Investment Boost on solar: what the 20 percent deduction is actually worth
Michael Wilkins · Updated 13 June 2026
The short answer
Investment Boost lets a business deduct 20 percent of a new commercial solar system's cost immediately, with the remaining 80 percent depreciating as normal. For a company at the 28 percent rate that is worth about 5.6 percent of the project cost in year-one tax cash: $14,000 on a $250,000 system, with no value cap (IRD, from 22 May 2025).
What Investment Boost is
Investment Boost is an accelerated tax deduction introduced from 22 May 2025: buy a new depreciable business asset, deduct 20 percent of its cost immediately, then depreciate the remaining 80 percent as you normally would (IRD). Commercial solar qualifies as a new business asset, and there is no cap on value.
You will see this advertised by some installers as if it were a 20 percent discount on solar. It is not, and the difference matters to your cash flow. It is a deduction: it reduces taxable income, and its cash value depends entirely on your tax rate.
What it is actually worth, in dollars
Take a $250,000 system bought by a company paying the 28 percent rate. Investment Boost lets you deduct $50,000 immediately. That deduction saves $50,000 x 0.28 = $14,000 of tax in year one. The year-one cash value is therefore 5.6 percent of the project cost, not 20 percent.
Because the remaining 80 percent still depreciates (solar has commonly been treated around 16 percent diminishing value in EECA's modelling, sourced from IRD schedules; confirm the classification for your install with your accountant), Investment Boost is mostly a timing benefit: more deduction now, less later. Timing benefits are real money, they are just not discounts, and our calculator and proposals state the figure at your entity's actual tax rate.
What qualifies and what does not
- Qualifies: new commercial solar systems, including panels, inverters, mounting and installation, first available for use on or after 22 May 2025.
- Qualifies: assets new to New Zealand, even if previously used overseas.
- Does not qualify: assets previously used in New Zealand, such as a second-hand local array.
- Does not flow to you under a PPA: the provider owns the asset and captures the deduction.
That last point changes the financing comparison more than most marketing admits: a no-upfront-cost PPA hands the tax benefit to the provider. The financing guide runs loan versus PPA versus outright with the Boost included on the ownership side.
How and when you claim it
- 1
Commission the system
The deduction lands in the income year the asset is first available for use, which for solar means commissioned and switched on, not ordered.
- 2
Claim 20 percent in that year's return
Your accountant claims the immediate deduction alongside normal depreciation on the remaining 80 percent of cost.
- 3
Depreciate the balance
The remaining 80 percent depreciates at the applicable IRD rate from the same date. Keep the invoice split clean between the solar asset and any unrelated roof work.
We are not tax advisers and this is not tax advice: confirm treatment with your accountant. What we do is put the correctly framed figure, at your entity's rate, into every feasibility study and proposal, so the decision is made on true numbers. See where it fits in the wider picture in the commercial solar guide.
Run your own numbers
Conservative assumptions, fully disclosed, no contact details needed.
Your indicative numbers
Conservative, ex GST, modelled not promised
System size
69 kW
Sized to your daytime load
Installed cost
$108,823 to $148,646
Confirmed with certified installers
Investment Boost, year one
about $7,209
A 20% immediate tax deduction, worth this in cash at the 28% company rate. Not a discount.
Estimated annual saving
$18,779 to $22,257
80% of generation used on site
Indicative payback
4.5 to 7.5 years
Net of the Investment Boost benefit
Asset life
25+ years
Panels keep producing long after payback
ASB Smart Solar Loan: 0% for 5 years
Your current bill
$4,000/month
Loan repayment
$2,146/month
Estimated saving
$1,710/month
Reverts to a floating business rate after five years.
On these numbers the monthly repayment of $2,146 sits at or below your current bill of $4,000 while the loan runs, and the power keeps getting cheaper after it ends.
How this is modelled (assumptions v2026-06-v3)
- Power valued at $0.25 to $0.30/kWh ex GST (savings are never valued at the top of the commercial tariff range).
- Export credited at $0.08/kWh, the conservative end of current buy-back rates.
- Installed cost interpolated from 30 kW ($1,800 to $2,600/kW) down to 500 kW ($1,100 to $1,500/kW), 2025/26 working ranges.
- Central Otago and Queenstown Lakes yield modelled at 1260 kWh per kW per year.
- Self-consumption capped by your daytime usage profile and held below typical vendor claims; sizing targets 90 percent of daytime load.
- Investment Boost stated as the year-one cash value of the 20 percent immediate deduction at the 28 percent company rate. It is a tax timing benefit, not a discount.
- No power price escalation and no panel degradation in simple payback; omitting escalation outweighs degradation, so the net effect is conservative.
Indicative only; not financial or tax advice. The feasibility study models your site from twelve months of actual bills.
Get these numbers checked properly
The real model is built from twelve months of your bills. Send your details and we will do it for you; we reply within one working day, no obligation.
Straight answers
How does Investment Boost work on solar panels?
A business that buys a new commercial solar system can deduct 20 percent of its cost immediately in the year the asset is first available for use, on top of normal depreciation on the remaining 80 percent. It applies to new assets from 22 May 2025 with no value cap, claimed through your tax return (IRD).
What is Investment Boost actually worth in cash?
The deduction reduces taxable income, so the year-one cash value is 20 percent of the asset cost multiplied by your tax rate. For a company at 28 percent that is 5.6 percent of the project: $14,000 on a $250,000 system. It is a timing benefit on tax you would otherwise pay, never a 20 percent discount.
Does second-hand solar equipment qualify for Investment Boost?
Assets previously used in New Zealand do not qualify. New assets do, and so do assets that are new to New Zealand even if used overseas. For solar this is rarely a live issue, since commercial systems are almost always specified new, but it rules out buying a decommissioned local array (IRD).
Can I claim Investment Boost under a solar PPA?
No. Under a power purchase agreement the provider owns the system and you buy the electricity, so the deduction belongs to the asset owner, not to you. If the tax benefit matters to your decision, ownership structures (cash or loan-funded) are the route that captures it.
Is there a cap on Investment Boost?
No value cap applies: the 20 percent immediate deduction works the same on a $50,000 shed system and a $750,000 industrial array. The scheme applies to new depreciable business assets first available for use on or after 22 May 2025, and Treasury forecasts put its cost at around $6.6 billion through June 2029, which signals durable political commitment.
More from this guide
- Commercial solar in New Zealand: costs, payback and how to decide
- Solar buy-back rates for businesses: export is not the prize
- What a commercial solar feasibility study includes, and when you need one
- Solar finance for NZ businesses: loans, PPAs and what actually stacks
- Solar power for dairy farms: the honest numbers
- Solar for wineries and vineyards: Marlborough to Central Otago
See the Boost at your tax rate
The calculator states the year-one cash value at your entity's rate, framed as the deduction it is. No discount theatre.