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Your Guide to Commercial Solar Rebates
As a business in the market for solar you have probably heard all about the government rebates offered to residential systems, but most likely less so on the incentives offered to commercial installations. While yes for smaller-scale or home focussed solar systems there is often a greater amount of government help available, though this is not to say that if you are a business looking to install solar that you are out of luck. There are still a number of rebates aimed at renewable energy transition for Australian business that can be of considerable help in offsetting the initial amount your organisation is out of pocket.
There are two main schemes aimed at helping businesses to install solar power. The first is the Federal Commercial Solar Rebate - a financial incentive offsetting the initial cost of a system. The second is the Solar Asset Write-Off for Business - providing tax benefits to companies who choose to install clean energy solutions.
Key Takeaways:
Commercial Solar Incentives Exist: While residential solar systems often get more attention, there are substantial government rebates for businesses looking to install solar. The Federal Commercial Solar Rebate can significantly offset initial costs, offering up to $50,000 based on system size.
Eligibility Matters: To qualify for the Federal Commercial Solar Rebate, businesses must install systems under 100kW and use accredited installers with approved equipment. This ensures safety and quality while maximizing your investment.
Tax Benefits with Solar Asset Write-Off: The Solar Asset Write-Off allows businesses to immediately deduct the cost of eligible solar components from their taxable income, providing quick financial relief and encouraging renewable energy adoption.
Long-Term Benefits: Installing solar not only reduces upfront costs but also leads to long-term savings on electricity bills, boosts your company’s green credentials, and enhances energy independence, making it a smart choice for businesses.
The Federal Commercial Solar Rebate
The Federal Commercial Solar Rebate is a financial incentive provided to businesses installing solar power or other renewable energy solutions. This acts as a discount allowing businesses to experience the benefits of solar in their operations and daily running while reducing the out of pocket expense.
What is the Rebate?
A considerable financial incentive is being offered to businesses looking to invest in renewable energy. It features a discount used to reduce the upfront price of installing a commercial solar system. The value of this rebate is up to $50,000 depending on the size of the proposed system.
There are some other conditions to consider; the amount of financial help you receive is largely dependent on the size of your solar system. This rebate is only applicable to PV installations under 100kW, although that being said the larger the system the greater the financial incentive you will receive. Those systems that are closer to the 100kW cap are also likely to receive a sum that is closer to the $50,000 maximum.
This rebate has been designed to cover a large portion of the cost of installing a solar system allowing small-scale businesses to install clean energy solutions whilst still maintaining the budget.
What is the Aim of This Incentive?
The overarching goal of this project is to make solar power more accessible and affordable for Australian small businesses. The financial assistance in installing a PV system reduces the upfront costs, allows for long-term savings and of course provides environmental benefits that are both good for our communities and portray business values in a positive light.
Eligibility Criteria
In order to receive financial assistance for solar power there are a few requirements that must be met:
Business size: this rebate has been designed for and is predominantly aimed at small businesses, although that’s not to say that this incentive isn’t beneficial to larger businesses looking to install a solar system under the 100kW cap.
Accredited installation team & solar retailer: in Australia we have high standards for home safety and electrical work. In order to avoid any hazards or risk of future electrical concerns the solar system must be installed by an accredited installer. This ensures that the system meets our regulations around safety and quality, maximising your investment and improving longevity.
Approved equipment: the PV modules, inverters and any other components installed as part of the system must be listed on the Clean Energy Council’s (CEC) approved product list. Being featured on this list ensures that the product meets a high standard in both safety and performance.
Some Things to Consider
The Size of Your Proposed System:
The size of the financial incentive you receive is proportional to the size of the system you install. Those with larger systems close to the 100kW maximum are likely to receive the $50,000 maximum incentive as well.
If feasible for your business, it may be a good idea to install a larger system for greater cost reductions and long-term generation. That being said the aim is always to install a system that meets yours or your organisations personal needs rather than installing as much solar as possible.
The Origin of the Panels Being Installed:
Within this scheme the government gives preference to panels and solar products manufactured on our own shores, helping to support local business and production. This is in an attempt to boost our domestic solar industry, further improving the accessibility of renewable energy for Australians.
How Do I Claim This Rebate?
In order to receive the benefits you first must apply for the subsidy. Luckily with a reputable and trusted solar retailer the vast majority of this is taken care of for you! Here is the process of application;
Assessment & Design: first it’s important to assess the energy needs of your business, this can be done with your chosen installation company who will help walk you through these figures and design the perfect size system for you.
Choose Your Solar Installer: it's important to ensure that your chosen retailer is accredited with the CEC and has all the necessary documentation in order for you to be able to apply for and receive the rebate.
Panel Installation: Once the new system has been installed, your solar retailer will address and complete all of the required paperwork and ensure that all approvals are in place.
Rebate Application: your installer will apply for this rebate on your behalf, once this has been finalised the amount will be deducted from the final payment made.
Benefits of the Commercial Solar Rebate
There are a number of ways in which your business will benefit from clean energy and lower electricity costs.
Lower Initial Payment:
The discount offered by this rebate significantly reduces the upfront investment made when installing a new soar system, making clean energy a more achievable option for a lot of businesses.
Lower Costs Long-Term:
For a lot of organisations the operations and daily running can come with high energy consumption, by installing solar businesses can save thousands each year.
Positive Environmental Impact:
Installing solar reduces the overall carbon footprint of business operations, making a positive impact on the environment. Additionally engaging in more environmentally friendly practices enhances company image, drawing more customers who prioritise sustainability in their purchases.
Energy Independence:
Managing and producing your own electricity can be extremely beneficial to business practices, continue working through power outages and avoid spikes in energy prices that cause a variation in recurring costs.
Solar Asset Write-Off For Business
The second government scheme aimed at encouraging commercial solar income is the Solar Asset Write-Off. A tax incentive offered by the government, this scheme allows businesses to immediately deduct the cost of eligible components and products from their taxable income. This essentially means that Australian businesses are able to claim the full tax deduction in the same financial year as the installation, providing immediate financial benefit.
Eligibility Criteria
In order to claim this tax benefit your business must first meet the following requirements:
Asset Value: there may be a limit imposed as to the value of the assets being claimed under this scheme, it’s important to review the government's guidelines throughout the installation process.
Business Turnover: In order to be eligible for this incentive the business’s aggregated annual turnover must not exceed $10 million.
Date of Purchase & Installation: for these schemes the purchase of the system must be within a specific time frame, it's important to be aware of these dates when budgeting purchasing costs and planning your installation.
Use for Business Purposes: the assets claimed under this scheme must be installed and primarily used for business purposes like powering commercial premises or operations, this is especially important when it comes to a solar system.
It is vital that throughout this process and as you consider solar power for your business, you stay up to date with all the eligibility criteria in case any changes are made, ensuring you’re not caught off guard.
Benefits of Claiming the Instant Asset Write-Off
Tax Benefit Upfront
Claiming the asset write-off considerably speeds up the depreciation process and allows the business to receive a significant tax benefit almost immediately. This plays a role in offsetting the purchase price, improving cash flow and reducing the payback period of the system.
Long-Term Savings
One of the main aims of this incentive is to help businesses to see considerable cost savings through reduced electricity bills. With the ability to generate clean energy on the premises your reliance on the grid is significantly reduced, avoiding surging energy prices.
Environmental Management
Installing solar power demonstrates a business’s commitment to a sustainable future, reducing greenhouse gas emissions as well as improving the environmental reputation of the business, attracting more climate conscious customers.
Combining all of these factors together leads to a fantastic return on investment (ROI) in the future as well as improve recurring costs and company image in the public eye.
To Sum It All Up
Although the focus of government rebates and incentives for solar power are sometimes more focussed on residential installations there are still great options for businesses to offset costs and reduce the financial impact when investing in solar. If you’re interested in installing a solar power system for your business, speak to the 1KOMMA5° team, they can help talk you through the available rebates, the wider installation process and other important details.
FAQ
Frequently Asked Questions about Installing Solar Power
There are great government rebates/incentives still in place for eligible households. Basically, the larger the panel array, the more STCs your solar system generates as it is based on the expected output of the system over time.
When you buy a solar system, the purchase price is normally reduced by the value of the STCs created by your system. You simply fill out a form on the day of installation to confirm that the system has been installed, and that’s it. There is no additional paperwork that you need to do.
Small-scale Technology Certificates (STCs)
Small-scale Technology Certificates (STC’s) – previously known as Renewable Energy Certificates or RECS – are created when a Renewable Energy System such as a Solar PV system is installed.
The number of STC’s depends on the predicted amount of energy generated and hence the larger the system the greater the rebate. In essence, one STC is created for every megawatt-hour of production capacity of the system.
This is further multiplied by the number of years the system is likely to generate energy (for home solar systems, this is usually 15 years, although the life of the solar panels themselves is considerably more than that).
This incentive program is being phased out until 2030, so each year the number of certificates your system is eligible for reduces.
STC Price
The system for trading and pricing STCs for small systems is managed by the Small-scale Renewable Energy Scheme (SRES).
STCs are bought by Liable Parties (usually electricity retailers) and must be surrendered at the end of each quarter. As the number of STCs that are required to be surrendered is a fixed amount each year, but the number of STCs created is variable, the price paid for STCs also varies and is determined by supply and demand.
The Federal Government legislated in 2010 a fixed price for STCs by implementing a Clearing House system where STCs can be bought and sold for $40. However, there is no requirement for Liable Parties to purchase from the Clearing House, so they are likely to only do so if there is a shortage of STCs or the market price exceeds $40. There is currently a surplus of STCs in the market which means the market price of STC’s below $40
The Feed In Tariff is only something you need to worry about if you don’t have battery storage.
The price your chosen energy retailer pays for any excess electricity generated from your solar panels is recorded as a credit on your power bill.
In NSW, solar power is fed into your home as it is generated and your household will use it first before you draw power from the grid.
This means that for every kWh of solar power used in the home you are directly saving money you’d spend on your power bill. This reduction in your power bill is the main financial benefit of solar power.
Everything else will be bought up at an agreed rate by your electricity retailer.
At the moment, most feed-in tariffs are between 5 and 10 cents per kWh, with many being about 7 cents. They bounce up and down a lot, for example in previous years they have been up over 20 cents per kWh. Typically, they are always at least 5 cents per kWh.
Once you sign up for a 1KOMMA5° Installation, we immediately submit your grid application to the relevant energy distributor. For systems up to 5kWs, this is a formality. For larger systems it can take a few days or more. Once we receive approval, your installation will be managed by our installation coordinator, who will welcome you to 1KOMMA5° and book an installation date for you. This is generally booked within around two weeks and installation dates are available Monday to Friday, weather permitting.
We endeavour to have your system installed within 2-4 weeks unless you request us to hold for whatever reason. Due to our strict safety policy, we do not install solar systems when it rains. In the event of inclement weather, we will rebook your installation as soon as possible. We always work with your requests as we strongly recommend that someone be home on the day of installation.
Green Loans can be an affordable way to pay for your solar power system and is only available for approved products. As a Clean Energy Council Accredited installer, all our systems qualify.
Green Loans can be used to finance 1KOMMA5° systems from $1,000 to $30,000 over a 2-7 year term. Once you have received a referral from 1KOMMA5°, online approval usually occurs within 1-2 business days. Green Loans have a competitive fixed interest rate that is as low as 7.99% p.a.* | Comparison rate 9.21% p.a.^ Establishment fee of $299 added to the loan amount. $2.70 per week account keeping fee included in repayments.
To be eligible to apply you must:
Be over 18 years old and an Australian resident or citizen
Own or be purchasing a home
Be employed, self-employed, a self-funded retiree; or is receiving the Government Age Pension
Have an Australian driver’s license or Passport
Provide two most recent payslips or 90 days of bank statements
There are a number of good, competitive Green Loan providers – ask us about the options available.
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