The impact solar can have on business, big and small is vast. One of the main drivers for business to make the switch to renewable energy on their own premise is the positive financial impact it can have in both the short and long term.
Commercial Solar Finance and Leasing gives business access to low cost capital to finance renewable energy projects like solar installations so that they can maintain strong cash flow while offsetting their OPEX and switching to renewable energy.
The key difference between Finance VS a Lease is who technically owns the asset associated with the debt.
When you get finance (usually a chattel mortgage) you own the goods, in this case the solar system and pay back the finance company over the term.
In the case of a lease, technically the finance company owns the goods until you make the final lease payment and then the goods legally are yours. This can sometimes be called rent to own as you pay ‘rental’ payments along the way and it isn’t till the very end of the term that you actually own the goods.
It is easy to get caught up in these differences however the true impact is mostly tax based. For leases you can usually claim the tax as each repayment is made. However with a chattel mortgage, you can usually claim the tax element upfront for everything.
With the ever changing tax landscape in Australia, it is best to speak to your accountant first.
In Australia, Chattel Mortgages are incredibly common for businesses when they are buying assets for their businesses. You can use a chattel mortgage to buy anything from a car to a tractor to a solar installation and thus they are often a very good solution for a business. When you couple in the tax benefits and ease of credit approval, you can have a very good solution.
Other things to consider that can impact what your best options are:
Given the nature of finance, every business being different and every installation being different speak to a Professional Solar Finance Broker today at Teho and understand your options.
Energy costs are one of the highest expenses in any business operational expense line. From manufacturing to retail, keeping the lights on and powering production comes at a cost. Solar can help you mitigate your power costs immensely and when coupled with a storage solution you can run long into the night with your own, clean, green, cheap power.
Often, when done right, a new solar or solar and storage solution can actually run cash flow positive when coupled with the right finance option when comparing to your old energy expenses.
To understand, speak to someone at Teho today to do a full energy audit and comparison.
When you install solar, energy storage or both you are adding an asset of value to your business. The tax benefits you can leverage off are things like, the GST on the purchase price can be claimed back and the depreciation of the asset. Speak to your accountant to understand the details.
When you add renewable energy to your business, there are government incentives available depending on the size of the system. STC’s or small scale technology certificates are a good example. For every single panel that is added to your business to generate you clean, green, cheap energy the government will help pay some of the costs associated with installation VIA the STC program. We have written at length about the program however as a guide, you will get around $500.00 per kW of solar installed.
Most retailers will claim them on your behalf and show the deduction on your quote to save you from having to go through the claiming process.
The team at Teho have a deep understanding and background in asset finance. Both directors have worked in asset finance and financed assets from planes to cranes. If you are looking at renewable energy for your business, speak to Teho today for a finance or lease quote.