Small Business Energy Incentive

Small Business Energy Incentive: 20% bonus deduction

The 2023 Federal Budget papers confirmed that the Small Business Energy Incentive will provide businesses with an annual turnover of less than $50 million an additional 20% deduction on spending that supports electrification and more efficient use of energy. This measure was originally announced by the Treasurer on 30 April 2023.

The Small Business Energy Incentive will apply to a range of depreciating assets, as well as upgrades to existing assets.  These will include assets that upgrade to more efficient electrical goods such as energy-efficient fridges, assets that support electrification such as heat pumps and electric heating or cooling systems, and demand management assets such as batteries or thermal energy storage.

Certain exclusions will apply, such as:

  • electric vehicles
  • renewable electricity generation assets
  • capital works
  • assets that are not connected to the electricity grid and use fossil fuels.

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.

Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.

For more information please visit Small business energy incentive | Australian Taxation Office ( or contact our office.