On 5 August, the Hon. Chris Bowen, Minister for Climate Change and Energy, announced at the National Press Club that the Small-scale Renewable Energy Scheme (SRES) eligibility threshold will rise from 100kW to 1MW. The change takes effect from 1 October 2026, subject to the necessary regulations being in place. Both the Clean Energy Council and the Smart Energy Council have welcomed the reform.
For any business operating a warehouse, factory, cold store, distribution centre, shopping centre, hospital, school or farm, this is the most significant change to commercial solar economics in more than a decade.
What actually changed
Until now, systems up to 100kW created Small-scale Technology Certificates (STCs) — paid upfront, at installation, as a discount off the system price. Anything above 100kW dropped into the large-scale market, creating Large-scale Generation Certificates (LGCs) annually based on metered output, with the registration, compliance and accreditation burden that comes with it.
That 100kW line has been the single biggest brake on commercial rooftop solar in Australia. The evidence is in the install data:
In other words, an entire decade and a half of mid-scale solar was suppressed to roughly what the sub-100kW market delivers in a single year. Businesses weren't sizing systems to their consumption — they were sizing them to a regulatory cut-off. From 1 October 2026, that cut-off moves to 1MW.
The numbers: what a business could save
The government has put the upfront discount at approximately 20% of installed cost, with worked examples including:
| System | Typical site | STC incentive, installed 2026 | Installed 2027 | Difference |
|---|---|---|---|---|
| 250kW | Medium retailer, café group, small manufacturer | ~$68,000 | ~$54,400 | −$13,600 |
| 500kW | Aged care campus, supermarket, cold store | ~$136,000 | ~$108,800 | −$27,200 |
| 850kW | Manufacturing plant, large retail complex, logistics warehouse | ~$232,000 | ~$185,600 | −$46,400 |
The third and fourth columns are the part worth pausing on, and we explain them below. The government's worked examples run at roughly $272 per kW installed, which is a reasonable rule of thumb for estimating your own site before any modelling is done.
Because the incentive runs through the existing STC mechanism, it arrives as a point-of-sale discount — not a grant application, not a competitive funding round, not a post-installation rebate. There is no new program to apply to and no new bureaucracy, which matters for procurement teams and CFOs assessing payback and internal approval pathways.
Why this is a "missing middle" problem
The gap isn't roof space and it isn't technology. It's been the incentive structure. Bowen framed the reform as putting more rooftops to work
— shifting attention from residential arrays and utility-scale farms to the factories, sheds and industrial premises with large, empty roof area sitting idle. Research has previously found Australia has enough unused commercial and industrial rooftop space to supply at least 25% of national annual electricity demand — around five times what gas-fired generation currently provides.
The grid connection question
Incentives solve the capital cost. They don't solve approvals — and for C&I solar, network connection has often been the longer pole in the tent. The government has also asked the Australian Energy Market Commission (AEMC) to consider rule changes requiring network providers to assess and approve commercial and industrial connections faster.
For businesses planning multi-site rollouts, this is the piece to watch: system economics and connection timelines together determine whether a portfolio-wide program is deliverable inside a single capex cycle.
Two clocks are running
And they run in opposite directions.
Clock one — the cap lifts
The expanded threshold starts 1 October 2026. Systems between 100kW and 1MW installed before that date do not qualify for STCs under the new ceiling.
Clock two — the value shrinks
The number of certificates a system creates is set by the deeming period: the years remaining until the SRES ends on 31 December 2030. That period shortens every 1 January. A system installed in 2026 is deemed over 5 years. The identical system installed in 2027 is deemed over 4 — 20% fewer certificates for the same hardware on the same roof.
That's the difference shown in the table above: $13,600 on a 250kW system, $27,200 on 500kW, $46,400 on 850kW. By 2028 the deeming period is 3 years and the 850kW incentive has fallen to roughly $139,000. After 2030 it's zero.
The 1MW cap opens on 1 October 2026. The deeming period steps down on 1 January 2027. Between those two dates there are roughly thirteen weeks in which a 100kW–1MW system attracts both the expanded eligibility and the highest deeming rate it will ever have.
A commercial project needs interval data, roof assessment, modelling, finance, consent and a DNSP connection approval before anyone gets on a roof. Thirteen weeks is not a long runway for that sequence — which is why the businesses that capture the full value are scoping now, not in September.
It changes differently depending on how you occupy the building
Most commentary on this reform treats "commercial solar" as one thing. In practice the building relationship determines who captures the benefit — and it's the reason a lot of C&I solar business cases stall before they reach a board.
Commercial tenants
A larger STC discount lowers the capital that has to be recovered over the term — which flows directly into the rate you lock in per kWh. Tenants on a minimum five-year lease can now size to consumption rather than to a 100kW cap.
Commercial owners
The discount improves payback on an asset you already hold. Annual energy savings also carry into business valuation on a multiplier, and the system lifts the building's appeal to future tenants or buyers.
Commercial landlords
Roof area you don't currently monetise becomes a revenue line. A cheaper install at ten times the previous scale materially changes the return on selling generation to tenants.
TSBA works across all three, including the funded structures that remove upfront capital from the decision entirely. Where a system is funded rather than bought outright, the expanded STC discount reduces the amount being financed — so the benefit shows up in the rate, not just the invoice.
Who this affects most
The reform is most material for organisations with high daytime load and large roof or ground-mount area:
- Manufacturing and food processing — continuous daytime demand, high energy intensity, long roof spans
- Cold storage and logistics — refrigeration load aligns closely with the solar generation profile
- Retail and shopping centres — multi-tenant sites with aggregated daytime consumption
- Agriculture and agribusiness — packing sheds, irrigation, dairy, controlled environment horticulture
- Health, education and aged care — large campuses, predictable load, strong emissions mandates
- Property and industrial REITs — portfolio-wide uplift in asset value and NABERS performance
If you're a listed entity or a supplier into one, there's a second dimension: on-site generation reduces Scope 2 emissions directly, without relying on purchased offsets or renewable electricity contracts — increasingly relevant under mandatory climate reporting and customer supply chain requirements.
Common questions
When does the 1MW cap start?
1 October 2026, subject to the supporting regulations being finalised.
Is this a grant I need to apply for?
No. It runs through the existing STC market. The certificate value is typically assigned to your installer and passed through as an upfront discount on the installed price.
Does it cost the taxpayer anything?
The expansion is expected to be broadly budget-neutral, because the SRES is funded through a market mechanism — liable energy retailers are required to purchase the certificates created.
What if my site needs more than 1MW?
Systems above 1MW continue under the large-scale (LGC) framework. For multi-site portfolios there can be value in structuring installations across sites to optimise which certificate market each system falls into.
Does this cover batteries?
The SRES already supports small-scale battery storage under separate arrangements. Pairing storage with a larger array changes the self-consumption calculation significantly and should be modelled together, not sequentially.
What our own project record says about the cap
Look at the commercial solar systems in our recent portfolio. A specialty coffee roastery in Queensland: 100kW. A 24-hour gym: 100kW. Franchised hardware stores: 100kW each. Completely different buildings with completely different load profiles, and the same system size every time.
That isn't a design coincidence. It's the ceiling.
Both sites hit their bill hard at 100kW. Neither was sized that way because 100kW was the right answer for the building — it was the largest system that still attracted the upfront rebate. Every conversation about going bigger ended at the same regulatory line.
From 1 October that line moves, and the capability above it is already proven. TSBA has delivered 300kW across two aged care facilities and 200kW on a hardware retailer's main trading site, alongside 100kW systems rolled out across that group's franchised stores. A further 600kW is currently in delivery across two Southeast Queensland sites — two 300kW systems for a single client, and the largest project we've taken on.
Client names and site details are withheld throughout.
Of the 17 steps in a TSBA commercial project, the install is four of them. The rest is eligibility, PVSell modelling, finance, landlord or body corporate consent, DNSP grid pre-approval and the STC claim — all of which we run in-house. That sequence is why we're telling businesses to start now rather than in September: the approvals don't compress just because the scheme has opened.
See the full commercial capability, project record and credentials →
What to do next
- Pull 12 months of interval data for each site to establish true daytime load profile
- Assess roof structural capacity and usable area — including age, membrane condition and remaining asset life
- Model system size against consumption, not against the old 100kW ceiling
- Open early conversations with your network provider on connection capacity and export limits
- Model STC value across install years to understand the cost of delay