Solar STCs are Expanding: What the 1MW Change Means
From 1 October 2026, the Federal Government is expanding solar PV eligibility under the Small-scale Renewable Energy Scheme (SRES) from 100 kW to 1 MW. This tenfold increase brings many larger commercial and industrial solar projects into the STC scheme that were previously above the eligibility limit.
Here’s what’s changing and, more importantly, what the 1 MW STC expansion means for commercial solar projects in practice.
The scheme behind the savings
The Small-scale Renewable Energy Scheme (SRES) is an Australian Government renewable energy incentive that provides an upfront financial benefit for eligible solar PV and other small-scale renewable energy systems. Eligible systems create Small-scale Technology Certificates (STCs) based on factors such as system capacity, location and the remaining deeming period. These STCs can then be traded, helping reduce the upfront cost of installing renewable energy systems.
With solar PV eligibility expanding from 100 kW to 1 MW, the SRES can now support a much broader range of commercial and mid-scale solar projects.
What's changing from 1 October 2026
Eligible system size increases from 100kW to 1MW. Mid-scale solar systems can access the simpler SRES/STC framework for the first time.
The incentive is delivered upfront. Eligible systems can receive their STC benefit upfront, the same way the existing 100kW scheme works.
Solar expansions can qualify too. If a site already has solar, additional capacity may still be eligible, provided the total solar capacity at the site remains within the 1 MW limit and all other eligibility requirements are met.
The deeming period is locked at five years through to 2030. This provides greater certainty around the STC calculation for eligible systems in the 100 kW–1 MW range.
What stays the same?
Systems up to 100 kW continue under the existing SRES rules, while systems above 1 MW remain under the Large-scale Renewable Energy Target (LRET) and LGC framework.
What this looks like in practice
Based on the government's own worked examples:
A 250kW system is estimated to generate around 345 MWh a year, working out to an approximate $68,000 saving on the upfront system cost.
A 500kW system scales up to an approximate $136,000 saving.
Across the board, the government estimates around a 20% reduction in upfront system cost for eligible sites.
(For those curious about mechanics: working backwards from these figures, the numbers line up closely with the existing STC formula of capacity × zone rating × deeming period, at an implied certificate value of roughly $39 per STC. In other words, the new mid-scale bracket looks like it will use a similar calculation method as the current SRES scheme.)
Can it be combined with battery incentives?
Yes. Depending on the project and location, the expanded solar STC incentive may be combined with other eligible federal and state incentive pathways.
Federally, the Cheaper Home Batteries Program also operates through the SRES and provides an upfront STC-based incentive for eligible battery systems. This means an eligible project may be able to access STCs for both the solar PV system and the battery, subject to the specific eligibility requirements for each.
In NSW, eligible batteries may also access incentives through the Peak Demand Reduction Scheme (PDRS). For certain commercial battery activities, installing qualifying new solar within the required timeframe can also increase the number of PRCs generated by the battery project.
In Victoria, eligible commercial and industrial solar systems between 30 kW and 200 kW can generate VEECs under VEU Activity 47. The VEU rules allow an eligible C&I solar project to claim VEECs as well as STCs and/or LGCs, creating an additional incentive layer for qualifying Victorian projects.
The bottom line
If your site has a solar system between 100kW and 1MW planned, or you're looking to expand an existing system, this change makes the numbers considerably more attractive from 1 October 2026. Get in touch with our team for a site assessment to see what your specific savings could look like.