Australian businesses, farms, and community organisations are set to benefit from significant upfront cost reductions on larger solar photovoltaic (PV) systems, following the federal government’s expansion of the Small-scale Renewable Energy Scheme (SRES). Effective for systems installed from October 1, 2026, the eligibility limit for solar under the SRES has increased tenfold from 100 kilowatts (kW) to 1 megawatt (MW), offering an estimated 20% discount on installation costs.
This policy shift, confirmed by the Department of Climate Change, Energy, the Environment and Water (DCCEEW) and the Clean Energy Regulator (CER), aims to accelerate the uptake of mid-scale solar across commercial and industrial sectors. While applications for the expanded scheme are anticipated to open in mid-to-late November 2026, systems installed from the October 1 commencement date will be eligible.
Minister for Climate Change and Energy Chris Bowen stated that this reform will reduce the upfront cost of installing a mid-scale solar system by approximately 20%, making it easier for businesses and farmers to invest in cheaper, cleaner energy. This move is expected to enhance productivity and competitiveness across various sectors, including manufacturing, agriculture, retail, transport, and logistics, with benefits ultimately flowing through to households via reduced goods and services costs.
Significant Upfront Savings for Larger Systems
The SRES operates by generating Small-scale Technology Certificates (STCs) for eligible solar installations, which can typically be assigned to an installer or retailer to reduce the upfront purchase price. For businesses considering systems between 100 kW and 1 MW, this expansion translates into substantial savings.
“This reform will reduce the upfront cost of installing a mid-scale solar system by around 20 per cent, making it easier for businesses and farmers to invest in cheaper, cleaner energy.” — Minister for Climate Change and Energy Chris Bowen
The DCCEEW has provided illustrative examples for a Zone 3 location (which includes major cities like Melbourne), estimating significant discounts:
| System Size | Estimated Upfront Discount (AUD) |
|---|---|
| 250 kW | $68,000 |
| 500 kW | $136,000 |
Note: These are estimates. Actual values will depend on final regulations, certificate calculations, market prices, and specific project details.
Beyond upfront savings, a 250 kW system, for example, is projected to produce around 345 MWh annually, potentially avoiding electricity charges of approximately 15 cents per kWh. This could result in annual electricity cost savings of around $50,000. Such savings are crucial for businesses looking to manage operational expenses and reduce exposure to international energy price shocks.
Eligibility and Future Enhancements
To qualify for the expanded SRES, mid-scale solar PV systems must adhere to existing requirements, including installer and product accreditation, compliance with state, territory, and Commonwealth planning regulations, electrical safety standards, and network connection agreements.
The Clean Energy Regulator, which administers the SRES, has already supported over 4.5 million Australian households and small businesses in installing solar. This latest expansion broadens the scope to larger commercial rooftops, enabling more substantial on-site generation where electricity is consumed.
To complement the SRES expansion and further streamline the process for businesses, the Department is also preparing a rule change request for the Australian Energy Market Commission (AEMC). This aims to facilitate easier and quicker connection of larger solar systems to the electricity network.
Businesses considering solar should also be aware of other available support. For a broader understanding of financial incentives, consult guides such as Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia. When selecting solar panels, understanding efficiency and rebate potential is key, as detailed in Best Solar Panels in Australia 2026: Get Up to 25% Efficiency & Max. $15,000 in Rebates. Furthermore, optimising self-consumption from your new system can significantly cut ongoing power bills, a topic explored in Solar Households: Slash Your 2026 Bills by $1,000+ with These Electricity Plans.
This federal initiative underscores Australia’s commitment to expanding its renewable energy footprint beyond residential rooftops, leveraging large commercial spaces to contribute to the nation’s energy transition and offering tangible financial benefits to a wider array of Australian enterprises.
Impact on the Commercial Sector
The extension of SRES eligibility is particularly relevant for sectors with significant daytime electricity demand and available roof space, such as industrial facilities, manufacturing plants, cold storage, agricultural operations, and large retail centres. These businesses often face substantial energy bills, and the ability to generate a larger proportion of their own power can lead to considerable long-term savings and increased energy independence.
While the financial incentives are compelling, businesses are advised to conduct thorough assessments of their energy consumption profiles, roof suitability, and potential export limitations. Modelling the return on investment should consider both the upfront SRES discount and the projected electricity bill savings over the system’s lifespan.
This policy change marks a pivotal moment for Australia’s commercial solar sector, unlocking new opportunities for businesses to invest in sustainable energy solutions and contribute to a cleaner, more resilient national grid.