Australian businesses and farmers are set to benefit from a significant reduction in solar installation costs, with the federal government’s expanded Small-scale Renewable Energy Scheme (SRES) now active. As of 1 October 2026, solar photovoltaic (PV) systems up to 1 megawatt (MW) are eligible for Small-scale Technology Certificates (STCs), a change estimated to cut upfront installation expenses by around 20 per cent.
The reform addresses what the Clean Energy Regulator (CER) has termed Australia’s “missing middle” in solar uptake, bridging the gap between residential rooftop systems and large-scale solar farms. Previously, only systems under 100 kilowatts (kW) qualified for STCs, forcing larger commercial and industrial installations to rely on the less immediate financial benefits of Large-scale Generation Certificates (LGCs).
Minister for Climate Change and Energy, Chris Bowen, highlighted the direct economic advantages of the scheme. “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 Bowen stated. He added that lower energy costs would enhance productivity and competitiveness across various sectors, including manufacturing, agriculture, retail, transport, and logistics, with benefits flowing to households through reduced goods and services prices.
Who Benefits from the Expanded SRES?
The expanded SRES is designed to support a broad range of mid-scale energy users. The Clean Energy Regulator anticipates that farmers, manufacturers, retailers, logistics centres, schools, hospitals, and community organisations will be among the primary beneficiaries. Small businesses with substantial roof space and high daytime electricity consumption are also expected to see considerable savings.
“One in three Australian homes have rooftop solar, but larger energy users have been locked out because the existing solar rebate only supports systems up to 100kW. We’re fixing that by expanding support to systems up to 1MW, unlocking the potential of commercial rooftops and helping businesses cut power bills, invest in growth and create jobs.” — Minister for Climate Change and Energy Chris Bowen
Eligible systems must be commissioned on or after 1 October 2026. The components, including panels, batteries, and inverters, must appear on the Clean Energy Council (CEC) approved list, and installations must comply with Solar Accreditation Australia (SAA) guidelines and electrical safety rules.
The Mechanism: Small-scale Technology Certificates (STCs)
Under the SRES, each STC represents one megawatt-hour (MWh) of renewable electricity expected to be generated or displaced by an eligible system. Installers or system owners can create these certificates and then sell or assign them, with the proceeds reducing the upfront price of the solar installation.
A key feature of the expansion for mid-scale systems (100 kW to 1 MW) is a fixed five-year deeming period for STC creation. This provides greater certainty for businesses calculating their return on investment compared to the declining deeming period for smaller systems. For businesses considering how to best leverage these incentives, understanding the nuances of STCs is crucial.
Application Timeline
While the scheme officially commenced on 1 October 2026, applications to create STCs for eligible mid-scale systems are expected to open in mid to late November 2026. This delay allows the CER to implement the necessary systems and processes for assessing these new categories of applications.
Impact on Commercial Solar Investment
This policy shift is anticipated to significantly improve the financial viability of solar projects for Australia’s commercial and industrial sector. By providing a substantial upfront discount, the government aims to encourage greater investment in rooftop solar, helping businesses reduce operational costs and enhance energy security. The Clean Energy Regulator noted that only 28 MW of capacity across 80 power stations in the 100 kW to 1 MW category were accredited under the Large-scale Renewable Energy Target in the first half of 2026, highlighting the previous lack of uptake in this segment.
For businesses looking to electrify their operations, this rebate can be a game-changer. It aligns with broader national efforts to transition to cleaner energy and reduce reliance on volatile fossil fuel markets. Businesses should consult with accredited solar installers to assess their eligibility and potential savings. For a comprehensive overview of available support, refer to our guide on Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia. Additionally, understanding how to Maximise Your Solar Output by 25% in 2026: Your Essential Australian Maintenance Guide can further enhance the long-term value of a new system.
The expansion of the SRES is a critical step towards harnessing Australia’s vast commercial roof space for renewable energy generation, offering tangible financial relief and contributing to the nation’s energy independence. With installation costs becoming more accessible, businesses now have a stronger incentive to invest in their own power generation, driving down their bills and contributing to a more sustainable energy future.
Comparative System Costs (Illustrative Post-Rebate)
While specific post-rebate costs will vary based on STC market value, system size, and installer, the 20% reduction represents substantial savings. For context, typical commercial solar system costs before this expansion could range considerably. The new scheme aims to bring the effective cost down, making projects more attractive. For example, a 200kW system, which might have cost approximately AUD $200,000 before the expansion, could now see an upfront reduction of around AUD $40,000.
| System Size (kW) | Estimated Pre-Rebate Cost (AUD) | Estimated Post-Rebate Cost (AUD) | Upfront Saving (AUD) |
|---|---|---|---|
| 100 | $100,000 - $130,000 | $80,000 - $104,000 | $20,000 - $26,000 |
| 250 | $250,000 - $325,000 | $200,000 - $260,000 | $50,000 - $65,000 |
| 500 | $500,000 - $650,000 | $400,000 - $520,000 | $100,000 - $130,000 |
| 1000 | $1,000,000 - $1,300,000 | $800,000 - $1,040,000 | $200,000 - $260,000 |
Note: These figures are illustrative and based on a hypothetical 20% reduction. Actual costs and savings will depend on specific system components, installation complexity, STC market value at the time of assignment, and installer quotes.