A 250kW solar system on a warehouse roof in Dandenong attracts almost nothing in upfront federal support today. From 1 October 2026, the same system is expected to come with around $68,000 knocked off the installation price — before it generates a single kilowatt-hour.
Energy Minister Chris Bowen announced the change at the National Press Club on Wednesday 5 August 2026. It’s the biggest shift in Australian solar policy since the Cheaper Home Batteries program. Here’s what was actually announced, the numbers the government put on it, and the parts that aren’t settled yet.
What was announced
The Small-scale Renewable Energy Scheme (SRES) — the same federal scheme that produces the STC discount on every household solar install — will have its eligibility cap raised from 100 kW to 1 MW. That’s a tenfold increase.
- Cuts the upfront cost of commercial, industrial and agricultural rooftop solar by around 20%
- Expected to commence 1 October 2026, subject to the necessary regulations being in place
- Covers new installations and expansions of existing systems up to 1 MW
- Delivered through the existing SRES, administered by the Clean Energy Regulator — no new program, no new application process
- Expected to be budget neutral; the estimated cost pass-through to other energy users is in the order of $1–2 a year
- Bowen has also asked the Australian Energy Market Commission to consider rule changes to speed up commercial and industrial grid connections
The federal scheme is separate from state-run rebates. Nothing here replaces or affects Solar Victoria.
Why the 100kW cap mattered: the “missing middle”
Australian households have installed roughly 22 gigawatts of rooftop solar. Australian businesses have installed about 5.6 gigawatts, according to the Institute for Energy Economics and Financial Analysis — and most of that sits below 100 kW.
That isn’t a coincidence. Under 100 kW, a system earns small-scale technology certificates (STCs): deemed upfront, paid as a discount on the invoice, certain at the point of sale. Above 100 kW, it earns large-scale generation certificates (LGCs) instead — created annually against actual generation, sold into a separate market, and worth far less to a business trying to get a capital approval over the line today.
The practical result: businesses with 400kW of roof space have been installing 99kW systems. The Smart Energy Council calls the 100 kW–30 MW band the “missing middle”, and estimates commercial and industrial rooftops represent generation capacity equivalent to ten of Australia’s largest coal-fired power stations.
The numbers the government published
- 250kW system — about $68,000 off the install; roughly 345 MWh generated a year; around $50,000 a year off electricity costs
- 500kW system — about $136,000 off the install
- 850kW system — roughly 1,173 MWh a year; around $175,000 a year off electricity costs
Both discount figures work out to about $272 per kW — a consistent rate, which tells you the estimate is a straight certificate calculation rather than a headline number. For context, that’s in the same ballpark per kilowatt as what a household currently receives on a 6.6kW system.
On the generation side, 250kW producing 345 MWh a year implies roughly 1,380 kWh per kW installed — a realistic figure for a well-oriented commercial roof, not an optimistic one.
The change that matters most isn’t the 20%
According to the Smart Energy Council, systems in the newly eligible band will receive upfront, deemed certificates rather than the progressively priced LGCs that apply above 100 kW today — and will retain a five-year deeming rate through to 31 December 2030, rather than the annual step-down that applies to smaller systems as the scheme winds down.
That’s the real story. For a business, the difference between an upfront, certain discount and a stream of certificates you have to sell over years is often the difference between a project being approved and being shelved. It also means the 100 kW–1 MW band won’t lose value each January the way household systems will — residential deeming drops from five years to four on 1 January 2027.
Four things that aren’t settled yet
1. The regulations don’t exist yet. The media release says “expected to commence from 1 October 2026, subject to the necessary regulations being in place“. That’s an announcement of intent, not a law. Treat the start date as a target.
2. Certificate value is a market price, not a fixed rebate. STCs trade below the $40 clearing house ceiling — recently around $38. Adding a large volume of commercial certificates to that market is not obviously price-neutral. The $272/kW figure is an estimate based on today’s conditions.
3. Grid connection is the actual bottleneck above 100 kW. Distribution network approval, export limits and protection requirements are what stall mid-scale projects — not the rebate. Bowen’s request to the AEMC acknowledges exactly this, but rule changes take time, and a discount doesn’t help if your network won’t let you export. If you’re planning a system in this range, start the network conversation early.
4. Nothing changes for systems under 100 kW. If your business was already installing 30kW or 80kW, you were always eligible. This announcement doesn’t improve your position — and the annual deeming step-down still applies to you.
Should a business wait until October?
If you’re seriously considering a system above 100 kW: probably, yes. There’s no mechanism to claim a discount that doesn’t legally exist yet, and no honest retailer can promise you one on a September installation. Be sceptical of anyone who tries.
But “wait” doesn’t mean “do nothing”. The slow parts of a commercial solar project have nothing to do with the rebate:
- Pulling 12 months of interval data from your retailer and working out your actual daytime load profile
- A structural assessment of the roof — many older warehouses and farm sheds need remediation before racking goes on
- Starting the pre-approval conversation with your distribution network
- Understanding how the system interacts with your demand charges, which for commercial tariffs often matter more than the energy rate
Do that work between now and October and you’re ready to sign when the regulations land. Leave it until October and you’ll be starting a three-month process while everyone else is doing the same.
What about households?
Nothing in this announcement changes residential rebates. Household solar and battery incentives are unaffected, and the scheduled step-down on 1 January 2027 still applies. If you’re a homeowner, our breakdown of the January 2027 changes has the numbers, and our battery rebate calculator will model your system.
Frequently asked questions
When does the expanded commercial solar rebate start?
The government expects it to commence on 1 October 2026, subject to the supporting regulations being made. Until those regulations are in place, the current 100 kW cap applies.
How big a system can my business install?
Up to 1 MW, raised from the current 100 kW limit. Systems above 1 MW continue to sit under the large-scale scheme.
How much will it actually save?
Around 20% off the upfront installation cost — the government’s worked examples put that at roughly $68,000 on a 250kW system and $136,000 on a 500kW system, which is about $272 per kW installed. The final figure depends on the STC spot price at the time of installation.
Does it apply to expanding an existing system?
Yes. Both new installations and expansions of existing systems up to 1 MW are covered.
Do I need to apply for it?
No. Like the household STC discount, it’s applied by your retailer as a reduction on the invoice, and administered through the Clean Energy Regulator. There’s no separate application.
Does this affect the Solar Victoria rebate?
No. The SRES is a federal scheme and operates separately from state-run programs.
Where we stand
Northwest Energy Solutions is a Melbourne-based residential solar, battery and EV charger retailer — that’s what we do today, and we’d rather say so plainly than claim capability we haven’t built yet. We are assessing commercial and light industrial work ahead of the October start, particularly for small business and agricultural sites around Melbourne.
If you run a business, a farm or a community facility and you’re weighing up a system in the 100 kW–1 MW range, get in touch. We’ll give you a straight answer about whether we’re the right fit — and if we’re not, we’ll say so. If you’re a homeowner, start with solar panels in Melbourne or home batteries.
Sources
- Minister for Climate Change and Energy, “Putting more roofs to work”, media release, 5 August 2026
- Smart Energy Council, statement on the SRES expansion, 4 August 2026
- Institute for Energy Economics and Financial Analysis — installed capacity figures cited in the ministerial release