Secure energy savings and tax savings with the $20,000 instant asset write-off for solar

As part of the Federal Government's 23-24 Budget, the Australian Government has announced changes to the asset write-off.

Before this announcement, the threshold on eligible small business asset purchases was due to drop back to the $1,000 threshold on 1 July 2023, but the budget has proposed instead to increase the rate to $20,000, in a 12-month extension to June 30 next year (2024).

While the measure is not yet law, if it is legislated, the asset write-off provides a way for businesses to lower their taxable income and invest in assets that help with their business operations.

When applied to business solar specifically, this tax break offers small businesses the unique opportunity to invest in an asset that manages costs through periods of uncertainty and beyond.

Highlights of claiming business solar as part of the asset write-off:

  • Small businesses with a turnover of up to $10 million can invest in a solar system up to $20,000 and receive a full tax deduction
  • Eligible assets must first be used or installed ready for use between 1 July 2023 and 30 June 2024.
  • The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

    Make the switch without reducing your cashflow

    In the current climate you may feel less willing to invest in solar - don't worry, we believe the way forward is financing solar systems, so that the system is paid for with little to no upfront investment.

    This is achieved through third-party clean energy financing, acquisition of government solar rebates, and leveraging the asset write-off.

    We'll put together a solar solution where the savings your solar system generates is more than the finance repayments, so your business solar will have a return on investment as soon as possible.

    Before After Solar Bill

    Frequently Asked Questions: Business solar tax deductions

    Are solar panels tax deductible for businesses?

    Solar panels can be depreciated like other new business assets. This also applies if you don't own the building.

    If you are an eligible small business and your total purchase is $20,000 or less, your purchase could be deducted through the asset tax write-off.

    Is my business eligible for the tax deduction for solar?

    Small businesses, with aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024.

    What assets are not eligible?

    Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.

    Can I write off multiple assets?

    The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

    What solar businesses rebates are available?

    STC and LGC rebates are the key federal rebates available for businesses. Other state based incentives do exist. When you work with Choice Energy we can work with you to identify what's available for you. Learn more

    Can I claim solar panels as a business expense?

    Most solar systems aren't rented or leased so can't be expensed, but assuming you are eligible small business, they will be eligible for depreciation or the instant asset write-off if the purchase is $20,000 or less.

    Are solar batteries tax deductible?

    Solar batteries are tax deductible like other business assets. Work with Choice Energy to identify if making the switch to business solar & battery storage can lower your energy costs. Contact us now.

    Are solar panels tax deductible for landlords?

    If the landlord has paid and installed the solar system themselves, they are eligible to deduct the cost of a solar system.

    Tenants' solar systems can't be deducted by the landlord.

    How does depreciation work for solar panels?

    As a capital asset, solar depreciates over time, and if eligible, your business can write-off the cost of the asset over a determined period of time, set by the Australian Tax Office.

    The effective life for a solar system is 20 years. "The effective life is used to work out the asset's decline in value (or depreciation) for which an income tax deduction can be claimed."

    Businesses can choose to depreciate their investment in solar via the Diminishing Value Rate (10%) or Prime Cost Rate (5%).

    Businesses should consult a financial expert to determine what makes most financial sense for them.

    The Choice Energy difference

    Choice Energy is an energy firm dedicated to helping businesses by reducing their operational costs optimising their energy charges through a range of solutions and services.

    As a champion for Australian business, we create bespoke solar solutions with a focus on reducing your energy costs with minimal to no impact on cash flow.

    For more information, please visit

    NOTE: The information provided on this website is general in nature only and does not constitute personal or commercial financial or taxation advice. The information has been prepared based on our interpretation of the IAWO program and has not taken into consideration your personal or business objectives, financial situations or needs. Before acting on any information on this website, or others, you should consider the appropriateness of the information with regard to your personal or business objectives, financial situations or needs. Speak to your Accountant, Tax Advisor or the Australian Tax Office for any questions you may have with regard to the application of the Instant Asset Write Off for your business.

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