Commercial Solar Rebates Expanded to 1MW: What Businesses Need to Know

From 1 October 2026, eligible commercial solar installations of up to 1MW are expected to gain access to the Small-scale Renewable Energy Scheme, commonly known as the SRES.

The current limit is 100kW.

That means the scheme is being expanded tenfold, opening the upfront solar discount to significantly larger systems installed on factories, warehouses, farms, schools, shopping centres, offices and other commercial properties.

The Government says the change could reduce the upfront installation cost of eligible systems by around 20%.

For some businesses, that could mean saving tens—or even hundreds—of thousands of dollars before the system produces its first unit of electricity.

It is a significant announcement.

But it is also important to understand what it does—and does not—mean.

The new rules will not make every commercial building suitable for a 1MW solar system. They will not guarantee every project a 20% discount. And they will not remove the need to assess electricity use, roof condition, network capacity and project economics.

Here is what Australian businesses need to know.

The Government plans to increase the maximum solar system size eligible under the Small-scale Renewable Energy Scheme from 100kW to 1MW.

The expanded scheme is expected to commence on 1 October 2026.

Under the current rules, an eligible solar PV system generally needs to be no larger than 100kW to create Small-scale Technology Certificates, or STCs.

These certificates have a financial value and are usually converted into an upfront discount on the solar installation.

Systems above 100kW typically fall under the Large-scale Renewable Energy Target and may create Large-scale Generation Certificates, or LGCs.

Unlike STCs, which are generally provided upfront based on forecast generation, LGCs are created progressively based on the electricity the system actually generates.

The change is designed to bring medium-sized commercial solar projects into the simpler upfront incentive model.

The Smart Energy Council says new installations and expansions of existing systems up to 1MW will be eligible for upfront deemed certificates. It also says systems between 100kW and 1MW will retain a five-year deeming period through to 31 December 2030.

That detail could make the incentive more predictable for businesses planning projects over the next several years.

However, final regulations and Clean Energy Regulator guidance will still need to confirm exactly how the expanded scheme will operate.

The Government has said the expanded incentive could reduce the upfront cost of eligible commercial solar installations by around 20%.

Two examples were included in the announcement.

These figures are estimates, not guaranteed outcomes.

The final upfront discount will depend on factors including:

• The completed scheme rules.
• The size of the system.
• The installation location.
• The applicable STC calculation.
• Certificate market values.
• The timing of installation.
• Whether the project satisfies all eligibility requirements.

The annual electricity savings will depend on how much solar power the business can use on site.

A business that consumes most of its solar generation during the day is likely to save more than one that exports large amounts of electricity to the grid at a lower rate.

So while the rebate may reduce project cost, the electricity-use profile still determines whether the investment stacks up.

Australia has installed a remarkable amount of rooftop solar on homes.

Commercial and industrial rooftops have not kept pace.

Factories, warehouses, farm sheds and large commercial buildings often have substantial roof space but comparatively little solar installed.

This section of the market has been described as Australia’s solar “missing middle”.

A 300kW or 500kW rooftop installation is much larger than a residential system, but it is still very different from a utility-scale solar farm.

Until now, these projects have sat awkwardly between the small-scale and large-scale certificate schemes.

The 100kW limit also created some unusual outcomes.

A business may have had enough daytime electricity use and roof space to support a 250kW system, but installed a system just under 100kW because the incentive was simpler.

In other cases, larger projects were delayed, divided into stages or abandoned altogether.

The Smart Energy Council has argued that outdated incentive limits, network delays and other barriers have suppressed investment in commercial and industrial solar. Its research identified substantial unused generation potential across Australian business rooftops.

Raising the SRES limit should allow more projects to be designed around the business’s actual electricity requirements rather than an arbitrary certificate threshold.

The change is most relevant to businesses considering commercial solar systems between 100kW and 1MW.

Potential beneficiaries include:

• Manufacturers.
• Warehouses and distribution centres.
• Farms and agricultural operations.
• Cold-storage facilities.
• Shopping centres and large retailers.
• Schools and education campuses.
• Hospitals and health facilities.
• Sporting and community facilities.
• Office buildings.
• Food-processing businesses.
• Hotels and large hospitality venues.

The strongest commercial solar projects generally have:

• Consistent daytime electricity consumption.
• A suitable roof or available land.
• High electricity costs.
• A long-term interest in the property.
• Sufficient network capacity.
• Few major shading or structural issues.

A food-processing plant operating throughout the day may be an excellent candidate.

A large warehouse used mainly for passive storage may have plenty of roof space but comparatively little electricity demand.

The size of the roof is only part of the equation.

No.

The announcement says the expanded scheme could reduce installation costs by around 20%, but businesses should not treat that as a guaranteed rebate on every commercial solar quote.

The actual discount may vary.

Eligibility will depend on the final rules, the installed system and how the certificate calculation is applied.

Businesses should also distinguish between:

• The upfront solar incentive.
• The total project cost.
• The annual electricity saving.
• The project’s financial return.

For example, two businesses may each install a 500kW system and receive a similar upfront incentive.

One may consume almost all the solar electricity on site.

The other may export half of it at a much lower value.

The first project is likely to produce a stronger return, even if the installed capacity and upfront rebate are the same.

For businesses considering systems between 100kW and 1MW, it may be worth planning around the new commencement date.

The potential difference in upfront support could be significant.

However, waiting until October to begin the entire process would be a mistake.

Commercial solar projects often require months of preparation.

Businesses can begin now by:

• Gathering electricity bills and interval data.
• Reviewing energy tariffs.
• Inspecting the roof.
• Assessing structural capacity.
• Reviewing switchboards and transformers.
• Starting network enquiries.
• Preparing preliminary system designs.
• Considering finance options.
• Seeking landlord or board approval.
• Reviewing planned business expansion or electrification.

By starting early, a business may be in a position to proceed once the final scheme rules are available.

Eligible systems below 100kW already have access to STCs under the existing scheme.

A business planning a 50kW or 99kW system should not automatically delay the project because of this announcement.

The new change is primarily significant for projects larger than the current 100kW limit.

The existing SRES already reduces the cost of most eligible residential and small-business rooftop solar systems.

Not necessarily.

Businesses should compare the possible additional incentive against the cost of delaying electricity savings.

Suppose a proposed system is expected to save $15,000 a month.

Delaying the installation by four months could mean giving up approximately $60,000 in electricity savings.

If waiting produces an additional upfront incentive of $100,000, that may still be worthwhile.

If the difference is only $20,000, proceeding earlier may produce the better outcome.

Other factors may include:

• Existing equipment pricing.
• Finance costs.
• Construction availability.
• Network approval timing.
• Roof works.
• Operational shutdown periods.
• Expiry of an existing quotation.

There is no single answer for every project.

Businesses with projects already underway should ask their provider to model both scenarios rather than assuming waiting is automatically better.

The announced changes are expected to include expansions of existing solar installations, provided the total system remains within the new 1MW limit and satisfies the final eligibility requirements.

This could be particularly valuable for businesses that previously installed a system near the 100kW threshold.

For example, a factory with an existing 99kW system may now be able to consider a larger expansion aligned with its actual electricity use.

However, expansion is not simply a matter of adding more panels.

The project may still require:

• Network approval.
• Updated export controls.
• Switchboard or transformer upgrades.
• New inverters.
• Structural assessment.
• Revised monitoring.
• Confirmation of how the existing and new systems are treated under the scheme.

Businesses should wait for final guidance before assuming a specific expansion will qualify.

It means businesses can consider larger systems without losing access to the simpler upfront incentive.

That is not the same as saying every business should install the largest system its roof can hold.

The best system size depends on:

• Daytime electricity consumption.
• Weekend and seasonal use.
• Export limits.
• Electricity tariffs.
• Future expansion.
• EV charging plans.
• Battery storage.
• Roof space and condition.
• Network capacity.
• Available capital.

A larger solar system produces more electricity.

But if much of that electricity cannot be used or exported economically, the additional panels may provide a weaker return.

The expanded rebate should allow businesses to choose a system based on their energy requirements rather than stopping at 100kW.

It should not become an excuse to oversize projects.

Network approval remains one of the biggest issues for commercial solar projects.

A large solar system can send substantial amounts of electricity back into the local grid.

The electricity distributor needs to assess whether the network can safely accommodate that power.

Depending on the location and system size, a business may receive:

• Full export approval.
• A limited export allowance.
• Zero-export approval.
• Dynamic export requirements.
• Additional protection requirements.
• A requirement for network or transformer upgrades.

The Government has acknowledged that slow network approvals have caused some businesses to abandon solar projects and has called for the process to be improved.

That is welcome.

But expanding the rebate does not automatically increase local network capacity.

A business should still investigate likely export conditions early in the project.

The announcement provides the broad direction, but several details remain subject to final regulations and guidance.

These may include:

• The exact eligibility requirements.
• How system capacity will be measured.
• The final STC calculation.
• Transitional arrangements.
• Treatment of projects contracted before 1 October.
• Treatment of projects installed before but commissioned after the commencement date.
• How staged installations will be handled.
• How expansions to existing systems will qualify.
• Equipment and installer requirements.
• Application and certificate-creation processes.

Until those details are released, any project-specific rebate estimate should be treated as indicative.

Businesses should be particularly cautious of providers using the announcement to promise an exact discount before the final rules are known.