Australian businesses, farms, and community organisations are set to significantly reduce their upfront solar installation costs, with the federal government’s expanded Small-scale Renewable Energy Scheme (SRES) now officially in effect from 1 October 2026. The landmark change extends eligibility for Small-scale Technology Certificates (STCs) to solar photovoltaic (PV) systems up to 1 megawatt (MW), a tenfold increase from the previous 100-kilowatt (kW) limit. This reform is projected to cut installation costs for eligible mid-scale solar systems by approximately 20 per cent, potentially saving businesses hundreds of thousands of dollars.
Previously, solar systems larger than 100 kW were excluded from the SRES, forcing businesses to either cap their installations at 99.9 kW to qualify for STCs or pursue the more complex Large-scale Renewable Energy Target (LRET) scheme. This created a ‘missing middle’ for commercial and industrial solar, where larger roofs capable of significant generation were underutilised due to a lack of direct financial incentive.
“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
The Clean Energy Regulator (CER) confirmed the legislative amendments to the Renewable Energy (Electricity) Regulations 2001, stating that systems installed from 1 October 2026 are now eligible. While applications for STCs under the expanded scheme are expected to open in mid-to-late November as the CER updates its systems, eligible projects can apply retrospectively.
Significant Upfront Savings for Commercial Operations
The financial impact of this SRES expansion is substantial for businesses with significant daytime electricity demand. The 20 per cent cost reduction translates to tens of thousands, or even hundreds of thousands, of dollars in upfront savings, depending on the system size. For instance, the government has indicated that a 250 kW system could see an upfront discount of around $68,000 AUD, while an 850 kW system could save a business over $232,000 AUD.
These savings are delivered through STCs, which are typically assigned to the installer in exchange for a point-of-sale discount on the system’s total cost. The value of STCs fluctuates with market demand, but the underlying mechanism ensures a tangible reduction in capital outlay for businesses.
To illustrate the potential savings, consider these indicative figures based on a 20 per cent reduction on typical installed costs for commercial systems:
| System Size (kW) | Estimated Installed Cost (AUD, before STCs) | Indicative STC Discount (AUD) | Net Cost (AUD, after STCs) |
|---|---|---|---|
| 100 | $100,000 - $150,000 | $20,000 - $30,000 | $80,000 - $120,000 |
| 250 | $250,000 - $375,000 | $50,000 - $75,000 | $200,000 - $300,000 |
| 500 | $500,000 - $750,000 | $100,000 - $150,000 | $400,000 - $600,000 |
| 850 | $850,000 - $1,275,000 | $170,000 - $255,000 | $680,000 - $1,020,000 |
| 1000 (1 MW) | $1,000,000 - $1,500,000 | $200,000 - $300,000 | $800,000 - $1,200,000 |
Note: These figures are indicative and vary based on system components, installation complexity, geographic location (STC zones), and the prevailing STC market price. Businesses should obtain specific quotes from accredited installers.
Eligibility and Deeming Period
For eligible mid-scale solar systems (100 kW to 1 MW), a key feature of the expanded SRES is a fixed five-year deeming period for STC creation. This provides greater certainty for businesses compared to the declining deeming period for smaller systems as the SRES approaches its scheduled end in 2030. Systems must meet all installer and product accreditation requirements, comply with state and Commonwealth planning regulations, electrical safety standards, and network connection agreements.
Businesses now have a choice of certificate pathways: applying for STCs under the SRES, operating as an accredited power station under the LRET to earn Large-scale Generation Certificates (LGCs), or participating in the Renewable Electricity Guarantee of Origin (REGO) scheme. The Clean Energy Regulator advises participants to carefully consider which pathway best suits their project, as participation in one scheme may affect eligibility under others.
Broader Economic and Environmental Benefits
This policy adjustment is not merely about financial incentives; it addresses a crucial gap in Australia’s renewable energy transition. By making larger commercial and industrial rooftop solar more accessible, the government aims to boost productivity and competitiveness across various sectors, including manufacturing, agriculture, retail, transport, and logistics. Lower energy costs reduce operational overheads, which can flow through to lower prices for goods and services, benefiting households across the country.
Furthermore, the increased deployment of mid-scale solar contributes significantly to Australia’s renewable energy targets and helps reduce the nation’s reliance on fossil fuels. This move aligns with broader efforts to electrify homes and businesses, reducing exposure to volatile international energy prices. For insights into personal energy savings, consider exploring guides such as Electrify Your Home in 2026: Real Costs, Rebates & Savings Up to $15,000+ or Navigating Australia’s Energy Bill Relief and Support in 2026: A Comprehensive Guide.
This expansion of the SRES for mid-scale solar marks a pivotal moment for Australian businesses, unlocking significant financial incentives and accelerating the uptake of clean energy across the commercial and industrial landscape. Businesses considering larger solar installations should engage with accredited installers to understand their specific eligibility and maximise the benefits of this new policy. For further information on available support, refer to Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia.