Like many business owners you may well have heard a lot about carbon emissions, the emissions scheme, carbon offsets, the carbon tax, going carbon neutral etc lately, and be concerned about what exactly that means to you….. the good news is that there is actually potential to decrease your business power costs & increase profits as well!
A practical e.g of what the proposed Carbon Tax will cost your Small Business-
A 10kw PV system in coastal QLD¹ will generate around 16,600kwh of clean, green electricity per year, which will avoid about 17.25 tonnes of CO2 being generated by standard coal fired stations, which would require around 86 trees to be grown at a cost of $448.00 ($26 per tonne).
Under the proposed scheme Carbon Tax Scheme; if your business uses 16600kwh per year purchased from standard sources, (a bill of around $3,486 pa or $872 per quarter), then in addition to that bill, under the expected carbon trading scheme, at $26 per tonne, you would pay an extra $448 in carbon tax each year.
*This example is for a relatively small business. At Premier Solar Commercial we design tailored systems to meet the requirements and opportunities of individual clients of any size.
How to Turn Lemons into Lemonade (or generate income rather than paying Carbon Taxes!)
If on the other hand you were proactive and installed a 10kw PV system on your roof and generated your own power, you would avoid both the cost of power purchase and carbon tax. The combined effect of this will do a few beneficial things for you:
It will give you a return of at least 13.3%* from day one return on your investment, and
It will fix your out going power cost at that level, regardless of future price power hikes and CPI,
By adding a layer of shading, (a tropical roof of PV modules) over your existing roof, it may significantly reduce the need of air conditioning and lower your power bills accordingly.
*If you don't use the buildings on the weekends and public holidays, the power generated will be sold back at up to 52 cents per kwh, giving you a potential return of 28.8% on your investment on those days!
¹ Other areas of Qld can enjoy between 9.5% and 14.5% higher amounts of power generation due to the increase in peak sunlight in those areas.
All of these simply add profit to your bottom line, whilst simultaneously making you a model corporate citizen and increasing your opportunities within the government sector.
How to pay for it-
If your cash flow is strong enough, then a cash purchase is certainly an option, but not necessarily the best option. Your accountant may also be able to show you benefits in using a bank loan whose interest is fully deductible. When you add the tax deductible depreciation to it, there may be some strong additional advantages to cash flow and tax.