Commercial Solar Rebates Are Changing: STCs Expanding from 100kW to 1MW
For Australian businesses considering a larger commercial solar system, one of the biggest changes to solar incentives in years is on the way.
The Australian Government has announced plans to expand the Small-scale Renewable Energy Scheme (SRES) so that commercial solar systems of up to 1 megawatt (MW) can qualify for Small-scale Technology Certificates (STCs).
Previously, the STC scheme was generally limited to solar systems of 100kW or less.
The change is intended to apply to eligible systems installed from 1 October 2026, subject to the required regulations being in place.
For businesses with large electricity consumption, this could significantly improve the economics of installing a larger commercial solar system.
What Is Changing?
Under the current system, solar installations up to 100kW can access STCs, which effectively provide an upfront discount on the cost of installing solar.
Once a system exceeds 100kW, it generally moves into the Large-scale Renewable Energy Target and generates Large-scale Generation Certificates (LGCs) over time.
The proposed changes will increase the upper limit of the SRES from 100kW to 1MW for eligible mid-scale solar installations.
That means a business could potentially install:
- 150kW
- 250kW
- 500kW
- 750kW
- or even a 1MW commercial solar system
and receive an upfront STC-based incentive rather than relying solely on LGCs generated over the life of the system.
Why Is This Important for Businesses?
Historically, the 100kW STC threshold has influenced the way many commercial solar systems are designed.
For businesses where a 150kW, 300kW or 500kW solar system would make sense based on their electricity consumption, there has been a significant change in the incentive structure once the system exceeded 100kW.
The new rules are designed to address this "missing middle" in Australia's solar market.
The Federal Government estimates the expanded incentive could reduce the upfront cost of eligible mid-scale solar installations by around 20%.
For warehouses, manufacturers, farms, shopping centres, clubs, schools and other high-energy-use businesses, this could make considerably larger solar installations financially viable.
How Will the New Commercial Solar STCs Work?
The Government has announced that solar systems above 100kW and up to 1MW will be eligible under the expanded SRES.
For these mid-scale systems, the STC calculation will use a five-year deeming period, rather than the longer deeming period traditionally associated with smaller systems.
The exact value will therefore depend on factors including:
- system size
- installation location
- applicable STC deeming period
- STC market price
- final scheme and eligibility requirements
The Clean Energy Regulator has also advised that additional design, installation and compliance requirements are being considered for these larger systems.
Should Businesses Simply Install the Biggest Solar System Possible?
Not necessarily.
Commercial solar should still be designed around the site's electricity consumption, operating hours, roof space, network connection and future energy requirements.
For many businesses, the best result may also involve combining solar with commercial battery storage.
A properly designed system can use solar to reduce daytime grid consumption, charge a battery with excess generation and use stored energy during expensive peak periods or after the solar system stops producing.
This is particularly relevant in NSW, where new commercial battery incentives have also commenced under the Peak Demand Reduction Scheme.
Commercial Solar and Battery Incentives Are Starting to Work Together
The timing of these changes is significant.
NSW businesses can now potentially access incentives for commercial battery systems under the NSW Peak Demand Reduction Scheme, while the Federal Government is expanding upfront solar incentives to systems as large as 1MW.
For some businesses, this can substantially change the business case for installing a complete commercial solar and battery system rather than solar alone.
Is Your Business Suitable for Commercial Solar?
Innovate Energy designs and installs commercial solar and battery systems throughout NSW.
Rather than simply recommending a particular system size, we can assess your electricity consumption and determine:
- the appropriate solar capacity
- expected solar generation
- daytime self-consumption
- potential battery storage requirements
- available government incentives
- expected electricity savings
- network requirements
- estimated payback period
With commercial solar incentives undergoing one of their biggest changes in years, businesses considering systems above 100kW should review their options under the new scheme.
Talk to Innovate Energy about a commercial solar or solar and battery feasibility assessment for your business.