Instant Asset Write-Off for Solar Panels & Batteries in Australia

Under the current rules, eligible small businesses can immediately deduct the full cost of assets under $20,000 - including solar panel systems and battery storage. From 1 July, that threshold drops to just $1,000, meaning most solar systems will need to be depreciated over several years instead.

The instant asset write-off is an Australian Government tax measure under the Income Tax Assessment Act 1997 (Division 328) that allows eligible small businesses to immediately deduct the business portion of the cost of an asset in the income year it is first used or installed ready for use. Rather than claiming depreciation over the effective life of an asset (which the ATO sets at 20 years for solar panel systems and batteries), the write-off lets you claim the full deduction upfront - putting money back into your business faster.

For the 2025-26 financial year, the threshold is $20,000 per asset. This applies to each individual asset, so a business could purchase multiple qualifying assets and write off each one. The asset must be:

• Purchased and paid for during the financial year
• First used or installed ready for use before 30 June 2026
• Used for a taxable (business) purpose
• Under the $20,000 threshold (exclusive of GST if registered)
  
  

Solar panel systems and battery storage are classified as depreciable assets under ATO simplified depreciation rules. A typical residential or small commercial system - from a 6.6kW system through to a 15kW system - commonly falls well under the $20,000 mark. Battery systems like a 14kWh unit at $4,990 also qualify as separate assets. In practice, this means a business could write off both a solar system and a battery in the same financial year if each is under the threshold individually.

The financial impact of claiming the full deduction upfront versus depreciating over time is significant. Here is a comparison at the 25% company tax rate:

Depreciation column assumes first-year rate of 15% under the simplified depreciation pool. Figures are illustrative - your actual tax saving depends on your business structure, tax rate, and circumstances. Consult your accountant for precise calculations.

On top of the tax deduction, your solar system also qualifies for Small-scale Technology Certificates (STCs) under the federal solar rebates program - which reduce your upfront purchase price by $2,000-$4,000+ depending on system size and location. The STC discount and the write-off stack together.

Request your free solar assessment today. We'll design the right system for your business and schedule installation with time to spare.

The instant asset write-off makes the timing ideal - but solar delivers strong returns regardless of the tax benefit. The write-off simply accelerates your payback.

• Electricity prices have risen 20-35% in 3 years - The Australian Energy Regulator has approved significant price increases across NSW, QLD, and VIC. Commercial rates now exceed 30c/kWh in most states. Solar locks in a large portion of your energy costs at zero marginal cost for 25+ years.
• Typical payback of 3-5 years - Most commercial solar systems pay for themselves through electricity savings alone within 3-5 years, delivering free power for the remaining 20+ years of the system life.
• Add battery storage for greater savings - Pair your solar with a commercial battery to store excess generation and use it during peak tariff periods (typically 3pm-9pm), further reducing your grid dependence.
• Increase your property value - Commercial properties with solar command higher valuations and attract tenants who value lower operating costs.
• Demonstrate sustainability - More customers, employees, and stakeholders expect businesses to take measurable action on their environmental impact.
• Federal solar rebates reduce your upfront cost - STCs currently discount your system cost by $2,000-$4,000+ depending on system size and location. State-level incentives may offer additional support depending on your location.

The instant asset write-off is the accelerator - it does not change the underlying investment case for solar, it just makes the first-year cash flow dramatically better.