Small businesses rewarded for going electric

Renewable energy lobby group Rewiring Australia has welcomed the federal government’s announcement of a special increase in tax deductions for small businesses that invest in electrification and energy efficiency.

The environmental impact of the tax incentives will be to replace gas power with electricity and to improve the efficiency of electrically powered equipment.

Businesses with turnover up to $50 million will be entitled to a bonus 20% tax deduction on batteries and other electrical devices when they invest up to $100,000 to swap out fossil fuel energy and technology. The maximum bonus tax deduction will be $20,000 per business.

It is estimated that the measure will cost $314 million over the forward estimates.

Rewiring Australia co-founder and Chief Scientist Dr Saul Griffith said the announcement would accelerate electrification among Australia’s 3.8 million small and medium businesses and lock in years of benefit for those who seized the opportunity.

“The federal government promised a ‘meaningful and substantial’ package of electrification measures in the federal budget and this announcement is the first part,” Griffith said.

“Swapping out fossil-fuelled devices and energy sources for renewable-backed electrification is the fastest, most cost-effective way to decarbonise our domestic economy. It embeds thousands of dollars’ worth of annual savings into the annual operations of small businesses, savings that accrue over the long term.

“Many small businesses who are reliant on fossil fuel energy have suffered serious bill shock this year as commodities such as gas have spiked. But when you assist small businesses to swap out polluting energy sources and machines for renewable-powered electric versions, you permanently lower the cost base of a business.”

Griffith said that making the switch to rooftop solar and electric devices gave businesses certainty.

“They know their operating costs won’t suddenly surge due to something beyond their control. When people take the risk of starting a business and employing people, the last thing they need is a spike in the gas or coal price due to a foreign conflict,” Griffith said.

“Rewiring Australia’s research has shown there are tens of billions of dollars wasted every year in the Australian economy on expensive and inefficient fossil fuels. Electrification is the climate policy that immediately delivers for the economy. We look forward to working closely with the government to assist with implementation of this package.”

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