Commercial Solar Rebates Expanding to 1 MW

A major change is coming to Australia’s commercial solar market. The Australian Government has announced plans to expand access to the Small-scale Renewable Energy Scheme for solar installations up to 1 megawatt (MW), substantially increasing the existing 100 kW limit.

For Sydney businesses with warehouses, factories, industrial facilities and other large commercial buildings, that could fundamentally change the financial case for installing a larger commercial solar system.

Under the current rules, solar PV systems must generally be no larger than 100 kW to qualify for Small-scale Technology Certificates (STCs). Systems above that threshold have traditionally moved into the Large-scale Renewable Energy Target framework.

Under the announced changes, eligible commercial and industrial solar systems up to 1 MW are expected to gain access to an upfront incentive, with reporting indicating the new arrangements are intended to commence from 1 October 2026.

For some Sydney businesses, it may be time to revisit a solar project that previously did not stack up.

At present, the Small-scale Renewable Energy Scheme provides an upfront financial incentive through STCs for eligible solar PV systems up to 100 kW. The government has announced that the scheme will be expanded to cover significantly larger commercial solar installations, up to 1 MW, or 1,000 kW.

That is ten times the existing solar system capacity limit. The announced changes are specifically aimed at what has become known as the “missing middle” of Australia’s solar market: factories, warehouses, industrial properties, farms, schools and other commercial facilities that have large roofs and substantial daytime electricity consumption but have lagged behind residential solar adoption.

This could make systems such as:

• 150 kW commercial solar systems
• 250 kW solar systems
• 300 kW warehouse solar systems
• 500 kW commercial solar systems
• 750 kW industrial solar systems
• 1 MW commercial solar installations

more financially attractive.

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Not yet. As of 6 August 2026, the Clean Energy Regulator still lists the current SRES solar PV eligibility limit as 100 kW. The government has announced that the expanded arrangements are intended to begin from 1 October 2026. That makes the period before commencement a good time for businesses to begin investigating:

• electricity consumption
• interval meter data
• available roof area
• switchboard and electrical infrastructure
• network connection requirements
• proposed commercial solar system size
• solar self-consumption
• potential battery storage
• estimated commercial solar payback period.

A commercial solar project of this size requires more planning than simply putting panels on an available roof.

The 100 kW threshold has historically been an important dividing line in Australian solar. Eligible systems of 100 kW or less could access STCs, which are generally converted into an upfront discount on the solar installation.

Solar systems above 100 kW instead fell into the large-scale renewable energy framework and could potentially generate Large-scale Generation Certificates. While larger solar projects could still be financially attractive, the different incentive structure, approvals and project complexity could affect the business case.

By extending the small-scale style incentive to systems as large as 1 MW, the government is attempting to make medium-scale commercial solar simpler and more financially attractive.

For many businesses, the biggest opportunity is not simply receiving a rebate. It is being able to design a commercial solar system around the building’s actual energy consumption, rather than designing around the old 100 kW incentive threshold.

Consider a large Sydney warehouse that uses significant electricity between 7 am and 5 pm. The property may technically have enough roof space and electricity demand to justify a 250 kW, 500 kW or even larger commercial solar installation.

Under the old system, stopping at around 100 kW could sometimes make the incentive process simpler. The new arrangements could encourage businesses to ask a much better question: How much commercial solar does our business actually need?

A 250 kW solar system may suit medium to large businesses with substantial daytime electricity consumption. Potential applications include:

• warehouses
• manufacturing facilities
• distribution centres
• commercial offices
• automotive facilities
• cold storage facilities
• shopping and retail facilities
• schools
• clubs
• industrial units.

The right system size should not be selected purely according to available roof space. MPV Solar can assess electricity consumption data to understand when energy is being used and how much of the electricity generated by solar is likely to be consumed directly by the business. The Australian Government’s business solar guidance similarly recommends considering self-consumption when determining commercial solar system size.

Generation varies according to factors such as: location, roof orientation, panel angle, shading, system design, equipment efficiency, weather conditions.

Rather than relying on a generic generation figure, businesses should model expected solar production against their actual interval electricity data.

That provides a much more useful indication of potential electricity savings and commercial solar payback.

For larger industrial facilities, a 500 kW commercial solar system can potentially offset a substantial amount of grid electricity during daylight hours.

These installations can be particularly well suited to businesses operating machinery, refrigeration, processing equipment, air conditioning, pumps or other large electrical loads throughout the day.

A 500 kW commercial solar project requires detailed engineering and assessment of:

• electrical demand
• maximum demand
• network connection capacity
• switchboards
• protection systems
• roof condition and structural suitability
• export limitations
• inverter capacity
• monitoring
• future electricity requirements.

It should therefore be designed as an energy project rather than treated as an oversized residential solar installation.

Often, yes. Warehouse solar installation in Sydney is one of the strongest opportunities created by the new incentive threshold. Warehouses often combine two valuable characteristics: Large roof space + significant daytime electricity consumption.

Businesses operating warehousing, logistics, distribution, refrigeration or manufacturing may therefore have an opportunity to generate a substantial proportion of their electricity on site. Australia currently has considerably less solar installed across commercial rooftops than residential rooftops. Recent research cited approximately 5.6 GW of business rooftop solar compared with around 22 GW installed on homes, despite businesses having substantial electricity demand. That gap is exactly what the new commercial solar incentive is intended to address.

Factories can be particularly strong candidates for solar because manufacturing operations frequently consume large amounts of electricity during daylight hours — when the solar system is generating.

A factory solar panel installation can potentially supply electricity directly to equipment such as: manufacturing machinery, compressors, pumps, ventilation, air conditioning, refrigeration, process equipment, office areas, EV chargers and fleet charging.

High daytime consumption can increase solar self-consumption, reducing the amount of electricity that needs to be purchased from the grid.

Yes. Commercial solar can be installed across many types of industrial buildings, including factories, warehouses, workshops, logistics facilities and distribution centres. However, commercial solar for industrial buildings requires careful engineering. A proper assessment should consider the building itself as well as the electrical system. That may include:

• roof condition
• roof type
• structural loading
• roof access
• shading
• electrical capacity
• existing switchboards
• network connection requirements
• energy demand
• future business expansion
• EV fleet charging
• commercial battery storage.

Government reporting around the announced changes indicates incentives of approximately 20% of installation costs may be available in some circumstances, with potential savings for large qualifying projects reaching into the hundreds of thousands of dollars.

However, businesses should avoid treating a percentage figure as a guaranteed rebate. The actual financial benefit will depend on the final scheme settings, eligible equipment, system capacity, STC calculations and certificate value. A detailed commercial solar proposal should therefore show the estimated incentive separately from the underlying project cost.

There is no single commercial solar payback period that applies to every business. Payback depends heavily on how the business consumes electricity. Factors can include:

• commercial solar installation cost
• available rebate or incentive
• system size
• electricity tariffs
• daytime energy consumption
• solar self-consumption
• demand charges
• export rates
• operating hours
• system performance
• maintenance
• future electricity prices.

Government-backed business solar guidance notes that payback needs to be calculated according to the individual business and recommends analysing electricity consumption and expected solar generation rather than relying solely on generic figures.

For MPV Solar, this is an important sales message: Don’t size a commercial solar system around a headline rebate. Size it around the business.

Potentially  and this could become one of the biggest opportunities created by the new rules. Many businesses installed approximately 100 kW because this previously represented the upper limit for access to STCs. But the building itself may have:

• considerably more usable roof space
• higher electricity consumption
• new machinery
• increased operating hours
• EV chargers
• an electrified vehicle fleet
• future battery storage requirements.

If the business has grown since the original solar installation, its existing 100 kW system may no longer be optimally sized. The question becomes: If we were designing our commercial solar system today, would we still stop at 100 kW? For many businesses, the answer may be no.

Businesses considering systems above 100 kW should investigate the timing carefully. Because the announced expansion is intended to commence on 1 October 2026, the eligibility date and final rules could materially affect the financial outcome of a project. Rather than simply delaying everything, businesses can use the lead-up period to complete much of the feasibility work. That might include:

1. analysing electricity bills and interval data
2. conducting a commercial solar site assessment
3. reviewing roof space and condition
4. estimating the appropriate solar system size
5. assessing electrical infrastructure
6. investigating network connection requirements
7. modelling solar generation and self-consumption
8. comparing system sizes
9. calculating projected savings and payback
10. confirming incentive eligibility before installation.

This is the campaign message I would push hardest. Businesses that previously investigated a 150 kW, 250 kW, 500 kW or larger commercial solar system may have decided not to proceed because the economics, certificate structure or project complexity did not stack up.

Those calculations may now be outdated. If your Sydney warehouse, factory or commercial building uses significant electricity during the day, the expanded commercial solar incentive creates a good reason to revisit the project.

MPV Solar can assess your electricity usage, existing electrical infrastructure, roof space and future energy requirements to determine what size commercial solar system actually makes sense for your business.

Talk to MPV Solar about a commercial solar assessment and find out whether the new 2026 commercial solar rebate changes the numbers for your business.