Hello @Jodie_ATO ,
You say that the life of solar panel installation is 20 years. Which I think is reasonable. However your published depreciation rates say that we can claim 10% per year for the diminishing value method of depreciation.
If you run a depreciation at 10% pa for 20 years you are left with around 12% of the initial value remaining in the 20th year. This is is no where near zero nor even near 10% of the initial value. This diminishing value rate favours the ATO by reducing tax deductions, does not assist with inflation and it does not favour the tax payer for various other reasons.
An annual rate of nearly 20% (I used 19.2%) for the diminishing value method brings the balance in the 20th year close to 1% of the initial value, not zero but much closer.
How do you calculate the rate of 10%? It seems entirely unreasonable for a life of 20 years and does not take into account that the value of the item should be zero or close to it in the 20th year?
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