Australian businesses, farmers, and community organisations are now eligible for significantly expanded federal solar incentives, with the Small-scale Renewable Energy Scheme (SRES) officially extending its reach to larger rooftop solar systems from 1 October 2026. This policy change, legislated by the Albanese Government, is set to reduce the upfront cost of eligible commercial solar installations by approximately 20 per cent.
Previously, the SRES, which provides Small-scale Technology Certificates (STCs) as an upfront discount, was capped at solar photovoltaic (PV) systems up to 100 kilowatts (kW). The recent amendment to the Renewable Energy (Electricity) Regulations 2001 now expands this eligibility to mid-scale solar PV systems ranging from 100 kW up to 1 megawatt (MW).
This move is designed to unlock the economic benefits of solar for a broader range of commercial and industrial operations, including warehouses, factories, schools, hospitals, and agricultural facilities. Minister for Climate Change and Energy Chris Bowen highlighted the reform’s potential to bolster energy security and shield Australian businesses from volatile international energy prices.
“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.
While eligibility for systems installed from 1 October 2026 is immediate, the Clean Energy Regulator (CER) has advised that the application process for these expanded entitlements will open in mid-to-late November 2026, once the necessary systems and processes are in place. Businesses considering a new installation within this size bracket are encouraged to plan accordingly, ensuring their projects align with the scheme’s requirements and the eventual application window.
How the Expanded SRES Works for Businesses
The SRES operates by assigning STCs to eligible solar installations, which installers typically claim on behalf of the customer, passing on the value as a direct discount on the system’s purchase price. For systems in the new 100 kW to 1 MW band, the CER has confirmed that certificates will utilise a fixed five-year deeming period. This provides a clear framework for calculating the upfront incentive, offering greater certainty for commercial investment decisions.
The actual dollar value of the discount will depend on various factors, including the system’s size, geographical location, and the prevailing market price of STCs. However, the estimated 20 per cent reduction in upfront installation costs represents a substantial incentive for businesses to transition to solar. For context, a 500 kW system, which might have previously fallen outside the full scope of federal STC support, could now see a significant portion of its initial investment offset. This is distinct from residential solar rebates, which have their own structures and phase-down schedules, such as the upcoming reduction in the federal battery STC factor on 1 January 2027.
Driving Commercial Solar Uptake
Australia already boasts one of the highest rates of rooftop solar penetration globally among households, with over 4.5 million homes and small businesses now equipped with solar PV. The expansion of the SRES for mid-scale systems aims to replicate this success across the commercial and industrial sectors, leveraging vast expanses of unused rooftop space on commercial buildings, factories, and agricultural sheds. This initiative aligns with broader national goals to increase renewable energy’s share in the National Electricity Market (NEM) and reduce overall electricity costs.
Lower energy costs can significantly enhance the competitiveness of Australian manufacturers, farmers, retailers, and logistics businesses. By generating their own power, these entities can reduce their reliance on grid electricity, mitigate exposure to market price fluctuations, and contribute to Australia’s clean energy transition. Businesses looking to maximise their solar investment should also consider factors such as ongoing maintenance to ensure optimal system performance. For further guidance on maintaining efficiency, refer to our guide on Maximise Your Solar Output by 25% in 2026: Your Essential Australian Maintenance Guide.
The Path Forward for Mid-Scale Solar
To complement the SRES expansion, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) is also preparing a rule change request for the Australian Energy Market Commission (AEMC). This request aims to streamline the process for businesses to connect larger solar systems to the electricity network, addressing potential grid integration challenges that can arise with increased distributed generation.
For businesses planning to take advantage of this expanded rebate, it is crucial to engage with accredited solar installers who are familiar with the scheme’s requirements and the process of assigning STCs. Understanding the nuances of solar panel technology, such as the differences between N-Type and P-Type panels, can also help optimise system design and long-term savings. More information on panel types can be found in our article: N-Type vs. P-Type Solar Panels in Australia 2026: Unlock $1,000+ Extra Savings Annually.
This policy update represents a significant step towards enabling more Australian businesses to access cheaper, cleaner energy and contribute to the nation’s renewable energy targets. Businesses are advised to consult official Clean Energy Regulator guidelines and accredited installers for specific eligibility criteria and application procedures. For a broader overview of available government support, our Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia provides additional context on federal and state incentives.
| System Size (kW) | Approximate Pre-Rebate Cost Range (AUD) | Estimated STC Discount (Post 1 Oct 2026) |
|---|---|---|
| 100 kW | $80,000 – $120,000 | ~20% ($16,000 – $24,000) |
| 250 kW | $200,000 – $300,000 | ~20% ($40,000 – $60,000) |
| 500 kW | $400,000 – $600,000 | ~20% ($80,000 – $120,000) |
| 1 MW | $800,000 – $1,200,000 | ~20% ($160,000 – $240,000) |