Businesses Could Unlock 20% Solar Discount from October 1: SRES Expands to 1 MW

Australian businesses, farms, and community organisations are set to benefit from a significant reduction in solar installation costs, with the federal government expanding eligibility for the Small-scale Renewable Energy Scheme (SRES) to systems up to 1 megawatt (MW). Announced on August 5, 2026, this policy change, effective from October 1, 2026, aims to cut the cost of installing medium-sized solar systems by approximately 20 per cent.

Previously, only solar photovoltaic (PV) systems up to 100 kilowatts (kW) were eligible for Small-scale Technology Certificates (STCs), the financial incentive under the SRES. Larger systems, generally those between 100 kW and 1 MW, were left in a ‘missing middle’, often too small for the Large-scale Renewable Energy Target’s (LRET) Generation Certificates (LGCs) and too large for STCs. This created a barrier for many commercial and industrial entities looking to significantly offset their energy consumption with solar.

Unlocking Commercial Rooftop Potential

The expansion of the SRES means that businesses, farms, and community facilities can now install solar systems up to ten times larger than previously eligible, better matching their substantial energy needs. This move is expected to unlock the vast potential of large commercial rooftops and agricultural land for clean energy generation.

“While Australia’s residential solar is sitting at 22 gigawatts, businesses have only installed around 5.6 gigawatts, with most of this being rooftop solar systems below 100 kW in size.”

The federal government indicates that these lower energy costs will enhance productivity and competitiveness across various sectors, including manufacturing, agriculture, retail, transport, and logistics. The benefits are expected to flow through to households via reduced costs of goods and services. Furthermore, increased energy generation at the point of use is anticipated to benefit the broader grid by reducing network strain and smoothing out demand peaks.

How the Expanded SRES Works for Mid-Scale Solar

Under the revised scheme, solar PV systems with a total onsite capacity between 100 kW and 1 MW will be eligible to create STCs. An STC represents one megawatt-hour (MWh) of renewable electricity generated or displaced by an eligible system. These certificates can then be sold, often through an installer who provides an upfront discount on the system cost, or traded on the open market.

Crucially, the STC factor for these newly eligible mid-scale solar systems will be based on a five-year deeming period each year up to 2030, differing from the annual step-down applied to smaller residential systems. This provides a more stable and predictable incentive for larger installations.

For businesses planning installations, it’s important to note that while the changes apply to systems installed from October 1, 2026, applications for these expanded STCs will not open until mid to late November 2026, with assessment commencing after this period.

Impact on the Australian Solar Landscape

This policy adjustment is a strategic move to accelerate Australia’s renewable energy transition, particularly for the commercial and industrial sectors which have lagged behind residential solar uptake. Currently, residential solar accounts for 22 gigawatts (GW) of capacity, while businesses have installed approximately 5.6 GW, predominantly in systems under 100 kW.

The expanded SRES is expected to be budget-neutral and will contribute to Australia’s overall renewable energy capacity, which is already putting downward pressure on wholesale electricity prices. For instance, wholesale prices saw a 47% reduction in the most recent quarter.

Businesses considering a solar installation now have a compelling financial incentive to scale up their systems beyond the previous 100 kW limit. This could significantly reduce their operational costs and contribute to national emissions reduction targets. Understanding the details of Solar System Installation Costs in Australia 2026: A Complete Guide will be crucial for businesses looking to capitalise on this expanded rebate.

Furthermore, the government is also working to improve network connection processes for mid-scale solar projects through targeted rule changes and enhancements to existing frameworks, addressing another historical hurdle for larger installations.

For those looking at their broader energy strategy, combining solar with battery storage can further enhance savings and resilience. While this specific SRES expansion focuses on solar PV, the overall Australia’s Energy Bill Relief Landscape in 2026: A Comprehensive Guide to State and Federal Support highlights various programs that can be leveraged.

What This Means for Your Business

If your business, farm, or community organisation has high energy consumption and sufficient roof space or land, installing a solar system between 100 kW and 1 MW is now considerably more attractive. The 20% cost reduction through STCs represents a substantial upfront saving, shortening payback periods and improving return on investment. Engaging with accredited solar designers and installers will be essential to ensure compliance and maximise the benefits of this expanded scheme. For guidance on choosing appropriate panels for larger-scale applications, insights from resources like Best Solar Panels for Australian Homes 2026: Efficiency, Warranty & Performance Compared can offer a starting point, even if tailored for residential use, due to the underlying technology principles.

This policy change signals a strong commitment from the Australian Government to support the ‘missing middle’ of the solar market, fostering greater energy independence and sustainability for a wider range of Australian enterprises.