Business Sustainability in a Time of Uncertainty
In this period of uncertainty, many businesses need to save money and resources. Whether your business is currently booming, slowing or hibernating, there are opportunities to cut back on overheads and reduce expenses.
The Federal government recently announced a stimulus package to support businesses. How can the stimulus package help to safeguard your business?
The stimulus package provides either an instant or accelerated asset tax write off:
The first part of the stimulus package includes an instant tax write off for each asset below a $150,000 threshold that you first use or install before the 30th of June 2020. This applies to businesses with a turnover below $500 million.
In the second part of the stimulus package, all assets (regardless of costs) acquired before the 30th of June 2021 will benefit from accelerated depreciation deductions enabling businesses to deduct 50% of the cost upon installation.
How does energy efficiency fit into this?
Energy efficiency products like solar, LEDs and batteries are one of the best ways to reduce your energy consumption and save electricity costs. When you can use less through energy efficient LEDs, make your own clean energy through solar and store it for later use in a battery, your bottom line will thank you!
With assets acquired and installed under the first part of the package, any business can install a 99kW solar PV system (industry average for most large businesses depending on roof size), you can reduce your FY20 tax payable by an estimated $30,000.
Assets acquired and installed under the second part of the package will not be limited by system costs nor company turnover enabling businesses to install much larger systems with a 50% depreciation deduction. For a 250kW solar system, you can reduce your FY21 tax payable by approximately $60,000!
Combine that with additional federal, state and distributor incentives
In addition to all the tax and electricity savings from a new solar/LED/battery installation, you will also be eligible for other federal government incentives for solar (STCs or LGCs) or state government incentives for LED upgrades in VIC and NSW (VEECs or ESCs – which may be abolished in October 2020).
On top of all of that, there are distributor incentives such as Ausgrid’s Power2U where eligible businesses in selected Sydney areas can claim $180 per kW saved for solar and $100 per MW saved for LED installations.
That’s savings of almost $18,000 on a 99kW system, $30,000 from the stimulus package as well as STCs (prices variable based on date of agreement).
We understand not everyone will be in a position to look at solar, LED and/or battery storage but for those actively seeking cost-saving strategies, energy efficiency is an easy and cost-effective choice. Plus, with all these incentives, you can get solar, LED and batteries for the lowest price it has ever been.
Stay safe and we will get through this together.
Ben Wright, Chief Operating Officer, Cherry Energy Solutions