Australian businesses and farms are now eligible for significant upfront discounts on solar photovoltaic (PV) systems up to 1 megawatt (MW), following the federal government’s expansion of the Small-scale Renewable Energy Scheme (SRES) which officially commenced on 1 October 2026. This policy adjustment targets the “missing middle” of Australia’s solar transition, offering an estimated 20% reduction on installation costs for eligible commercial and industrial (C&I) rooftops nationwide.
The expanded SRES now allows systems between 100 kilowatts (kW) and 1 MW to generate Small-scale Technology Certificates (STCs), a mechanism previously capped at 100 kW. This change could translate into substantial savings, with government estimates suggesting a discount of approximately AUD 68,000 for a 250 kW solar system and up to AUD 232,000 for an 850 kW system. The Clean Energy Regulator (CER) has confirmed that while the legislative amendments apply to eligible mid-scale solar systems installed from 1 October 2026, applications for STCs under the expanded scheme are expected to open in mid-to-late November 2026.
Unlocking the ‘Missing Middle’ of Australian Solar
Federal Energy Minister Chris Bowen initially announced the SRES expansion in August 2026, highlighting its role in addressing the “missing middle” in Australia’s energy transition. While residential rooftop solar adoption in Australia is among the highest globally, with over 4.5 million homes and small businesses now equipped with solar, the commercial and industrial sector has seen slower uptake for larger systems due to the previous 100 kW cap.
“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.” – Federal Energy Minister Chris Bowen
The government estimates that C&I and agricultural rooftops hold an untapped potential of over 80 gigawatts (GW) of solar energy capacity. This expansion aims to leverage that potential, allowing a broader range of businesses—including warehouses, factories, schools, retail centres, and farms—to significantly reduce their electricity costs and reliance on volatile fossil fuel prices.
How the Expanded SRES Works for Businesses
The SRES operates by creating Small-scale Technology Certificates (STCs) for eligible renewable energy systems. Instead of receiving a direct cash rebate, installers typically claim these STCs on behalf of the customer and pass on the value as an upfront discount on the system’s purchase price.
Under the new rules, eligible mid-scale solar systems (100 kW to 1 MW) will benefit from a fixed five-year deeming period for STC creation. This provides greater certainty for businesses investing in larger systems compared to the annual step-down that applies to smaller systems as the scheme approaches its scheduled end in 2030.
| System Size (kW) | Previous SRES Eligibility | New SRES Eligibility (from Oct 1, 2026) |
|---|---|---|
| < 100 kW | Eligible for STCs | Remains eligible for STCs |
| 100 kW - 1 MW | Large-scale Generation Certificates (LGCs) | Newly eligible for STCs (fixed 5-year deeming) |
| > 1 MW | Large-scale Generation Certificates (LGCs) | Remains under LGC scheme |
While the SRES expansion offers a substantial financial incentive, businesses should note that the application process for STCs for mid-scale systems will not be open until mid-to-late November 2026. This allows the Clean Energy Regulator time to implement the necessary systems and processes. Projects installed from 1 October are eligible, provided they meet all scheme requirements, including using accredited products and installers, and having appropriate approvals and grid connection arrangements.
Broader Impact and Continued Solar Growth
The SRES expansion comes amidst a period of record growth for solar energy in Australia. Just this month, on 11 October 2026, Australia’s rooftop solar installations set a new instantaneous power record in the National Electricity Market (NEM), reaching 17,488 MW at noon. This milestone underscored the rapidly increasing contribution of distributed solar to the national grid.
Furthermore, recent Clean Energy Regulator data shows that Australia’s solar financial investment decisions (FIDs) reached a record 3.5 GW in 2026, with an additional 894 MW of rooftop solar capacity installed in the third quarter alone. This robust growth highlights Australia’s strong commitment to renewable energy targets, aiming for 82% renewables by 2030.
Businesses considering solar installation should consult with Clean Energy Council (CEC) accredited installers to understand their specific eligibility and maximum potential savings. The combination of federal incentives, and in some cases, state-level programs, can significantly improve the return on investment for commercial solar projects. For those looking to further reduce their energy bills and embrace renewable energy, exploring options like highly efficient solar panels and understanding available Australian energy rebates can be beneficial. Businesses planning to electrify their operations may also find value in assessing the real cost to electrify a home in Australia 2026 as a benchmark, though C&I projects will have different scale and complexity.
This federal initiative is set to accelerate the deployment of mid-scale solar, helping businesses not only cut operational costs but also contribute to Australia’s broader clean energy future. The focus on commercial rooftops complements the existing strong residential uptake, pushing Australia closer to its renewable energy goals. For more information on selecting the right system for your needs, consider reviewing guides on Best Solar Panels in Australia 2026.