Tax Relief for Energy Efficiency initiatives

Small businesses with an annual turnover of less than $50M get a bonus tax write-off for the purchase of energy-efficient infrastructure for the current financial year (1 July 2023 – 30 June 2024).

The federal budget included a change to the small business instant asset write-off to allow for energy efficiency and renewable energy initiatives.

The write-off is available for businesses with an annual turnover of less than $50M. The tax deduction will allow for up to $100,000 of total expenditure, with a bonus $20,000 to be deductable for eligible assets supporting electrification and more efficient use of energy, from Saturday, 1 July 2023 until 30 June 2024.

What does this mean?

If you have an annual turnover of less than $50M, the small business asset-write off applies on expenditure of up to $100,000. But if you buy eligible energy efficient assets, you can write that equipment off at 120% up to a maximum bonus of $20,000 deduction per business. So, if you spend $100,000 on eligible equipment your effective deductible amount is $120,000.

The types of projects that are eligible for the deduction are:

• electrifying heating and cooling systems
• upgrading to more efficient fridges and induction cooktops
• installing batteries and heat pumps.

Additional measures

The Budget also included an additional $1 billion allocation to the Clean Energy Finance Corporation (CEFC) to create a Household Energy Upgrades Fund, providing discounted consumer finance to increase sustainability.

The new $2 billion Hydrogen Headstart initiative will provide revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts. This will help bridge the revenue gap between the cost of hydrogen produced from renewables and its market price, with the aim of facilitating one gigawatt of electrolyser capacity by 2030. Successful projects will be some of the biggest green hydrogen projects to be built in Australia.

Energy SQ

If you are in the Goondiwindi, Toowoomba, Western Downs, Southern Downs, Lockyer Valley and Scenic Rim regional council areas, QFF’s free Energy Southern Queensland (EnergySQ) program is available to assist farms to identify energy cost savings opportunities.

For more details or to express your interest, visit the project webpage here or reach out to QFF Project Manager for Energy, Andrew Chamberlain, via phone 07 3837 4729 or email andrew@qff.org.au