Australian businesses, farms, and community organisations are set to unlock significant upfront savings on rooftop solar installations, with the federal government announcing a major expansion of the Small-scale Renewable Energy Scheme (SRES). From 1 October 2026, solar photovoltaic (PV) systems with a capacity between 100 kilowatts (kW) and 1 megawatt (MW) will become eligible for Small-scale Technology Certificates (STCs), a move expected to cut installation costs by approximately 20 per cent.
The announcement, made on 5 August 2026 by Minister for Climate Change and Energy Chris Bowen, addresses what the government has termed the “missing middle” in Australia’s solar uptake. While residential rooftop solar boasts around 22 gigawatts (GW) of capacity, commercial rooftop installations currently sit at only 5.6 GW, despite an estimated 80 GW of available commercial roof space. This policy change aims to bridge that gap by making larger commercial systems more financially viable.
Previously, solar systems exceeding 100 kW were relegated to the Large-scale Renewable Energy Target (LRET) and could only create Large-scale Generation Certificates (LGCs). LGCs are typically generated annually over the system’s operational life, offering a return that is less immediate and often more complex to manage than STCs. STCs, by contrast, provide an upfront, point-of-sale discount, significantly reducing the initial capital outlay for eligible installations.
Substantial Upfront Savings for Businesses
The expansion means that medium-sized solar projects, which often faced an awkward policy gap – too large for the SRES but too small for the utility-scale LRET mechanisms – will now benefit from the more accessible STC scheme. The government’s own estimates suggest the upfront discount will be around AUD $272 per kilowatt (kW) at current certificate prices.
“We’re putting more rooftops to work and helping businesses, farms and community organisations cut energy costs by slashing the cost of installing medium-sized solar systems by around 20 per cent.” — Minister for Climate Change and Energy Chris Bowen
For a typical 250 kW commercial solar system, this translates to an estimated upfront saving of approximately AUD $68,000. Larger systems will see proportionally greater savings. For instance, a 500 kW system could achieve around AUD $136,000 in upfront incentives.
Crucially, the government has also confirmed that STCs for these newly eligible commercial systems will retain their value through to the end of 2030, rather than diminishing year-on-year under the existing phase-down schedule. This provides much-needed certainty for businesses planning significant capital investments in solar infrastructure.
Impact and Implementation
The changes are intended to apply to solar PV systems installed from 1 October 2026, though this remains subject to the necessary regulations being formally put in place. The reform is expected to foster increased productivity and competitiveness across sectors such as manufacturing, agriculture, retail, transport, and logistics, with the benefits ultimately flowing through to households via lower prices for goods and services.
Furthermore, the policy aims to improve grid stability and reduce the need for expensive network upgrades by generating more electricity closer to where it is consumed. This will also enhance access to clean, reliable, and affordable solar energy for regional and remote areas, benefiting community groups, schools, hospitals, and farms.
SRES Eligibility Comparison: Before and After (from 1 Oct 2026)
| Feature | Current (Pre-Oct 2026) | New (From 1 Oct 2026, subject to regulation) |
|---|---|---|
| Maximum System Size | < 100 kW | < 1 MW |
| Eligible Certificates | Small-scale Technology Certificates (STCs) | Small-scale Technology Certificates (STCs) |
| Incentive Type | Upfront discount | Upfront discount |
| Target Segment | Residential, small business | Residential, small business, commercial, industrial, agriculture, community facilities |
| Cost Reduction | Varies | Approximately 20% on mid-scale systems |
Beyond the SRES expansion, Minister Bowen indicated that the Australian Energy Market Commission (AEMC) would be asked to streamline network connection processes for commercial and industrial solar applications, aiming for quicker and more efficient approvals.
This federal initiative complements existing state-level support for renewable energy adoption. Businesses considering solar should also investigate potential state-specific incentives, which can further reduce costs. For instance, information on broader energy bill relief and utility concessions can be found in our guide: Australian Energy Rebates in 2026: Your State-by-State Guide After Federal Relief Ends.
While the focus of this announcement is on solar PV, the broader push towards renewable energy also includes incentives for battery storage. For Australian households and businesses looking to maximise their solar investment by storing excess energy, our guide on Best Home Batteries in Australia 2026: Models, Costs & Up To $7,500 Rebates provides valuable insights into available rebates and options. The Clean Energy Regulator has noted a significant uptake in battery installations, with 71% of solar systems installed in Q1 2026 including a battery.
This policy shift marks a pivotal moment for Australia’s commercial and industrial sectors, enabling a broader range of organisations to participate in the renewable energy transition and directly benefit from lower energy costs. The coming months will see further details emerge as the necessary regulations are finalised, but the direction is clear: more Australian rooftops are set to go solar.