Australian businesses, farms, and community organisations are now eligible for an estimated 20 per cent reduction on the upfront cost of larger rooftop solar systems, following the expansion of the federal Small-scale Renewable Energy Scheme (SRES). The significant policy change, which took effect on October 1, 2026, raises the maximum eligible solar system size from 100 kilowatts (kW) to 1 megawatt (MW), a tenfold increase.
This reform is poised to unlock substantial savings for a segment of the market previously underserved by federal incentives, allowing medium to large commercial and industrial (C&I) premises to more effectively harness solar power. The Clean Energy Regulator (CER) confirmed that eligible mid-scale solar systems installed from October 1, 2026, will qualify for Small-scale Technology Certificates (STCs), with applications expected to open in mid to late November 2026.
Minister for Climate Change and Energy, Chris Bowen, emphasised the impact of this expansion, stating, “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 cut energy costs.” He highlighted that the SRES has already supported over 4.5 million households and small businesses in installing solar, and this expansion aims to extend those benefits to larger commercial users.
Bridging the ‘Missing Middle’ in Australia’s Solar Transition
For years, the 100 kW cap on SRES eligibility meant that many businesses with significant roof space and high energy consumption were effectively penalised. Systems exceeding this threshold were forced into the Large-scale Renewable Energy Target (LRET) framework, which generates Large-scale Generation Certificates (LGCs) that do not offer the same immediate upfront discount as STCs. This often led businesses to install undersized systems or forgo solar altogether due to less favourable financial incentives.
“The technical rooftop potential for solar on commercial, industrial and agricultural rooftops could exceed 80 gigawatts,” said Minister Bowen. “That’s an opportunity we should miss no longer.”
The expanded SRES now addresses this ‘missing middle’ by making systems up to 1 MW eligible for STCs, providing a direct point-of-sale discount through accredited installers. This streamlines the process and improves the economic viability for larger installations, particularly for:
- Warehouses and distribution centres
- Manufacturers and food processors
- Cold storage and refrigerated facilities
- Farms, including poultry sheds and dairies
- Schools, aged care, and childcare facilities
- Shopping centres and commercial property owners
How the Expanded SRES Delivers Savings
The SRES mechanism generates STCs based on a system’s expected renewable energy generation over a set deeming period. These certificates have a market value and are typically assigned to the installer, who then passes on the value as an upfront discount on the system’s purchase price. For systems between 100 kW and 1 MW, a key feature of the expansion is a fixed 5-year deeming period for STCs, offering greater certainty for financial planning.
For example, the government estimates that a 250 kW rooftop solar system could receive an upfront incentive of approximately AUD $68,000. An 850 kW system could see savings around AUD $232,000. These figures are indicative and depend on the STC market value, system size, location, and installation date. Businesses should consult with accredited installers for precise quotes and rebate calculations. For more information on navigating these incentives, our guide on Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia provides a comprehensive overview of available support.
Comparison of SRES Frameworks
| Feature | Historical SRES Framework (Pre-Oct 2026) | Expanded SRES Framework (From Oct 2026) |
|---|---|---|
| System Capacity Limit | Capped at 100 kW | Expanded up to 1,000 kW (1 MW) |
| Upfront Cost Reduction | Benefits capped above 100 kW | Average ~20% discount up to 1 MW |
| Financial Mechanism | Point-of-sale STC discount | Point-of-sale STC discount up to 1 MW |
| Admin Requirements | LGC power station registration over 100 kW | Simple STC assignment on installer quote |
| Deeming Period (100kW-1MW) | Not applicable | Fixed 5-year deeming period |
Source: Clean Energy Regulator, Australian Government estimates.
Beyond the Rebate: Streamlining Connections
Recognising that financial incentives are only one part of the equation, the Department of Climate Change, Energy, the Environment and Water is also preparing a rule change request for the Australian Energy Market Commission (AEMC). This aims to make it easier for businesses to connect larger solar systems to the electricity network, addressing a historical bottleneck for commercial and industrial projects.
Faster grid approvals are crucial for accelerating the deployment of larger solar systems and maximising their benefits. As businesses consider upgrading, understanding the best solar panel options is vital. Our guide, Best Solar Panels in Australia 2026: Get Up to 25% Efficiency & Max. $15,000 in Rebates, can assist in making informed choices for these larger installations. Additionally, proper maintenance will be key to ensuring these larger systems continue to deliver maximum output and savings over their lifetime, a topic covered in Maximise Your Solar Output by 25% in 2026: Your Essential Australian Maintenance Guide.
This expansion of the SRES represents a significant step towards empowering Australian businesses to take greater control of their energy costs, reduce their carbon footprint, and contribute to the nation’s renewable energy targets. Businesses considering a mid-scale solar installation should engage with an accredited installer to understand the full scope of eligibility and potential savings under the updated scheme.