22 May 2023

Practical Guide: maximising tax deductions for energy efficient upgrades

As a business owner, you have the opportunity to claim additional tax deductions for investments that promote electrification and energy efficiency. This guide will help you understand and leverage this incentive to its fullest potential.

Here's what you need to know:


  • Your business must have an annual turnover of less than $50 million.
  • The eligible assets or upgrades must be first used or installed ready for use between 1 July 2023 and 30 June 2024.

Types of Eligible Upgrades:

  • Electrification of heating and cooling systems: Consider replacing traditional fossil fuel-based systems with electric alternatives.
  • Improved refrigeration: Upgrade to more efficient fridges that consume less energy.
  • Induction cooktops: Replace conventional cooktops with induction-based ones for energy savings.
  • Battery installation: Consider installing batteries to store excess energy and optimize electricity usage.
  • Heat pumps: Explore the installation of heat pumps for efficient heating and cooling.

Incentive Details:

  • You can claim an additional 20% deduction on spending that supports electrification and energy efficiency.
  • Up to $100,000 of total expenditure will be eligible for the incentive.
  • The maximum bonus tax deduction you can claim is $20,000 per business.

Steps to Maximise Deductions:

  • Assess your business’s energy usage: Identify areas where energy efficiency upgrades can have the most significant impact.
  • Plan your upgrades: Prioritize investments that align with the eligible assets mentioned above.
  • Estimate costs: Determine the expenses associated with each upgrade project.
  • Budget wisely: Ensure that your total expenditure remains within the $100,000 limit to maximize your deductions.
  • Keep proper documentation: Maintain records of installation dates, invoices, and other relevant documentation for tax purposes.

Seek help and advice

  • Please consult with your accountant or tax advisor to ensure you understand the specific tax implications and requirements. They can guide you through the process, help you optimize your deductions, and ensure compliance with relevant regulations.

Remember, this incentive is time-limited, so act promptly to take advantage of it. Investing in electrification and energy-efficient upgrades not only helps reduce your environmental impact but also provides long-term cost savings for your business. 


Let’s chat if you would like more information or would like to leverage this opportunity to make sustainable choices that benefit both your bottom line and the planet.