Australian businesses, farms, and community organisations are set to benefit from significant upfront cost reductions on larger rooftop solar installations, with the federal government’s expanded Small-scale Renewable Energy Scheme (SRES) officially in effect from October 1, 2026. This landmark policy change increases the maximum eligible system size tenfold, from 100 kilowatts (kW) to 1 megawatt (MW), a move projected to slash installation costs by approximately 20% for mid-scale solar projects.
The expansion addresses what Energy and Climate Change Minister Chris Bowen previously termed the “missing middle” of Australia’s energy transition. While residential rooftop solar has seen widespread adoption, larger commercial and industrial sites were previously limited by the 100 kW cap, pushing them into the less accessible Large-scale Renewable Energy Target (LRET) framework. The new rules aim to unlock the vast potential of commercial rooftops, enabling more businesses to invest in cheaper, cleaner energy and reduce their exposure to volatile electricity prices.
How the Expanded SRES Works for Businesses
The SRES operates by generating Small-scale Technology Certificates (STCs) for eligible solar installations. These certificates represent a set amount of expected renewable generation and can be assigned to an installer or retailer in exchange for an immediate upfront discount on the system’s purchase price.
Prior to October 1, 2026, solar photovoltaic (PV) systems exceeding 100 kW were not eligible to create STCs, instead falling under the LRET which uses Large-scale Generation Certificates (LGCs). The amended Renewable Energy (Electricity) Regulations 2001 now bring solar PV systems with a total onsite capacity between 100 kW and 1 MW into the SRES.
This means a business installing a 250 kW solar system could see an upfront discount of around $68,000, while an 850 kW system might benefit from approximately $230,000 in savings. These savings are applied directly to the invoice, providing an immediate financial incentive rather than a future offset.
“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.” — Chris Bowen, Minister for Climate Change and Energy
Who Benefits from the 1MW Expansion?
The eligibility criteria for the expanded SRES focus on the solar system itself, rather than the business type. However, the government anticipates significant benefits for a wide range of organisations including:
- Farms and agricultural operations
- Manufacturing facilities
- Retail centres and logistics warehouses
- Schools and educational institutions
- Hospitals and healthcare facilities
- Community organisations
Businesses with substantial daytime electricity consumption and large roof spaces are particularly well-positioned to maximise the value of this expanded scheme. The shift aims to improve productivity and competitiveness across various sectors by lowering energy costs.
Key Changes and Eligibility Requirements
For systems installed on or after October 1, 2026, the key differences under the expanded SRES are outlined below:
| Feature | Previous SRES (before Oct 1, 2026) | Expanded SRES (from Oct 1, 2026) |
|---|---|---|
| Maximum Solar PV System Size | 100 kW | 1 MW (1,000 kW) |
| Eligible Technologies | Solar PV, Solar Batteries, Wind/Hydro, Solar Water Heaters, Air Source Heat Pumps (for PV up to 100kW) | Solar PV up to 1 MW; other technologies remain as per previous SRES rules. |
| Certificate Type | Small-scale Technology Certificates (STCs) | Small-scale Technology Certificates (STCs) |
| Deeming Period (for PV) | Declines annually until 2030 | Fixed 5-year deeming period for 100 kW - 1 MW systems |
| Estimated Upfront Cost Reduction | Varies by system size (for <100kW) | Around 20% for mid-scale systems (100kW-1MW) |
To qualify for the expanded SRES, mid-scale solar PV systems must meet several requirements. These include having components listed on the Clean Energy Council (CEC) approved list, being installed according to Solar Accreditation Australia (SAA) guidelines and electrical safety rules, and securing necessary planning and network connection approvals.
It is crucial to note that while the eligibility for systems installed from October 1, 2026, is now active, applications for creating STCs for these mid-scale systems are not expected to open until mid-to-late November 2026. This delay allows the Clean Energy Regulator (CER) time to implement the necessary systems and processes for assessment.
Maximising Your Solar Investment
Businesses considering a larger solar installation should assess their electricity consumption patterns, particularly daytime demand, to ensure the system is appropriately sized for their needs. While the expanded SRES makes larger systems more financially attractive, a sound business case and workable grid connection remain paramount.
For those looking to further optimise their solar investment and reduce reliance on the grid, integrating battery storage is often a logical next step. While this SRES expansion primarily covers solar PV, the federal government also offers incentives through the Cheaper Home Batteries Program, providing around a 30% discount on eligible small-scale batteries.
Understanding the various incentives and ensuring your system components and installation meet rigorous standards is vital for long-term performance and savings. For more information on selecting reliable components, consult guides like Best Solar Panels in Australia 2026: Get Up to 25% Efficiency & Max. $15,000 in Rebates. Businesses should also consider how to best manage their system’s output, particularly with varying feed-in tariffs, to maximise self-consumption. For a comprehensive overview of available support, refer to Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia.
This expansion of the SRES represents a significant step towards accelerating Australia’s transition to renewable energy, enabling a broader range of businesses to contribute to a cleaner energy future while substantially cutting their operational costs.