Federal budget 2015: Tax breaks shine on solar industry

​Solar retailer Sun Trix managing director Jenny Paradiso says she is ecstatic about the new tax breaks for small business, hoping it will lead to another solar resurgence, while at the same time help companies cut their power bills.

While the Abbott government introduced the small business package to target tradespeople – who have been dubbed “Tony’s tradies” – to kickstart a flagging economy, it may inadvertently give the new solar sector a new lease on life.

“There has been a negative cloud hanging over us, especially given the uncertainty over the Renewable Energy Target. A lot of people in the solar industry had felt they had been completely abandoned by the government,” Ms Paradiso told The Australian Financial Review.

“So for this to come through, I think it’s going to be a huge plus for businesses and also for companies like us who are trying to do the right thing.”

Ms Paradiso said the $20,000 tax write off – available for those with an annual turn-over of less than $2 million – was more than enough for a small business to get an 18 kilowatt system on the roof of their office which could help them save $2000 each quarter or $8000 a year.

She said the solar industry had been in the doldrums recently having been unfairly blamed for double-digit power bill increases.

In fact, some senior Abbott government ministers made a lot of political mileage from criticising state government solar feed-in tariff schemes.

Under the generous solar feed-in tariffs, households were paid up to 44 cents a kilowatt hour to put electricity back into the grid, but they were heavily subsidised by non-solar households who ended up paying the bill through higher electricity prices.

Ms Paradiso, who runs the South Australian-based solar company with 25 staff, said the new tax break was the only thing anyone was talking about at a solar conference in Melbourne on Thursday.

“I’m very excited about it. It will be a boost for the industry, but it will also help businesses who are struggling to pay their overheads,” she said.

“Solar is a difficult thing to sell but this is a perfect opportunity to really highlight to companies how it can make it easier for them to get it.”

Another company, CSR Bradford, said it would start to plan to advertise the offer to potential customers from Friday.

Andrew Rowe, who is the general manager of Bradford’s solar business, said the tax write off would be a boon for business and would lead to a resurgence for the solar sector.

“It’s a tough industry so this can only help. We have a considerable number of SMEs [small and medium-sized enterprises] under the $2 millon threshold, so from our point of view there’s a great opportunity there to help our customers save energy,” Mr Rowe said.

Clean Energy Council policy director Russell Marsh said there were more than 1.4 million homes with solar PV systems, but only 15,000 businesses.

He hoped the tax break could be enough to convince sceptical businesses to make the jump to solar.

“A typical small business can slash its power bills by about a quarter by installing a large solar power system, but many smaller operators often don’t have the up-front capital they need to make the investment,” Mr Marsh said.

“This tax break could be enough of an incentive to help small businesses to help themselves become more efficient and competitive by reducing their costs on electricity over the long term.”