SRES expansion: STC eligibility to increase from 100 kW to 1 MW from October 2026

About this update

This dated government-scheme update is preserved as a historical record and connected to current scheme guidance.

Publication date: August 6, 2026.

Status note: Rules, methods, product requirements, regulators and certificate markets can change after publication. The current legislation, regulator guidance and method documents prevail.

What this article reported

The Australian Government has announced a major expansion of the Small-scale Renewable Energy Scheme, increasing the maximum eligible solar PV system size from 100 kW to 1 MW.

Expected to commence on 1 October 2026, subject to the required regulations being made, the change is intended to reduce the upfront cost of medium-sized commercial, industrial, agricultural and community solar installations by around 20 per cent.

What has been announced

Minister for Climate Change and Energy Chris Bowen announced the expansion on 5 August 2026 as part of the government's plan to increase solar uptake among larger energy users.

Under the change, solar systems with a capacity of up to 1 MW will be able to access small-scale technology certificates through the existing SRES. The current maximum system size is 100 kW.

"We're putting more rooftops to work and helping businesses, farms and community organisations cut energy costs by slashing the cost of installing medium-sized solar systems by around 20 per cent," Mr Bowen said.

"We're fixing that by expanding support to systems up to 1 MW, unlocking the potential of commercial rooftops and helping businesses cut power bills, invest in growth and create jobs."

The expansion will use the existing SRES certificate market administered by the Clean Energy Regulator. It is not a new grant or standalone rebate program. Eligible installations will create certificates that can be traded through the existing market.

Who the expansion is intended to support

The higher threshold is aimed at the commercial and industrial solar market, including:

The government said larger energy users had previously been unable to access the same upfront SRES support available to households and smaller businesses because of the existing 100 kW limit.

Mr Bowen said the expansion would help "manufacturers, farmers, retailers, logistics centres, schools, hospitals and community organisations reduce energy costs".

Indicative project benefits

The government estimates that expanding the SRES could reduce the upfront installation cost of eligible systems by around 20 per cent.

Its indicative examples include:

The government estimates a 250 kW system could generate around 345 MWh of electricity each year and save a medium-sized business approximately $50,000 annually. An 850 kW system could generate around 1,173 MWh and save an industrial energy user around $175,000 annually. Actual outcomes will depend on the site, electricity consumption, system performance, certificate prices and commercial arrangements.

Expected commencement

The expanded SRES is expected to commence on 1 October 2026, subject to the necessary regulations being in place.

Businesses considering systems between 100 kW and 1 MW will need to review the final regulations before relying on the proposed commencement date or estimated certificate benefit.

Potential impact on LGC projects

Solar installations above 100 kW have traditionally been considered for accreditation under the Large-scale Renewable Energy Target, allowing eligible generation to create large-scale generation certificates.

Moving the SRES threshold to 1 MW is likely to make STCs the more attractive certificate pathway for many new projects within the 100 kW to 1 MW range because the benefit is generally reflected upfront, rather than being created progressively from metered generation.

This may reduce the future volume of new LGC-generating solar systems below 1 MW. However, Northmore Gordon's preliminary view is that the practical effect on the broader LGC market may be limited, given the relatively modest contribution of these mid-scale systems to total LGC supply.

The final impact will depend on the regulations, the STC calculation methodology and the transition arrangements for projects already pursuing LGC accreditation.

What the change could mean for Solar VEECs

Victorian commercial solar projects can also be eligible to create Victorian Energy Efficiency Certificates under Activity 47 and other Victorian Energy Upgrades measurement and verification pathways.

Activity 47 currently supports deemed VEEC creation for eligible commercial and industrial solar systems between 30 kW and 200 kW. Larger projects can be considered through streamlined or advanced measurement and verification methods. Northmore Gordon's existing guidance also notes that eligible projects may be able to claim VEECs alongside STCs or LGCs, subject to the relevant program requirements.

The expansion of STCs to 1 MW could therefore improve the combined certificate value available to some Victorian projects rather than necessarily displacing VEEC opportunities.

Northmore Gordon does not currently expect the announcement alone to have a significant effect on VEEC market volumes or pricing. However, the detailed treatment of larger systems under the expanded SRES will need to be reviewed against the Victorian Solar Project-Based Activities rules once the federal regulations are released.

For more information on Activity 47 and the available C&I Solar VEEC pathways, see Earn More from C&I Solar - What Activity 47 Means for You.

Network connection reforms also proposed

The government has also committed to pursuing targeted rule changes and improvements to the existing connection framework for mid-scale solar projects.

This is significant because network connection assessments, export constraints and approval timeframes can materially affect commercial solar project costs and delivery schedules. The announcement does not yet provide detailed changes or a timetable for the proposed connection reforms.

Key details still to be confirmed

The government's release provides the headline threshold and expected commencement date but does not yet explain:

The government said the SRES retailer compliance obligation will continue to decline annually through to 2030. However, the release does not explain the precise deeming arrangements that will apply to newly eligible systems.

What businesses and solar providers should do next

Businesses planning a solar system between 100 kW and 1 MW should avoid finalising their certificate strategy based solely on the headline announcement.

Project owners, developers and installers should review:

Northmore Gordon will provide a further update when the regulations and implementation guidance are released. For support comparing STCs, LGCs, Solar VEECs and other certificate pathways for a commercial solar project, contact Northmore Gordon before committing to a certificate or contracting approach.

Official source: Australian Government - Putting more roofs to work: minister.dcceew.gov.au/bowen/media-releases/putting-more-roofs-work/

How to use this information now

Confirm the activity or method, effective dates, accreditation and product rules, baseline, evidence, audit and registration timing before procurement or implementation. Historical certificate values are not current quotes.

Separate source-reported facts from forecasts, targets and commentary. For a current project, retain the official source, version, effective date, assumptions and decision record in the evidence file.

What is the key change announced to the Small-scale Renewable Energy Scheme (SRES)?

The Australian Government announced a major expansion of the Small-scale Renewable Energy Scheme, increasing the maximum eligible solar PV system size from 100 kW to 1 MW, allowing systems up to 1 MW to access small-scale technology certificates (STCs). This expansion is intended to support commercial, industrial, agricultural and community solar projects that currently fall outside the small-scale pathway but below the large-scale threshold.

When is the SRES expansion expected to take effect, and is it confirmed?

The expanded SRES is expected to commence on 1 October 2026, but this represents an announced intention rather than a confirmed operative entitlement. The expansion is subject to the required regulations being made. Businesses should not treat the announcement as proof that a proposed system already has that entitlement. Confirm the enacted requirements and application arrangements for your actual installation date before finalising your certificate strategy or investment case.

How does the SRES expansion affect project economics for medium-sized solar installations?

The government estimates that expanding the SRES could reduce upfront installation costs by around 20 per cent. For example, a 250 kW system could save approximately $68,000 in upfront costs and generate around $50,000 in annual electricity savings, while an 850 kW system could save approximately $136,000 upfront and $175,000 annually. These estimates depend on site conditions, consumption patterns, certificate prices and commercial arrangements, so actual outcomes will vary.

Which sectors are expected to benefit most from the SRES expansion?

The higher threshold targets the commercial and industrial solar market, including manufacturers, farms and agricultural businesses, retailers and shopping centres, warehouses and logistics facilities, schools and hospitals, and community organisations. These organisations currently operate systems in the 100 kW to 1 MW range that cannot access STCs, making them candidates for the expanded scheme once regulations are finalised.

How might the SRES expansion affect the choice between STCs and LGCs for new solar projects?

Moving the SRES threshold to 1 MW is likely to make STCs the more attractive certificate pathway for many new projects within the 100 kW to 1 MW range, since STC benefits are generally reflected upfront rather than created progressively from metered generation. This may reduce future volumes of new LGC-generating solar systems below 1 MW. However, our preliminary view is that the practical effect on the broader LGC market may be limited, given the modest contribution of mid-scale systems to total LGC supply.

What key details about the SRES expansion are still to be confirmed before finalising a certificate strategy?

Details still to be confirmed include whether extensions to existing solar systems will qualify, how STCs will be calculated for systems above 100 kW, the applicable deeming period, installer and accreditation requirements, treatment of projects contracted or under construction before 1 October 2026, interaction with Victorian Solar Project-Based Activities VEECs, restrictions on combining solar STCs with other state incentives, and how declining SRES obligations through to 2030 will affect certificate creation for larger systems.

Could the SRES expansion affect Victorian Solar certificate (VEEC) opportunities under Activity 47?

The expansion of STCs to 1 MW could improve the combined certificate value available to some Victorian projects rather than necessarily displacing VEEC opportunities, since eligible projects may be able to claim VEECs alongside STCs or LGCs, subject to program requirements. We do not currently expect the announcement alone to significantly affect VEEC market volumes or pricing, but the detailed treatment of larger systems will need to be reviewed against Victorian Solar Project-Based Activities rules once federal regulations are released.

What should a business planning a 100–1000 kW solar system do before committing to a certificate strategy?

Avoid finalising your certificate strategy based solely on the announcement. Review the likely STC benefit under final regulations, whether the project has commenced or entered binding contracts, potential eligibility for VEECs or other state incentives, whether an existing LGC application should continue, certificate ownership provisions in installation and power purchase agreements, and network connection requirements and approval timeframes. We can assist by reviewing your project stage, location and proposed equipment against the expected final rules and helping structure your funding options.

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