Australian businesses, farms, and community organisations are set to see significant reductions in solar installation costs, with the Albanese Government expanding the Small-scale Renewable Energy Scheme (SRES) to cover systems up to 1 megawatt (MW). Announced by Climate and Energy Minister Chris Bowen on August 5, 2026, this policy change, effective from October 1, 2026, aims to cut upfront installation expenses by approximately 20% for eligible medium-sized solar projects.
This expansion addresses what Minister Bowen termed Australia’s “missing middle” in the energy transition, recognising that while residential solar adoption is high, larger commercial and industrial rooftops remain largely untapped. Currently, the SRES scheme provides upfront incentives for systems up to 100 kilowatts (kW), which is sufficient for most homes but inadequate for the energy demands of many businesses.
Under the revised scheme, businesses installing systems between 100 kW and 1 MW will now qualify for Small-scale Technology Certificates (STCs), previously only available for smaller installations. This shift will provide a substantial financial incentive, bringing down the initial capital outlay.
“This reform will unlock more rooftop solar for the missing middle – helping more businesses take up solar and shield their energy bills from volatile global energy markets.” – Minister Chris Bowen.
Significant Savings for Commercial and Industrial Operations
The financial benefits for businesses are considerable. Government estimates suggest that a 250 kW solar system could see an upfront discount of around $68,000 on installation costs. Such a system could then generate approximately 345 megawatt-hours (MWh) of electricity annually, leading to potential annual electricity cost savings of around $50,000.
For larger operations, the savings escalate. An 850 kW system, suitable for a manufacturing facility or large retail complex, could receive an upfront discount of approximately $232,000. This larger installation would generate around 1,173 MWh annually, translating to potential yearly electricity bill reductions of roughly $175,000.
This move is expected to stimulate investment across various sectors, including manufacturing, agriculture, retail, transport, and logistics, ultimately improving their productivity and competitiveness. The Institute for Energy Economics and Financial Analysis (IEEFA) highlights the vast potential, estimating over 80 gigawatts (GW) of commercial rooftop solar capacity across Australia, with only about 5.6 GW currently installed.
Broader Benefits for the National Electricity Market
The expansion of the SRES is not only designed to benefit individual businesses but also to contribute to broader energy security and grid stability. By increasing distributed generation, more energy will be produced closer to where it’s consumed, reducing reliance on expensive network infrastructure and smoothing out demand peaks for all energy users.
Furthermore, the Clean Energy Council has welcomed this incentive, noting that increased deployment of commercial and industrial solar will help put downward pressure on wholesale electricity prices. This aligns with the broader trend of moderating electricity prices across the National Electricity Market (NEM), where average spot prices fell 29.3% year-on-year to $76.85/MWh in July 2026.
The government will also work with energy regulators and network businesses to streamline and accelerate connection approvals for these larger rooftop solar systems, addressing a historical barrier for commercial installations.
Australia has seen remarkable success in residential solar, with approximately 40% of homes now equipped with rooftop panels, contributing around 22 GW of capacity. This new policy aims to replicate that success in the commercial sector, leveraging Australia’s abundant solar resources to deliver tangible cost savings and advance the nation’s clean energy transition.
For businesses seeking to understand their options for energy savings, exploring available government support is crucial. While this new scheme targets solar installations, other forms of energy relief and concessions may also be available. Readers can find more information on broader support programs in our comprehensive guide: Australian Energy Rebates in 2026: Your State-by-State Guide After Federal Relief Ends.
This expansion of the SRES for commercial solar is a significant step towards enabling more Australian enterprises to take control of their energy costs and contribute to a more resilient and sustainable energy future. Businesses should begin assessing their eligibility and planning installations to capitalise on these new incentives from October 1, 2026.
How the Expanded SRES Benefits Businesses
The expanded SRES will allow businesses, farms, and community organisations to install larger solar systems while receiving upfront financial incentives. Below is a comparison of potential savings:
| System Size (kW) | Estimated Upfront Discount (AUD) | Estimated Annual Electricity Savings (AUD) |
|---|---|---|
| 250 | $68,000 | $50,000 |
| 500 | $136,000 | $100,000 (estimated based on 250kW) |
| 850 | $232,000 | $175,000 |
Note: Annual electricity savings are estimates based on typical generation and current electricity rates. Actual savings may vary based on usage patterns, location, and specific energy tariffs.