For fifteen years a single number decided whether a business could claim the same upfront solar discount that put panels on millions of Australian homes. That number was 100 kilowatts. Stay under it and you qualified. Go over it, which nearly every warehouse, factory and cold store does the moment a system is sized to its daytime load, and the discount vanished.
On 5 August 2026, Climate Change and Energy Minister Chris Bowen announced at the National Press Club in Canberra that the Small-scale Renewable Energy Scheme will cover commercial solar systems up to 1 megawatt. The change is expected to start on 1 October 2026, subject to the necessary regulations being in place, and the government estimates it will cut the upfront cost of an eligible system by around 20 per cent.
If you have quoted commercial solar before and walked away because the numbers were tight, this is the first policy change since 2011 that moves the starting figure in your favour.
Commercial solar rebate at a glance
| Scheme | Small-scale Renewable Energy Scheme (SRES), operating since 2011 |
| What changed | Eligible system size raised from 100 kW to 1 MW |
| Expected start | 1 October 2026, subject to regulations being finalised |
| Announced | 5 August 2026, Minister Chris Bowen, National Press Club |
| Headline value | Around 20 per cent off the installed cost |
| How it is paid | Upfront small-scale technology certificate (STC) discount, applied at point of sale |
| Deeming | Five-year deeming rate expected to hold through to 31 December 2030 |
| Also covers | New installations and expansions of existing systems |
| Administered by | Clean Energy Regulator |
| Funding | Budget neutral, through the existing certificate market |
What actually changed
The scheme is not new. Since 2011 the SRES has given households an upfront discount through small-scale technology certificates, and it is the reason roughly one in three Australian homes now runs on solar. Businesses were technically included, but the 100 kW ceiling shut most of them out, because a system that size barely covers the daytime draw of a mid-sized shed.
Here is the before and after in plain terms.
| Before 1 October 2026 | From 1 October 2026 | |
|---|---|---|
| Systems 100 kW to 1 MW | Large-scale generation certificates (LGCs) only | Eligible for upfront STCs |
| When you get the value | Earned per megawatt hour, year by year | Once, at the point of sale |
| Who does the admin | You, through ongoing accreditation and metering | Your installer, built into the quote |
| Price exposure | LGC market risk across the life of the system | STC price on the day certificates are created |
| Effect on the business case | Slow income stream, rarely tips a capital decision | Around 20 per cent off day one |
The target is what the government calls the missing middle. Australia has installed roughly 22 GW of rooftop solar on homes, while businesses have managed only about 5.6 GW, most of it in systems below 100 kW. Those figures come from the Institute for Energy Economics and Financial Analysis. The technical potential on commercial, industrial and agricultural rooftops runs past 80 GW. Bowen put it in six words at the press club: the missing middle is mid-scale solar.
The detail most coverage has missed: deeming stays flat to 2030
This is the part worth reading twice, because it changes how you should think about timing.
Under the standard SRES rules, the number of certificates a system earns falls every 1 January, because certificates are deemed against generation out to the scheme’s 2030 end date and there is one less year to deem each time the calendar turns. Install in March and you get fewer certificates than you would have in the previous December.
Reporting on the announcement indicates that systems in the new 100 kW to 1 MW band are expected to keep a five-year deeming rate through to 31 December 2030, rather than facing that annual step-down. If the regulations land that way, a 400 kW system installed in late 2027 would earn the same certificate count per kilowatt as one installed in late 2026.
Two things follow from that. First, the urgency is not about beating a 1 January cliff, so you do not need to rush a design to hit an arbitrary date. Second, the urgency is real for a different reason, covered further down: network connection approvals, not certificate maths, are what will decide when your system actually switches on.
Confirm this with your installer once the regulations are registered, because until then it sits as expected policy design rather than settled law.
What the savings look like on real systems
The government released worked examples with the announcement. These are its figures, not estimates, and they give a fair benchmark.
| System size | Typical site | Estimated upfront discount | Estimated annual generation | Estimated annual bill saving |
|---|---|---|---|---|
| 250 kW | Retailer, medium enterprise, mid-sized warehouse | About $68,000 | Around 345 MWh | Around $50,000 |
| 500 kW | Small manufacturing site, larger warehouse | About $136,000 | Scales with site load | Scales with site load |
| 850 kW | Industrial energy user, large logistics centre | About $230,000 | Around 1,173 MWh | Around $175,000 |
Read the last two columns carefully, because the annual saving is the number that actually funds the project. A 250 kW system taking around $50,000 a year off the power bill, on an installed cost reduced by $68,000, is a very different proposition to the same system at full price.
Your own figures will move with system size, your postcode’s solar zone, and the STC price on the day certificates are created. A written proposal should show you the certificate count and the assumed price rather than a rounded percentage.
How the commercial solar rebate is calculated
The formula itself is simple.
STCs = system capacity (kW) × zone rating × deeming years
Your discount ≈ number of STCs × STC market price
Each input in plain language:
Zone rating. The country is mapped into four zones, each carrying a fixed multiplier that reflects local solar irradiance. Your postcode determines which one applies, so an identical 300 kW array earns a higher certificate count in Rockhampton than it does in Hobart.
Deeming years. Certificates are created upfront against the electricity your system is expected to generate out to the end of 2030. For the new 100 kW to 1 MW band, a five-year deeming rate is expected to apply through to 31 December 2030.
STC price. Certificates trade on the open market at a price set by supply and demand, and it changes daily. The Clean Energy Regulator also runs a clearing house where STCs can be sold at a fixed $40 excluding GST, and the open market generally sits somewhat below that ceiling. Check the current price before you build a number into a business case.
You will almost never touch any of this yourself. The standard arrangement is that you assign the certificates to your installer, they create and sell them, and the quote you sign already has the value deducted. The headline figure on your quote is the net price.
Why an upfront certificate beats a slow one
Before this change, a system above 100 kW fell out of the STC world and into large-scale generation certificates. LGCs are earned one at a time for every megawatt hour your system produces, then sold to electricity retailers across the life of the system. They add up, but they arrive slowly, they carry price risk, and they need ongoing accreditation and metering to claim.
For a finance director comparing capital projects, an income stream that trickles in over a decade rarely wins the argument. Twenty per cent off the invoice on day one does. That cash flow difference is what turns a marginal proposal into a bankable one, and it is why the reform matters more than the percentage suggests.
Who qualifies for the expanded rebate
The government has named the intended beneficiaries directly: manufacturers, farmers, retailers, transport and logistics operators, warehouses, shopping centres, schools, hospitals and community organisations. In practice, if you have a large roof and a daytime electricity bill, you are in scope.
Solar pays back fastest where generation lines up with consumption. Sites in the sweet spot usually share these traits:
- They own the building, or hold a long lease with the landlord on side, so whoever pays the power bill also controls the roof.
- Most of the load runs in daylight hours. Manufacturers, food producers, cold stores, retailers, medical centres, schools and logistics operators all fit.
- There is large, structurally sound roof area, or hardstand suitable for a carport array.
- The tariff is heavy enough that cutting 40 to 70 per cent off daytime grid draw is material.
Systems at or below 100 kW already earn STCs under the existing rules, so nothing changes for them. Anything above 1 MW stays outside the SRES and continues under the large-scale framework.
To create certificates, the system must be new, designed and installed by an installer accredited under Solar Accreditation Australia, and use modules and inverters on the Clean Energy Council approved product lists. Accreditation moved from the Clean Energy Council to Solar Accreditation Australia in 2024, so ask for the SAA accreditation number rather than a CEC one.
How much roof do you actually need
Size figures are easier to picture in panels and square metres than in kilowatts.
On current module sizes, a 440 W panel puts roughly 2,270 panels behind a 1 MW array. Halve that for 500 kW. The former 100 kW ceiling worked out at only about 230 panels, which is why so many sheds hit it before the design was anywhere near their actual consumption.
As a rough planning figure, allow somewhere around 5 to 6 square metres of usable roof per kilowatt once you account for walkways, plant, skylights and setbacks. A roof that measures 3,000 square metres on paper rarely yields 3,000 square metres of array.
Stacking with other incentives
The SRES discount applies to the panels and inverter. Other programs sit alongside it.
Battery storage. The federal Cheaper Home Batteries Program reduces the cost of an eligible battery by roughly 30 per cent, and it operates through its own STC arrangement. Because the two incentives cover different equipment, a site installing solar and storage together can benefit from both on their respective components. Our guide to the federal battery rebate covers eligibility and current figures.
State and territory programs. These are separate schemes with their own rules, and whether they combine with the federal discount depends on each program. In New South Wales, commercial battery incentives run through the Peak Demand Reduction Scheme, and the state’s business energy programs are listed on the NSW Government business and industry energy page. Victoria runs its own commercial solar and energy upgrade incentives. Queensland businesses should check current state programs before assuming none apply. The federal position on how state schemes interact with STCs is set out on the energy.gov.au rebates and loans page.
Local council programs. Some councils run their own environmental upgrade finance arrangements for commercial buildings. These are worth a call to your council’s economic development team before you finalise funding.
Tax treatment, briefly
The rebate and the tax deduction are separate questions, and businesses regularly confuse them.
The STC value comes off your purchase price, so it reduces the cost base of the asset rather than arriving as income. What you then depreciate is the net amount you actually paid.
The instant asset write-off sits at $20,000 per asset for businesses with aggregated turnover under $10 million, which means a commercial solar system will almost never be written off immediately. Assets at or above the threshold go into the small business pool and depreciate at 15 per cent in the first income year and 30 per cent each year after, or under standard effective life rules for larger businesses. The current position is on the ATO instant asset write-off page.
This is general information, not tax advice. Run the numbers past your accountant before they go into a board paper.
Ways to fund the balance
Twenty per cent off still leaves the majority of the cost on your side of the ledger. Three common structures:
Capital purchase. You own the system outright, keep every dollar of bill saving, and depreciate the asset. Best return over the life of the system, and the option the upfront discount most directly improves.
Equipment finance or a chattel mortgage. You own the asset and spread the payment, usually across five to seven years. Where the monthly bill saving exceeds the repayment, the system is cash flow positive from the first month. The 20 per cent discount reduces the principal, which is where it does most of its work.
Power purchase agreement. A third party owns and maintains the system on your roof and you buy the electricity it generates at an agreed rate. No capital outlay, but the certificate value sits with the asset owner rather than with you, and the rate is locked for a long term. Worth modelling against equipment finance rather than assuming it is the cheaper path.
Leased premises change the calculation. If the landlord owns the roof and you pay the bill, the incentives are split. A PPA, a rent adjustment, or a clear ownership and make-good agreement can bridge that gap, but it needs to be settled before design work starts.
What the rebate does not fix
An upfront discount improves the economics. It does not remove the practical work around a commercial install.
Network connection. Approval to connect a medium-sized system has long been the slowest and least predictable part of a commercial project. The government has asked the Australian Energy Market Commission to develop reforms making these approvals faster and more consistent for commercial and industrial solar, but that work is under way with no firm timeline. In New South Wales your distributor will be Ausgrid, Endeavour Energy or Essential Energy depending on location. In Queensland it is Energex or Ergon. Ask what current timeframes look like in your area before you plan around a go live date.
Export limits. Distributors frequently apply export constraints to commercial systems, and some sites are approved on a zero export or dynamically limited basis. That does not undermine the project, because commercial solar earns its return from self-consumption rather than feed-in credits, but it does change how the system should be sized. Find out your export position early, since it affects both the design and the payback model.
Roof structure. A commercial roof needs a structural assessment to confirm it can carry the array and the wind load. Book it early rather than discovering a constraint at design stage. Older sheds with long spans and thin purlins are where this bites.
Demand charges. Many commercial tariffs bill on peak demand as well as consumption, and solar alone does not always reduce that component, particularly if your peak sits early in the morning or after dark. Pairing solar with a battery, or shifting when heavy loads run, is usually what addresses it.
None of these are dealbreakers. They are the reason a proper energy assessment beats a rooftop guess.
What to do before 1 October 2026
The rebate is not open yet, and a 100 kW to 1 MW project carries months of lead time. The sensible sequence starts now.
- Pull your interval data. Ask your retailer for twelve months of interval data and look at the shape of your daytime load. Good commercial systems are sized to consumption, not to available roof.
- Lodge the connection enquiry early. This is almost always the critical path. Starting it now costs nothing and protects your timing.
- Book the structural assessment. Do this in parallel with the connection enquiry rather than after it.
- Get competing quotes. On a project worth hundreds of thousands of dollars, the spread between quotes can exceed the rebate itself. A 20 per cent discount does not rescue an overpriced or badly designed system.
- Confirm accreditation and equipment. Check the SAA accreditation and that the panels and inverters quoted are on the Clean Energy Council approved lists, since certificate eligibility depends on both.
- Ask how commissioning date interacts with eligibility. Once the regulations are registered, the exact cut-off treatment for systems installed either side of 1 October will be confirmed. Get it in writing.
See what the expanded rebate means for your site
Every business sitting between 100 kW and 1 MW has spent the past decade on the wrong side of a threshold that had nothing to do with its energy use. From October, that stops being the reason a project does not proceed. Greenlight Solar designs and installs commercial solar systems across NSW and QLD, handles the certificate and connection paperwork, and can model the savings against your actual bills before you commit. Request a free commercial solar assessment and we will show you the numbers for your roof rather than a rounded percentage.
Frequently asked questions
When does the 1 MW commercial solar rebate start?
The expanded SRES is expected to commence on 1 October 2026, subject to the necessary regulations being in place. It was announced on 5 August 2026. Because the detailed rules are still being made, confirm current eligibility before you lock in a project date.
How much is the commercial solar rebate worth in dollars?
The government estimates around 20 per cent off the installed cost. Its worked examples put the discount at about $68,000 on a 250 kW system, about $136,000 on a 500 kW system, and about $230,000 on an 850 kW system. There is no fixed dollar figure, because the value depends on system size, your solar zone and the STC price when certificates are created.
How is the commercial solar rebate calculated?
Multiply system capacity in kilowatts by your postcode’s zone rating by the number of deeming years to get the certificate count, then multiply that by the STC market price. Certificates can be sold on the open market at a variable price or through the Clean Energy Regulator’s clearing house at a fixed $40 excluding GST.
Does the rebate get smaller each year like the household solar rebate?
This is where the commercial band looks different to the household one. Household systems lose deeming years every 1 January as the scheme counts down to 2030, so the discount shrinks annually. Reporting on the announcement indicates the 100 kW to 1 MW band will instead hold a flat five-year deeming rate right through to 31 December 2030. Treat that as expected design until the regulations are registered, and ask your installer to confirm it before you build a delay into your planning.
Can I expand an existing commercial solar system and claim the rebate?
Expansions of existing systems up to 1 MW are expected to be eligible under the change. You cannot retrospectively claim certificates on capacity already installed, but adding capacity may qualify. Whether it works on your site depends on your current setup, available roof and grid connection headroom, so it needs a site-by-site assessment.
Is the rebate paid to me, or taken off the price?
It comes off the price. Your installer creates the certificates at the time of installation, sells them into the certificate market and applies the value to your quote. You pay the reduced amount upfront rather than claiming anything back later.
What is the difference between STCs and LGCs for a business?
STCs are created once, upfront, based on expected generation, and the value is applied as a point of sale discount. LGCs are earned gradually, one for each megawatt hour actually generated, and sold to retailers over the life of the system. Systems above 100 kW have historically only had access to LGCs, and the reform gives the 100 kW to 1 MW band the upfront STC route instead.
Do I need a Clean Energy Council accredited installer?
Installer accreditation moved to Solar Accreditation Australia in 2024, so your system must be designed and installed by an SAA accredited person. The Clean Energy Council still maintains the approved product lists for modules and inverters, and your equipment must be on those lists. Both conditions have to be met for certificates to be created.
Does the commercial solar rebate cover batteries?
No. The SRES discount applies to solar panels and inverters. Battery storage is supported separately through the Cheaper Home Batteries Program, which can apply to the battery component alongside the solar rebate on the panels and inverter.
Can I combine the federal rebate with a state rebate?
Sometimes, but you cannot assume it. Each state program writes its own conditions, and a few explicitly reduce or exclude their incentive where a federal certificate has already been claimed on the same equipment. Read the eligibility terms of the specific program you are applying for, and get the stacking position confirmed in writing before it goes into a board paper or a finance application.
Will my system be allowed to export to the grid?
Often not at full capacity. Your distributor sets the export condition as part of the connection approval, and outcomes range from an unrestricted connection to a hard cap or a dynamic limit that varies with network conditions. A capped result is less damaging to a business case than most people expect, since the bulk of the return comes from offsetting what you would otherwise buy at retail rates. It does shape the design though, so raise it at the connection enquiry stage rather than after the layout is drawn.
Can I claim the instant asset write-off on a commercial solar system?
Realistically, no. Even a modest commercial array costs many times the current write-off limit, so it fails the per asset test regardless of your turnover. The deduction still happens, just spread out, either through the small business pool or across the asset’s effective life depending on how your business is structured. Your accountant is the right person to model which of those applies and what it does to the after-tax payback.
Should we wait until October to get quotes?
No. Design, structural assessment, network approval and procurement all take months, and network connection is usually the longest item. Starting now positions you to move as soon as the scheme opens rather than joining a queue that thickens once demand for medium-scale systems rises.
