Australian businesses, industrial facilities, and farms are set to unlock significant upfront savings on solar photovoltaic (PV) installations, following a major announcement by the Australian Government on 5 August 2026. The Small-scale Renewable Energy Scheme (SRES) eligibility cap has been expanded tenfold, from 100 kilowatts (kW) to 1 megawatt (MW), a change expected to reduce installation costs by approximately 20% for eligible mid-scale systems from 1 October 2026.
This policy shift addresses the long-standing ‘missing middle’ in Australia’s solar landscape, where systems larger than 100 kW were previously excluded from the more accessible SRES incentives, instead falling under the Large-scale Renewable Energy Target (LRET) and its Large-scale Generation Certificates (LGCs). Now, commercial, industrial, and agricultural operations can access Small-scale Technology Certificates (STCs) for systems up to 1 MW, directly impacting their bottom line.
Substantial Savings for Commercial & Industrial Solar
Minister for Climate Change and Energy, Chris Bowen, announced the expansion, highlighting its potential to accelerate carbon abatement and reduce electricity bills for a wide range of enterprises. The financial impact for businesses is considerable, with estimated upfront savings reaching into the hundreds of thousands of dollars. For example, a 250 kW solar system could see a reduction of approximately AUD 68,000, while a 500 kW system might save around AUD 136,000.
These savings are calculated based on an STC price of approximately AUD 39.40, a Zone 3 rating, and a 5-year deeming period, which reflects the typical benefits passed on to customers by registered agents. The ability to claim STCs for larger systems significantly lowers the barrier to entry for businesses looking to invest in renewable energy.
“The changes intend to support larger solar PV system installations, including by commercial, industrial and agricultural facilities, helping to accelerate carbon abatement through increased renewable electricity generation.”
This reform is expected to be budget-neutral for the government, with additional compliance costs estimated at only AUD 1 to AUD 2 annually. The Clean Energy Council welcomed the announcement, recognising the vast untapped potential of large commercial rooftops to contribute to Australia’s energy transition.
Bridging the ‘Missing Middle’ in Australia’s Solar Market
Australia boasts one of the highest uptakes of residential rooftop solar globally, with over 4.3 million systems totalling more than 28.3 GW capacity installed across the country. However, the commercial and industrial sector has lagged, with businesses installing only about 5.6 GW of solar capacity, predominantly in systems under 100 kW.
The previous 100 kW cap under the SRES often meant businesses had to undersize their solar installations to qualify for the scheme’s benefits, or face the complexities of the LRET. This expansion is designed to better match the electricity requirements of medium and large energy users, making greater use of vast commercial and agricultural roof spaces.
| System Size (kW) | Estimated Annual Generation (MWh) | Estimated Annual Electricity Savings (AUD) | Estimated Upfront STC Savings (AUD) |
|---|---|---|---|
| 250 | 345 | 50,000 | 68,000 |
| 500 | 690 | 100,000 | 136,000 |
| 850 | 1,173 | 175,000 | 231,200 (pro-rata for 850kW) |
Note: Annual generation and electricity savings are estimates based on typical system performance and electricity tariffs. Upfront STC savings are estimates based on an STC price of AUD 39.40, Zone 3, and a 5-year deeming period. Actual savings may vary.
What This Means for Your Business
For businesses, agricultural operations, schools, hospitals, and community facilities considering solar, the expanded SRES eligibility presents a compelling financial incentive. It encourages greater self-consumption of solar power, reducing reliance on grid electricity, which can be particularly valuable given fluctuating energy prices.
Planning for a solar installation now can position your organisation to take advantage of these enhanced rebates from October 1, 2026. This move aligns with broader government efforts to support renewable energy adoption and lower energy costs for Australians. For a comprehensive overview of available support, businesses can refer to our guide on Australian Energy Rebates in 2026: Your State-by-State Guide After Federal Relief Ends.
Furthermore, the announcement signals a growing emphasis on decentralised energy generation, empowering more entities to become active participants in the energy market. For community-based projects, this expansion could also complement existing initiatives, as detailed in our guide on Community Solar in Australia 2026: $2,800 Rebates & How to Join (State-by-State Guide).
Choosing the right energy provider and understanding billing structures will also become increasingly important as businesses maximise the benefits of their larger solar installations. Our guide, Choosing Your Australian Energy Provider in 2026: A Definitive Guide, offers valuable insights into navigating the energy market.
This expansion of the SRES is a significant step towards unlocking Australia’s vast commercial rooftop solar potential, promising both environmental benefits and substantial economic relief for businesses across the country.