The Australian federal government is set to expand the Small-scale Renewable Energy Scheme (SRES) from 100 kilowatts to one megawatt, significantly reducing the cost of installing solar systems at schools, supermarkets, factories, and farm buildings by about 20 percent.

Climate Change and Energy Minister Chris Bowen will announce the expansion during an address at the National Press Club on Tuesday, August 4th, 2026. The government estimates that retailers could save nearly $70,000 on a 250kW solar system, while large retail complexes or logistics warehouses might save over $230,000 on an 850kW system.

Since its inception in 2011, the SRES has primarily benefited residential solar installations and smaller commercial systems under 100kW. Businesses and farmers have struggled to benefit due to this cap, which is insufficient for larger facilities. According to the Institute for Energy Economics and Financial Analysis, Australia's residential solar capacity is about 22 gigawatts, whereas businesses have installed only 5.6 gigawatts, mostly from systems below 100kW.

The expansion follows the success of the Cheaper Home Batteries Program introduced in 2025, which provided subsidies covering roughly 30 percent of upfront costs, leading to widespread battery adoption among households and businesses.

Ms Jarrett, representing agricultural interests, highlighted that "red tape has been a massive barrier for us and just trying to understand the complexity behind that red tape, when you are an agricultural business, is difficult, especially small and medium businesses." She added, "A 20 per cent reduction is a massive amount when you're looking at 1-megawatt solar panel developments, probably enough, as well, to enable that kind of business case to your banks to be able to get loans."

The technical rooftop potential for solar on commercial, industrial, and agricultural rooftops could exceed 80 gigawatts, an opportunity the government aims to capitalize on. Ms Jarrett also noted, "This isn't just about energy bills, it's good for productivity, freeing up capital to invest back in their business."

While several analysts have predicted that Australia may not meet its target of 82 percent renewable electricity generation by 2030, Minister Bowen has expressed confidence that the goal will be achieved.

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