Australia’s commercial rooftops could be in line for a substantial solar boost, with the Federal Government announcing plans to expand the Small-scale Renewable Energy Scheme from systems capped at 100 kilowatts to installations as large as 1 megawatt.
If the final regulations are approved as proposed, the change will begin on 1 October 2026 and could cut the upfront cost of eligible medium-sized solar systems by about 20 per cent.
That is a fairly significant shift for businesses that have plenty of roof space and daytime electricity demand but, until now, have had little reason to design a system beyond the existing 100 kW limit.
Homes have already made rooftop solar commonplace. More than one in three Australian households has solar installed, with residential rooftops contributing more than 22 gigawatts of capacity nationally.
Commercial solar, by comparison, accounts for about 5.6 GW.
One obvious reason for the gap is the way the incentive system has worked. Businesses installing systems larger than 100 kW have not been able to access the same upfront Small-scale Renewable Energy Scheme support available to smaller installations.
Raising the limit to 1 MW changes that equation.
Instead of squeezing a project under an arbitrary 100 kW ceiling, a manufacturer, warehouse, farm, retailer, school, hospital or community facility could size its solar installation around the electricity it actually uses.
The incentive would continue to be delivered through Small-scale Technology Certificates, providing the benefit at the time of purchase rather than gradually over the operating life of the system. The expanded scheme is expected to be administered by the Clean Energy Regulator.
What the numbers could look like
For a 250 kW installation, the projected upfront SRES discount is about $68,000. Such a system is estimated to generate roughly 345 MWh each year and could reduce annual electricity bills by around $50,000.
At 500 kW, the estimated upfront discount rises to approximately $136,000, although generation and bill savings will depend on factors including location.
An 850 kW system could generate about 1,173 MWh annually, with estimated electricity bill savings of roughly $175,000 a year. The available upfront discount would vary, subject to the new 1 MW scheme limit.
It is not difficult to see why this matters to businesses with large daytime loads.
Electricity generated on the roof and consumed on site reduces the amount that needs to be purchased from the grid. That can help businesses and farms limit their exposure to movements in wholesale electricity costs and reduce operating expenses.
There is also a broader network benefit. Electricity that is produced and used in the same place can reduce pressure on distribution networks during busy daytime periods, potentially easing the need for additional network infrastructure.
Updated connection frameworks are also being introduced to make approval processes faster for these mid-sized solar projects.
A relatively small cost for a much larger market
Despite the sizeable increase in the system threshold, the estimated effect on household electricity customers is modest.
The scheme is intended to remain budget-neutral, with the retail compliance impact estimated at only $1 to $2 per household each year.
For commercial operators, however, the change could remove a significant part of the capital-cost hurdle that has kept many larger rooftop projects from proceeding at their natural size.
That may prove particularly useful for sites where the roof is already there, the electricity is being consumed during daylight hours and the only thing standing between a business and a larger solar system has been the incentive rules.
Moving the SRES ceiling from 100 kW to 1 MW will not change the basic economics of every commercial solar project. But it does remove one longstanding policy boundary and gives more businesses the opportunity to design systems around their actual energy needs rather than around the rules of the rebate.
For a country that has already embraced rooftop solar at home, the next obvious patch of unused real estate may be sitting above warehouses, factories, shops, schools and farms.
Article adapted from: minister.dcceew.gov.au - Putting more roofs to work
