end of the financial year arrives, it's important you know how you can claim for your renewable energy investments and what you stand to gain.
1. Save with instant asset write-off
Since 2015 the Australian government has allowed small businesses with an annual turnover of less than $10 million to write-off purchases. The limit has just been increased from April 2nd 2019 to $30,000 as a tax benefit arising from the depreciation of equipment. In renewable energy terms, this could mean you claim back on solar panel or battery installation, for example.
As the name implies, you can claim the costs immediately. If you think you might be eligible, consult your accountant for further information about claiming.
2. Claim back with the small-scale renewable energy scheme
Solar, wind or hydro energy as well as eligible hot water systems now come with Small-scale Technology Certificates (STCs) that the owner can exchange for cash, or sell on directly. Each supplier works with a third-party to manage this process, and so certificate prices are calculated differently. It's worth checking the value of your certificates at the point of purchase, and be aware it may take some time to process.
STCs are only valid systems with an output of less than 100 kW. The Large-Scale Technology Certificate scheme may be appropriate if you have the capacity for a bigger system.
3. Use renewable energy to benefit from feed-in tariffs
By generating your own energy, not only do you benefit from lower prices per kWh on energy you actually consume, you can get a return on excess energy that you feed back into the national grid. The government set a per kWh rate, but the amount also varies according to each energy provider and state.
You may receive an energy credit, as opposed to cash, and just how much you save depends on the size of the unit you own, and how much energy you generate.
4. Increasing your savings with a clean energy finance solution
The sooner you're able to start generating your own renewable energy, the sooner you start saving. However, if finding the funds required for your initial investment is tricky, consider a clean energy finance solution.
The instant asset write off scheme is running until June 2019 and proposed to continue into 2020.
For more information