The New 1 MW SRES Expansion: What Australian Businesses Need to Know Before 1 October 2026

Australia's commercial solar market is about to undergo one of its most significant changes in years.

On 5 August 2026, the Australian Government announced plans to expand the Small-scale Renewable Energy Scheme (SRES) so that eligible solar PV systems between 100 kW and 1 MW can receive Small-scale Technology Certificates (STCs).

The government intends for the change to apply to eligible systems installed from 1 October 2026, subject to the required regulations being in place.

For warehouses, factories, farms, schools, commercial buildings and other high-energy-use sites, this could materially change the economics of installing a larger commercial solar system.

Until now, the 100 kW threshold has represented an important dividing line in the Australian solar market.

That is about to change.

What Is Changing With the SRES?

The SRES is the Australian Government scheme through which eligible small-scale renewable energy systems can create Small-scale Technology Certificates (STCs).

For solar PV, the existing SRES framework has generally been limited to systems of no more than 100 kW.

Systems above 100 kW have instead operated under the Large-scale Renewable Energy Target framework and may be eligible to generate Large-scale Generation Certificates (LGCs).

Under the announced expansion, SRES eligibility will extend to eligible solar PV systems:

Above 100 kW and up to 1 MW.

The government intends for the expanded eligibility to apply to systems installed from 1 October 2026.

Importantly, the change remains subject to the necessary regulations being made, and further technical, installation and compliance requirements are still expected before commencement.

Why the 100 kW Threshold Has Mattered

Historically, businesses considering systems above 100 kW have entered a different regulatory and certificate environment.

That has meant the decision between, for example, a 99 kW system and a 200 kW, 500 kW or larger system has involved more than simply adding panels.

For some businesses, this created an artificial decision point.

A facility may have had the roof area and electricity consumption to justify significantly more than 100 kW of solar, while still choosing a smaller installation because of the different administrative and commercial considerations associated with moving into the large-scale scheme.

The announced SRES expansion is designed partly to address this "missing middle" of the commercial solar market.

How Will STCs Work for 100 kW–1 MW Commercial Solar?

One of the biggest changes for commercial solar projects above 100 kW is how the government incentive can be received.

Under the current large-scale framework, solar systems above 100 kW generally participate in the Large-scale Renewable Energy Target and can create Large-scale Generation Certificates (LGCs) based on the renewable electricity the system actually generates over time.

The expanded SRES is designed differently.

For eligible commercial solar systems above 100 kW and up to 1 MW, Small-scale Technology Certificates (STCs) will instead be available under the SRES.

The STC benefit is effectively upfront

STCs under the SRES are generally created after the system has been installed and its eligibility has been confirmed.

In most solar transactions, the system owner assigns the right to create those STCs to a registered agent or solar provider in return for an upfront reduction in the project price.

This means an eligible commercial business will not necessarily have to wait years for the incentive value to be realised.

Instead, the STC value may be incorporated into the commercial solar proposal as an upfront discount — similar to the way STCs have traditionally worked for smaller solar installations.

For businesses considering larger commercial systems, this could significantly simplify the investment case.

What Does the Five-Year Deeming Period Mean?

The Australian Government has announced that mid-scale commercial solar will use an STC factor based on a five-year deeming period for systems installed in 2026.

Importantly, this does not mean that STCs are paid over five years.

The deeming period is used to calculate how many STCs the system is eligible to create upfront.

In simple terms, the scheme estimates the renewable electricity the solar system is expected to generate over the applicable deeming period and uses that calculation to determine the STC entitlement.

The deeming period then decreases as the SRES approaches its scheduled end in 2030:

2026 installation → 5-year deeming period
2027 installation → 4-year deeming period
2028 installation → 3-year deeming period
2029 installation → 2-year deeming period
2030 installation → 1-year deeming period

This means the timing of a commercial solar project can affect the number of STCs available.

How Is This Different From LGCs?

This is one of the most significant aspects of the reform.

Under the Large-scale Renewable Energy Target, eligible systems above 100 kW can create LGCs based on actual renewable electricity generated.

That means certificate creation occurs progressively as the system produces electricity.

Under the expanded SRES, eligible 100 kW–1 MW solar installations will instead be able to access an upfront STC entitlement calculated using the applicable deeming period.

For many commercial customers, this could make the incentive considerably easier to understand and incorporate into the initial capital cost of the project.

Rather than:

Install system → generate electricity → progressively create LGCs

The expanded SRES is expected to operate more like:

Install eligible system → calculate STC entitlement → create/assign STCs → receive the value as an upfront project discount

The Australian Government estimates the expanded SRES could reduce the cost of installing eligible mid-scale solar by approximately 20%.

Which Businesses Could Benefit?

The expansion is particularly relevant to organisations with large daytime electricity consumption and usable roof or land area.

Examples include:

Warehouses and logistics centres with substantial roof space.

Manufacturing facilities operating machinery throughout daylight hours.

Food processing and cold-storage facilities with significant refrigeration loads.

Farms and agricultural processing facilities.

Shopping centres and large retail facilities.

Schools, hospitals and community facilities.

Large offices and mixed-use commercial properties.

The strongest commercial solar opportunities generally occur where a significant proportion of the electricity generated can be consumed directly on site.

That is why commercial solar should be designed around the site's actual electricity profile rather than simply filling every available section of roof with panels.

Does This Mean Every Business Should Install 1 MW?

No.

The new threshold should not become a target.

A 1 MW allowance does not mean a 1 MW system is economically appropriate for every site.

The correct system size depends on factors such as:

• annual electricity consumption
• half-hourly or interval consumption data
• daytime load
• operating hours
• electricity tariffs
• maximum demand charges
• roof space and structural constraints
• network export limits
• planned electrification or business expansion
• future battery storage.

A business consuming most of its energy during daylight hours may be able to economically utilise a much larger solar system than a business with predominantly evening demand.

What About Existing Commercial Solar Systems?

Businesses that already have solar should not automatically assume they need to replace their system.

For some sites, the opportunity may instead be to expand existing generation capacity.

For example, a business with an existing 99 kW installation may now have substantially higher electricity consumption than when the original system was installed.

An expansion could potentially help cover:

New machinery, increased production, EV charging, electrification, additional buildings or battery charging.

However, existing systems create additional technical and eligibility considerations.

Businesses should have the existing installation, metering, network connection and previous certificate claims reviewed before assuming an expansion will qualify for the new incentive.

Solar + Commercial Battery Storage

The timing of the SRES expansion is particularly significant for NSW businesses because another major incentive is arriving at almost the same time.

From 1 September 2026, NSW's Peak Demand Reduction Scheme introduces BESS5, a new battery activity specifically targeting commercial and industrial businesses.

That creates a potentially powerful combination:

Larger commercial solar + commercial battery energy storage.

Rather than exporting excess daytime solar generation, a battery can potentially store part of that energy for use later in the day, while also supporting strategies such as peak shaving and demand management.

For some commercial sites, evaluating solar and storage together may produce a better long-term energy strategy than treating them as completely separate projects.

What Should Businesses Do Before 1 October?

Businesses considering a system above 100 kW do not necessarily need to wait before starting the project-development process.

In fact, larger commercial systems can require significantly more work before installation than residential solar.

That can include:

Energy-data analysis, preliminary system design, site inspection, structural assessment, network applications, engineering, planning requirements, equipment selection and financial modelling.

Starting those steps early means a business can make an informed investment decision once the final SRES requirements are confirmed.

The Bigger Opportunity

Australia has been enormously successful at putting solar on residential rooftops.

Commercial rooftops represent a much larger untapped opportunity.

Large warehouses, factories and industrial facilities often have two characteristics that work particularly well for solar:

Large unused roof areas and substantial daytime electricity consumption.

Expanding the SRES to 1 MW could make it easier for these businesses to install systems that actually correspond to their energy requirements rather than designing around an arbitrary 100 kW incentive boundary.

For businesses considering commercial solar between 100 kW and 1 MW, 2026 may therefore represent an important window to reassess projects that previously did not meet their investment criteria.

Planning a 100 kW–1 MW Commercial Solar Project?

Ador Energy designs commercial solar and battery systems around the site's actual electricity consumption, operational requirements and investment objectives.

Before recommending a system size, we can assess your electricity data, site requirements and available solar and battery incentives to determine whether the project makes commercial sense.

Speak with Ador Energy about a commercial solar feasibility assessment.