Energy costs in Australia are rising, and businesses are feeling the pressure. Switching to solar isn’t just an environmental decision—it’s a financial one. In 2025, businesses can take advantage of significant tax incentives to offset the cost of solar installation, reduce their energy bills, and improve long-term profitability.
With federal tax breaks, instant asset write-offs, and state-based incentives, now is the time to act. This guide breaks down the key tax benefits available in 2025, how they apply to your business, and how you can maximise your savings by making the switch to solar.
Key tax benefits available in 2025
Switching to solar isn’t only good for the environment—it’s a smart financial move for businesses today. Here’s how you can reduce your tax bill while cutting energy costs in 2025.
Instant asset write-off
If your business installs solar panels, you may be able to write off the full cost immediately rather than depreciating it over several years. The Instant Asset Write-Off scheme allows eligible businesses to claim the cost of assets up to a certain threshold in the same financial year. This year, check the updated cap and eligibility rules to maximise your claim.
The Australian Government has extended the Instant Asset Write-Off threshold to $20,000 for small businesses with an aggregated turnover of less than $10 million. This extension applies to eligible assets, including solar installations, that are first used or installed and ready for use between 1 July 2023 and 30 June 2025. Under this scheme, businesses can immediately deduct the full cost of qualifying assets costing less than $20,000.
Renewable Energy Certificates (RECs) & Small-Scale Technology Certificates (STCs)
Businesses that install solar systems under 100kW qualify for STCs, which reduce upfront costs. Larger systems earn LGCs, which can be sold for additional revenue. These incentives lower your initial investment and improve ROI.
Depreciation for assets exceeding $20,000
For assets costing $20,000 or more, small businesses can allocate these to a general small business depreciation pool. In this pool, assets are depreciated at a rate of 15% in the first year and 30% in subsequent years. This method accelerates the depreciation process compared to standard schedules, allowing businesses to claim larger deductions in the earlier years of the asset’s life, thereby improving cash flow.
State-based incentives
Several states in the country offer additional solar rebates, interest-free loans or direct grants.
New South Wales (NSW)
The NSW Peak Demand Reduction Scheme (PDRS) offers incentives for businesses installing batteries to help manage peak energy demand. Businesses can expect a discount between $1,600 to $2,400 depending on the battery size (between 2kWh and 28kWh). Businesses with existing solar systems qualify for this incentive, but the battery installation must be done by an Accredited Certificate Provider (ACP). An additional bonus of $250-$400 is available for connecting the battery to a Virtual Power Plant (VPP), and this bonus can be claimed twice within a three-year period.
In addition to the state-level PDRS rebate, Randwick City Council offers its own sustainability rebates. As of November 2024, businesses can receive up to 10% off the installation costs of rooftop solar and solar battery systems, with a maximum rebate of $1,000.
South Australia (SA)
The City of Adelaide offers rebates to businesses that install solar panels and batteries. Businesses installing solar systems between 10kW and 20kW can receive up to $1,000, while those installing systems over 20kW can receive up to $2,000. Additionally, businesses installing new batteries can receive a rebate of 50% of the battery cost, up to a maximum of $2,000.
Northern Territory (NT)
Northern Territory businesses can receive a grant of $400 per kilowatt-hour of usable battery system capacity, up to a maximum of $12,000, for purchasing and installing eligible batteries and inverters. This grant can be used for new solar panel systems with batteries and inverters or, if you already have solar panels, for adding a battery and inverter to your existing system.
Business owners should check eligibility criteria, as funding is often first-come, first-served or has specific requirements.
Switching to solar in 2025 isn’t just about sustainability—it’s a smart financial move for Australian businesses. With instant asset write-offs, accelerated depreciation, federal grants, and state-based incentives, the upfront cost of solar can be significantly reduced while delivering long-term savings on energy bills.
The key to maximising these benefits is staying informed and acting early. Many rebates and grants operate on a first-come, first-served basis, and tax incentives may change with future government policies. Consulting a tax professional and researching state-specific programs can help businesses unlock the full financial potential of solar investment.
With lower costs, government support, and rising electricity prices, 2025 is the right time for businesses to make the switch to solar and future-proof their operations.
Energy Matters has been in the solar industry since 2005 and has helped over 40,000 Australian households in their journey to energy independence.
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