The Commonwealth has announced that the Small-scale Renewable Energy Scheme will be expanded to cover rooftop solar systems up to 1 MW, ten times the present 100 kW ceiling. The Minister for Climate Change and Energy, Chris Bowen, made the announcement on 5 August 2026. The change is scheduled to take effect from 1 October 2026, subject to the necessary regulations being in place.
Current-guidance boundary: At review on 9 August 2026, this was an announced policy rather than an operative entitlement. No quote, contract, certificate calculation or connection decision should treat the 1 MW threshold as in force until the final regulation and current regulator guidance establish it.
The change to the scheme
Under the scheme as it stands, a rooftop system qualifies for small-scale technology certificates only up to 100 kW. Above that threshold an installation moves into the large-scale scheme, which carries a different certificate mechanism, different registration obligations and a materially different commercial process.
Lifting the ceiling to 1 MW moves an entire band of commercial and industrial rooftops into the simpler small-scale process. The Government states the effect is a reduction of around 20 per cent in the upfront cost of a mid-scale commercial system.
The worked examples published with the announcement put a 250 kW system at an upfront discount of approximately $68,000 against annual electricity savings of about $50,000, a 500 kW system at approximately $136,000, and an 850 kW system at an upfront discount of approximately $232,000 against annual savings of about $175,000.
The expansion carries no new appropriation. The scheme operates through certificates that liable energy retailers are required to acquire, and the Government describes the change as budget neutral on that basis.
The gap it addresses
Australian households have installed roughly 22 GW of rooftop solar. Australian businesses have installed 5.6 GW.
The Clean Energy Council, which had recommended the change in its 2024 consumer energy resources roadmap, describes the 100 kW cap as a long-standing brake on commercial installs. By its account more than 1,200 businesses a year install systems in the 90 to 100 kW bracket, sized to the ceiling rather than to their consumption, while fewer than 1,200 mid-scale installations were completed in the entire fifteen years between 2010 and 2025.
That pattern is the clearest evidence that the threshold, rather than demand, has been setting system size.
The scheme mechanics
The Minister confirmed the following detail at a Smart Energy Council member briefing on 7 August 2026. The regulation has still not been made, so each point remains subject to the final instrument.
- The change is to be made by regulation and does not require new legislation.
- Eligibility is to be determined by installation or connection date, on the same basis as the household battery program.
- Certificates are available for new systems and for expansions of existing systems, up to a maximum combined capacity of 1 MW. A 100 kW system may add up to 900 kW; a combined system above 1 MW falls outside the small-scale scheme.
- The certificate volume is based on five years of generation, matching the current arrangement for household systems installed in 2026.
- For systems between 100 kW and 1 MW, that five-year deeming period holds to 31 December 2030 rather than stepping down annually as it does for systems under 100 kW.
- Eligibility continues to require Clean Energy Council Approved Products, accredited installers and electrical compliance, and the inspection arrangements already applying to solar and batteries continue to apply.
If the final regulation adopts the briefing detail, the deeming point would be commercially significant because the stated certificate basis would not step down annually for systems in the identified band. It should not be built into a multi-year commercial pipeline until the final instrument confirms the calculation.
The Minister also confirmed that the household battery program is unchanged, and that batteries up to 100 kWh remain eligible with the rebate supporting the first 50 kWh.
Western Australia and the connection constraint
Cost is one constraint on mid-scale commercial solar. Network connection is the other, and it is the one that binds in the South West Interconnected System.
A commercial rooftop system in the 100 kW to 1 MW band on the SWIS requires network approval from Western Power, and the outcome commonly determines whether a system can export, at what limit, and on what timeframe. A federal certificate scheme does not alter that assessment. A site whose connection application constrains export to a fraction of its array is not made viable by a cheaper array.
Energy Policy WA has a separate consultation open on connection timeframes and data quality for distributed energy resources on the SWIS, covered in WA Government Opens Consultation on Solar, Battery and EV Charger Connections. Submissions close at 5pm AWST on 18 August 2026. For businesses in Western Australia, the connection reform is the half of the question this announcement leaves open.
The Minister has acknowledged that connection approval times are a barrier, and has said he will send a rule change request to the Australian Energy Market Commission to make connection timeframes faster and more consistent, and will write to distribution network businesses in the meantime.
That measure does not reach Western Australia. The Australian Energy Market Commission makes the National Electricity Rules, which apply to the states and territories of the National Electricity Market. The South West Interconnected System is not part of the National Electricity Market and operates under the Wholesale Electricity Market Rules instead. A rule change made by the Commission would not bind Western Power, and it should not be represented to a customer as a committed change to the Western Power connection process.
For Western Australian businesses, the connection question is therefore a state matter, and the Energy Policy WA consultation above is where it currently sits.
The maintained commercial solar and network connection guide organises the load, connection, scheme-status and project evidence checks that should precede a proposal.
Describing this to a customer
The scheme change is announced, not made. Until the regulation exists, the position that holds up is that the Commonwealth has announced an expansion scheduled for 1 October, that the stated saving is around 20 per cent, and that eligibility and certificate volumes will be confirmed when the instrument is published.
A commercial customer weighing a system above 100 kW now has a reason to consider the announced 1 October commencement rather than automatically sizing to the current ceiling. Any proposal should remain conditional on the final regulation and current scheme guidance.
Current-status note
This article was reviewed on 9 August 2026. The final regulation, eligibility date, certificate calculation and interaction with network approvals were not established when the article was reviewed. Before designing, quoting or contracting a system above the existing threshold, confirm the law and current scheme guidance with the Clean Energy Regulator (opens in a new tab) and obtain the applicable network connection advice. Related controlled context is available in the WA solar and battery compliance centre and the editorial standards.
Sources: Minister for Climate Change and Energy, Putting more roofs to work, 5 August 2026 (opens in a new tab); Smart Energy Council member briefing with the Minister for Climate Change and Energy, 7 August 2026, and the Smart Energy Council's statement on the expansion (opens in a new tab); Clean Energy Council member communication, 5 August 2026, and the Department of Climate Change, Energy, the Environment and Water fact sheet referenced within it; PV Tech (opens in a new tab); RenewEconomy (opens in a new tab).
The public ministerial release supports the announcement and stated examples. No public recording or transcript of the 7 August member briefing, Clean Energy Council communication or departmental fact sheet was retained with this article. Briefing-only mechanics therefore remain attributed and provisional.
