Australian businesses and agricultural enterprises are set to unlock significant upfront savings on solar installations from October 1, 2026, with the federal government expanding eligibility under the Small-scale Renewable Energy Scheme (SRES). The change, announced on August 5, 2026, will extend Small-scale Technology Certificate (STC) eligibility to solar photovoltaic (PV) systems up to 1 megawatt (MW) in capacity, a dramatic increase from the previous 100-kilowatt (kW) limit.
This policy shift aims to address the “missing middle” in Australia’s solar transition, a segment where commercial, industrial, and agricultural facilities have faced limited incentives for larger installations. Federal Energy Minister Chris Bowen highlighted that while one in three Australian homes boast rooftop solar, larger energy users have been largely excluded from similar direct financial support.
“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 100 kW. We’re fixing that by expanding support to systems up to 1 MW, unlocking the potential of commercial rooftops and helping businesses cut power bills, invest in growth and create jobs.”
Currently, systems larger than 100 kW are only eligible for Large-scale Generation Certificates (LGCs), which offer a less immediate and often less attractive financial benefit compared to STCs. The expansion means that new installations and expansions of existing systems up to 1 MW will now qualify for upfront, deemed STCs, directly reducing the capital outlay for businesses.
Significant Savings for Commercial Solar
The financial impact for eligible businesses is substantial. Government estimates suggest that the expanded SRES could reduce the installation costs of a solar system for commercial, industrial, and agricultural rooftops by approximately 20%. Specifically, a 250 kW solar system could see a discount of around AUD 68,000, while an 850 kW system could benefit from a reduction of approximately AUD 230,000.
This represents a critical incentive for businesses grappling with rising energy costs and looking to enhance their sustainability credentials. The Clean Energy Regulator (CER) confirms that applications for the expanded scheme are expected to open in mid-to-late November 2026, once the necessary systems and processes are in place.
The “Missing Middle” Opportunity
Australia leads the world in household solar uptake, with around 40% of homes now featuring rooftop PV. However, the commercial and industrial sector has lagged, with data from the Institute for Energy Economics and Financial Analysis (IEEFA) indicating only 5.6 GW of business solar installed compared to 22 GW residential. This disparity underscores the untapped potential in the mid-scale commercial segment. Minister Bowen estimates that installing solar on commercial and industrial rooftops, along with agricultural facilities, could contribute an additional 80 GW of solar energy to the grid.
The shift to STCs for mid-scale systems provides a more accessible and predictable financial mechanism. Unlike LGCs, which are typically traded in a more complex market, STCs are usually assigned to the installer, who then passes on the value as an upfront discount to the customer. This simplifies the process and makes the financial benefit immediately tangible for businesses.
How STCs Work for Businesses
Small-scale Technology Certificates (STCs) are electronic certificates generated under the SRES. One STC is equivalent to one megawatt-hour (MWh) of renewable electricity generated or displaced by an eligible system. The number of STCs a system can create depends on its geographical location, installation date, and the amount of electricity it is deemed to generate over its lifetime (up to 10 years for solar PV).
For businesses considering this opportunity, understanding the eligibility requirements is crucial. Systems must be installed by Clean Energy Council (CEC) accredited installers using approved products. This ensures quality, performance, and consumer protection. Businesses should seek detailed quotes that clearly outline the STC discount applied to their total system cost.
| System Size (kW) | Estimated STC Discount (AUD) |
|---|---|
| 250 | ~$68,000 |
| 850 | ~$230,000 |
Note: These figures are government estimates for cost reduction and actual savings may vary based on STC market price and system specifics.
Broader Implications for the Energy Market
The expansion of the SRES is expected to accelerate carbon abatement by boosting renewable electricity generation across the country. It also aligns with broader efforts to improve grid stability and potentially lower electricity prices by increasing the supply of clean energy.
For businesses that have already invested in smaller rooftop solar systems, this change could present an opportunity to expand their existing installations and further reduce their reliance on grid electricity. Those considering a larger energy transition might also explore integrating battery storage solutions. While STCs for batteries have recently seen some adjustments to their calculation rates, they remain a valuable incentive for energy independence. For more information on optimising your energy usage, consider exploring Best Home Energy Management Systems in Australia 2026: Slash Bills by $1,000+ Annually or learning about Maximise Your Home Battery Savings: Earn $1,000+ Annually with a VPP in 2026.
The federal government is also considering additional design, installation, and compliance requirements for these newly eligible mid-scale solar PV systems to ensure integrity and safety within the expanded scheme. Businesses are advised to consult with accredited solar providers to understand how these changes will specifically impact their potential projects and to ensure compliance with all regulatory requirements once they are finalised.
This significant federal policy adjustment provides a clear financial impetus for Australia’s commercial and agricultural sectors to embrace larger-scale solar, driving down operational costs and contributing to the nation’s renewable energy targets.