STC Changes Bring the Biggest Commercial Solar Reform in a Decade

While households and small businesses have benefited from straightforward incentives that helped make Australia a global leader in rooftop solar, commercial projects have fallen into an awkward policy gap - too large to access the Small-scale Renewable Energy Scheme (SRES), yet too small to benefit from mechanisms designed for utility-scale renewable energy.

The result has been thousands of businesses with suitable rooftops, strong daytime energy demand and a genuine desire to decarbonise, but without the policy settings needed to make larger solar projects stack up financially.

This week's announcement marks a significant shift.

On Wednesday, August 5th, Federal Energy Minister Chris Bowen announced that the SRES will be expanded to allow Small-scale Technology Certificates (STCs) to be claimed on commercial solar systems up to 1MW.

It is one of the most significant changes to Australia's commercial solar policy in more than a decade and reflects years of collaboration and advocacy from across the clean energy industry, led by the Smart Energy Council and supported by businesses, installers, manufacturers and advisors, including Smart.

Importantly, the Government has also confirmed that STCs for eligible commercial systems will retain their value through to 2030, rather than reducing each year under the current phase-down schedule. That provides much-needed certainty for businesses planning larger capital investments and removes one of the biggest barriers to delaying projects.

So, what does this mean for businesses?

For businesses considering solar, the immediate benefit is simple: the upfront cost of installing a commercial solar system has just become significantly lower.

With STCs now available for systems up to 1MW, projects that may previously have fallen outside the incentive framework can now access substantial upfront financial support.

Based on today's STC price (approximately $35 per certificate) and current deeming arrangements, the potential value looks something like this:

*Indicative installed costs based on current mid-market commercial solar pricing. Actual costs will vary depending on equipment selection, site conditions and installation complexity.

For many organisations, that level of support fundamentally changes the investment equation. Lower upfront costs improve project payback, strengthen return on investment and make it easier for businesses to justify larger systems that better match their long-term energy needs. Combined with falling technology costs and growing interest in battery storage, the economics of commercial solar have arguably never looked stronger.

What should businesses do now?

The expanded STC incentive is locked in through to 2030, so there's no need to rush purely out of fear of missing the rebate. However, there are good reasons not to wait.

This announcement is expected to trigger a significant increase in demand for commercial solar and battery projects as businesses revisit investments that may not have stacked up under the previous rules. That will inevitably place pressure on equipment supply, installation capacity and, importantly, grid connection approvals through Distribution Network Service Providers (DNSPs). As more projects enter the pipeline, longer lead times are likely.

If you've already received a quote for a commercial solar system, now is the time to have it reviewed. Projects between 100kW and 1MW may now qualify for a substantial upfront incentive that wasn't previously available, potentially changing the economics of the project altogether.

For businesses in NSW, it's also worth requesting a battery quote at the same time. Recent changes to the Peak Demand Reduction Scheme (PDRS) have significantly increased the incentives available for commercial battery storage, and in many cases those incentives can be combined with the expanded STCs. Reviewing your solar and battery options together will give you the clearest picture of the opportunity and ensure you're making the most of the support now available.

Why this matters

This announcement isn't just about extending an incentive. It's recognition that commercial and industrial businesses have a critical role to play in Australia's energy transition.

Unlike households, commercial sites often have large, unshaded roof space, high daytime electricity consumption and significant opportunities to pair solar with battery storage. Every megawatt of commercial solar installed reduces demand on the grid during the day, creates opportunities to store renewable energy for later use and helps defer costly investment in network infrastructure.

In other words, when businesses invest in clean energy, everyone benefits.

That's been the industry's message for years, and it's now backed by compelling evidence.

Released alongside the announcement, Nexa Advisory's report, Unlocking the Benefits of Commercial and Industrial Rooftop Solar and Batteries, highlights just how much untapped potential exists across Australia's commercial and industrial sector. The report estimates there is 63.3GW of technical rooftop solar potential, yet only around 4GW has been deployed to date.

Its modelling suggests that with the right mix of financial support and market reform, commercial solar and battery uptake could deliver:

• Up to $39.7 billion in annual gross system benefits
• Around 21.9 million tonnes of emissions reductions each year
• Lower wholesale electricity prices
• Reduced peak demand across the electricity network
• Greater energy resilience through distributed generation and battery storage

These aren't benefits enjoyed only by the businesses investing in solar. They flow through the entire electricity system by reducing network congestion, lowering wholesale prices and supporting the integration of more renewable energy.

For businesses, this announcement creates a clear opportunity to revisit projects that may previously have been marginal, delayed or considered out of reach. For the industry, it signals a welcome shift in thinking: commercial and industrial energy users are no longer being overlooked—they're being recognised as an essential part of Australia's clean energy future.

After years of being the missing middle, commercial businesses are finally getting the support their contribution deserves.