The SRES Change Lifting STCs to 1 MW: What the 'Missing Middle' Gets
From 1 October 2026 commercial solar up to 1 MW earns upfront STCs instead of large-scale certificates — here's what that actually means for your business, and where it doesn't help.
If your business has been quoted for a solar system somewhere between 100 kW and 1 MW, the rules changed on 1 October 2026 — and the change works in your favour. The Small-scale Renewable Energy Scheme (SRES) now covers systems up to 1 MW, not just the old 100 kW ceiling. This is the segment people call the 'missing middle': warehouses, farms, factories, schools and shopping centres that are too big for a simple residential install but too small to comfortably play in the large-scale certificate market. Here's what actually changed, what it's worth, and where it doesn't move the needle.
What the change does
Under the SRES, eligible systems create Small-scale Technology Certificates (STCs). The key feature of STCs is that they're generated upfront at installation — the installer deducts their value from your invoice, so you see the benefit as a lower sticker price on day one.
Before 1 October 2026, only systems up to 100 kW could do this. Anything larger had to generate Large-scale Generation Certificates (LGCs) instead — created over time based on actual generation, sold in a separate market, and generally more administratively involved. From 1 October 2026 the threshold rose to 1 MW, so systems in the 100 kW–1 MW band now earn STCs upfront.
The structure now looks like this:
| System size | Certificate type | How you get the benefit |
|---|---|---|
| Under 100 kW | STCs | Upfront, as before |
| 100 kW – 1 MW | STCs (new) | Upfront, since 1 Oct 2026 |
| Over 1 MW | LGCs | Over time, via the large-scale market |
What it's worth
According to the federal announcement ('Putting more roofs to work'), moving a 100 kW–1 MW system onto upfront STCs cuts the upfront cost by roughly 20%. That's the headline figure in the knowledge pack — we won't dress it up with a dollar amount, because the exact value depends on your system size, the STC spot price on the day, and your installer's deeming calculation. Ask any installer quoting you to show the STC line as a separate, itemised deduction so you can see exactly what it's worth on your job.
The practical upside: a lower upfront price shortens payback and removes the hassle of managing an LGC stream over years. For a business that just wants solar on the roof and a cleaner number on the invoice, that's a genuine win.
Here's the catch
A 20% cheaper system is still only worth building if the system itself pays. The SRES change lowers the cost — it does not change the physics of your site. A few things can quietly kill the economics regardless of the certificate type:
- Export limits and self-consumption. The value of commercial solar comes mostly from the energy you use on-site, not what you export. Feed-in tariffs are retailer-set in most states and have trended down for years — the typical range is just 3–10 c/kWh. If your business runs mostly at night or on weekends when the panels are idle, a big array can underperform badly.
- Oversizing to chase the rebate. The cheaper upfront price can tempt businesses to go bigger than their load justifies. Every kWh you export at a low feed-in rate is worth a fraction of a kWh you consume. Size to your actual daytime demand profile, not to the certificate.
- Network and connection constraints. Larger commercial connections can face export caps or costly network upgrades that no certificate scheme offsets.
Honest version: for some 'missing middle' sites the STC change tips a marginal project into a good one. For others — poor daytime load, tight export limits, expensive connection works — it makes a project that still shouldn't be built about 20% cheaper. Cheaper than it was isn't the same as worth it.
State schemes stack on top — sometimes
The SRES is national. On top of it, some states run their own commercial certificate schemes that can further reduce cost: NSW has the ESS and PDRS, Victoria has the VEU (VEECs), and SA has the REPS. QLD, WA, TAS, the ACT and NT generally have no equivalent commercial certificate scheme. Whether any of these applies — and what it's worth — depends entirely on your state and your project, so confirm the current terms before you bank on a number.
One scheduling note worth watching: the knowledge pack flags the 1 MW change as subject to regulations and recommends confirming commencement. It is in effect as at today, 13 October 2026, but if you're relying on exact certificate values, verify the current STC spot price and deeming rules — these move.
What to do before you sign
- Get your quotes to itemise the STC deduction separately, in dollars.
- Pull your interval (half-hourly) data and match system size to your real daytime load.
- Confirm your feed-in rate and any export limit on your connection.
- Check whether a state commercial scheme (ESS, PDRS, VEU, REPS) stacks for you.
We sell no panels, no inverters and no finance — we charge a fixed fee to tell you whether this system, at this size, on this roof, actually pays. Sometimes the answer is a confident yes. Sometimes the honest answer is that a 20% discount on the wrong system is still the wrong system. That's exactly the call an independent audit is for.
Want to know what actually pays for your place?
Get an independent, engineered read on your whole bill — solar, battery, tariff and the rebates you're really entitled to — for a small fixed fee. No system to sell, no sales call.
Start your audit — $100Figures in this guide are current at the date of publication and indicative only — rebate and certificate values change over time (federal battery certificates step down each January and July), and state schemes are amended often. Confirm the current numbers for your situation before you commit. This is general information, not personal financial advice.