Installing solar panel systems is a profitable deal for Australians especially. To begin with, the country is blessed with an abundance of sunshine and the government has consistently encouraged the adoption of solar power by providing lucrative tax credits and financial incentives.
Embracing solar power will not only enhance your energy efficiency but also result in saving a significant amount on your bills for the long term. You should know how you can save more via major tax credits and financial incentives provided by federal or state governments to make solar systems more affordable and accessible for Australians. It can be made easy with the assistance of solar power companies in Australia.
Significant Tax Credits and Financial Incentives on Solar Installations
Here are some key tax credits and financial incentives for solar panel systems in Australia.
Small-Scale Renewable Energy Scheme (SRES)
Under the SRES Scheme, for installing solar photovoltaic (PV) systems with a capacity of up to 100 kilowatts, eligible individuals and small businesses can create Small-scale Technology Certificates (STCs). These STCs can be sold to electricity retailers or traders to offset the cost of installation.
Eligibility Criteria
- Solar photovoltaic system
- The system should not have more than a 100 kW rating
- The annual electricity output of the solar PV system should not be more than 250 MWh
Research and Development Tax Incentive
The Research and Development (R&D) Tax Incentive for solar panels in Australia is initiated by the Government to promote R&D activities in the field of solar energy specifically. This incentive is basically implemented to accelerate the growth of solar power’s technological advancement and innovations. The purpose of this incentive is to boost the growth of solar energy as one of the leading sources of renewable energy in the country.
Eligibility Criteria
- Activities that are either core R&D activities or supporting R&D activities as defined in the ITAA 1997
- Must be registered as a Research Service Provider (RSP) to conduct your R&D
- Spending of at least $20,000 on eligible R&D
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GST Exemptions
Goods and Services Tax (GST) exemption is one of the ways by the Australian government to reduce financial burdens for adopting solar and drive towards a sustainable future. This exemption aims to encourage citizens to adopt cleaner energy sources by reducing the operational cost directly.
Eligibility Criteria
- Only those living in Australia are applicable
- Electricity should be derived from solar panel system
Electricity Feed-in Tariff
The electricity Feed-in Tariff is a mechanism that allows solar panel owners to send back the excess energy generated by solar panel systems to the grid. The enhanced efficiency of the solar panel will allow you to save more on your bills. According to this incentive, the solar panels act as a revenue generator as you’ll get paid for every kWh you send to the grid. This tariff encourages solar power system owners to produce energy not only to save on their bills but for the energy supplies to the local bodies as well.
Eligibility Criteria
- Solar Panel system must be installed on your premises (home/business)
- Solar PV systems must be connected to the National Energy Market (NEM) Grid
Instant Asset Write-Off
The instant asset write-offs foster small businesses to embrace cleaner sources of energy. As it allows small businesses to recover the cost of solar installations more quickly. Under this financial incentive, businesses can write off their solar panels up to a certain threshold.
Eligibility Criteria
- The solar PV system must be installed on your business premises
Solar Asset Depreciation
Solar panels are considered as an asset of the business. Therefore, solar asset depreciation can be understood as the gradual reduction in the value of the solar panel system over time. The businesses can claim deductions for the solar PV system as an asset of the business. This incentive encourages businesses to adopt solar power more conveniently and recover the initial investment gradually.
Eligibility Criteria
- The solar PV system must be installed on your business premises
Green Building Certificate
A green building certificate is a process to verify that the building was designed in a way that enhances energy efficiency and reduces harmful environmental effects. In Australia NABERS rating is considered as a benchmark for deciding the environmental performance of the buildings. Solar installations can help in qualifying these certifications and getting tax exemptions from certain trusts and agencies.
Eligibility Criteria
- The solar PV system must be installed in your building
Access All Tax Benefits Under Professional Guidance!
The Government of Australia offers various financial incentives and tax credits to promote the greater adoption of solar energy. It is essential to stay up-to-date with all the solar rebates available in your region. Consulting with professional solar installers in Perth is crucial for the proper installation of the system. They can also manage to consult with a tax professional so you can get the maximum advantage of the available credits.