Australian businesses, farms, and community facilities are set to benefit from significant upfront cost reductions on solar installations, following the expansion of the federal Small-scale Renewable Energy Scheme (SRES) to cover systems up to 1 megawatt (MW). The policy change, which took effect on October 1, 2026, extends incentives previously limited to installations under 100 kilowatts (kW), with the Federal Government estimating a potential 20 per cent reduction in the upfront cost for eligible mid-scale solar projects.
This week, the Clean Energy Regulator (CER) confirmed that the amended Renewable Energy (Electricity) Regulations 2011 now apply to eligible mid-scale solar systems installed from October 1, 2026. While applications for the expanded scheme are expected to open in mid-to-late November 2026, systems installed from the start of this month will be eligible to apply.
How the Expanded SRES Works for Larger Systems
The SRES operates through the creation of Small-scale Technology Certificates (STCs). When an eligible solar system is installed, it generates a certain number of STCs, which can then be sold or assigned to an installer, effectively reducing the upfront purchase price of the system. Historically, this mechanism has been a cornerstone of Australia’s residential and small business solar uptake.
The key change is the increased eligibility threshold. Previously, only solar photovoltaic (PV) systems up to 100 kW were supported by the SRES. Now, systems between 100 kW and 1 MW are included. For these newly eligible mid-scale systems, the Clean Energy Regulator has confirmed a fixed five-year deeming period for certificate creation.
This expansion is projected to significantly improve the financial viability of larger rooftop installations for a broad range of commercial energy users, including farms, factories, schools, warehouses, and community facilities.
“We’ve seen what rooftop solar can do for household bills. We want more businesses to get those benefits too, from farms and factories to shops and warehouses.” — Minister for Climate Change and Energy, Chris Bowen.
Substantial Savings for Businesses
The estimated 20 per cent reduction in upfront costs translates into substantial savings for businesses considering larger solar arrays. For example, a 250 kW commercial solar system could see an illustrative STC discount of approximately $68,000, based on current STC market values.
As of October 2, 2026, STCs were trading flat at around $39.85, demonstrating the consistent value these certificates provide. This discount directly offsets a significant portion of the installation cost, making the return on investment (ROI) more attractive for commercial entities with high daytime electricity demand.
Impact on the Australian Energy Landscape
Minister Bowen highlighted that lowering energy costs through increased solar adoption would enhance productivity and competitiveness across various sectors, from manufacturing and agriculture to retail and logistics, with flow-on benefits for households.
The policy also signals a continued shift in Australia’s renewable energy strategy, moving beyond just residential rooftops to leverage the vast potential of commercial and industrial building spaces. This is crucial for strengthening grid stability and reducing reliance on volatile fossil fuel prices.
While the application process for the expanded scheme is still being finalised by the Clean Energy Regulator, businesses are encouraged to begin assessing their eligibility and planning installations. Systems must meet SRES installer and product accreditation requirements, as well as relevant state and territory planning and electrical safety regulations.
For more information on available incentives, businesses can refer to comprehensive guides on energy rebates, including Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia. Understanding the full spectrum of support available can help maximise savings and accelerate the transition to cleaner energy. Businesses looking to electrify their operations may also find value in consulting resources like Navigating Australia’s Energy Bill Relief and Support in 2026: A Comprehensive Guide to understand broader energy cost management strategies.
Example Cost Reduction for Commercial Solar Systems
To illustrate the potential savings, consider the following for eligible systems:
| System Size (kW) | Estimated Gross Project Cost (AUD) | Illustrative STC Discount (AUD) | Net Upfront Cost (AUD) |
|---|---|---|---|
| 100 kW | $100,000 - $150,000 | $20,000 - $30,000 | $80,000 - $120,000 |
| 250 kW | $250,000 - $375,000 | $50,000 - $75,000 | $200,000 - $300,000 |
| 500 kW | $500,000 - $750,000 | $100,000 - $150,000 | $400,000 - $600,000 |
| 1 MW | $1,000,000 - $1,500,000 | $200,000 - $300,000 | $800,000 - $1,200,000 |
Note: These figures are illustrative based on a 20% average cost reduction and typical project costs. Actual savings will vary depending on system specifics, geographical location, installer pricing, and the fluctuating STC market price.
This policy update provides a timely opportunity for a wider range of Australian businesses to invest in renewable energy, reducing operational costs and contributing to the nation’s clean energy transition.
What to Consider Before Installation
Businesses should engage with Clean Energy Council (CEC) accredited installers and ensure all products are on the CEC approved lists. Understanding the specifics of network connection agreements and state-level requirements will also be crucial for a smooth installation process. While the financial benefits are clear, optimising system design, including considerations for N-Type vs. P-Type solar panels, can further enhance long-term performance and savings. For more detailed technical considerations, articles such as N-Type vs. P-Type Solar Panels in Australia 2026: Unlock $1,000+ Extra Savings Annually can provide valuable insights.
The expansion of the SRES is a significant step towards enabling more Australian businesses to harness solar power, bolstering economic resilience and accelerating the country’s clean energy future.