Climate Change and Energy Minister Chris Bowen will announce an expansion of the Small-scale Renewable Energy Scheme that'll cut the up-front cost of installing solar systems for businesses, farmers and other commercial users by roughly 20 percent. The move targets what Bowen calls the "missing middle" — factories, warehouses, farming sheds and large industrial premises with vast roof space that's remained largely untapped for solar generation.
The expansion lifts the scheme's capacity from 100 kilowatts to one megawatt, opening the door for mid-scale installations that were previously out of reach for small and medium enterprises. Speech excerpts seen by the ABC show retailers could save almost $70,000 installing a 250kW solar system, while a large retail complex or logistics warehouse could save more than $230,000 on an 850kW system. Those aren't trivial numbers for businesses operating on thin margins.
Leveling the Playing Field
The government's push comes after households embraced batteries following the introduction of the Cheaper Home Batteries Program in 2025, which offered subsidies worth about 30 percent of a system's up-front cost. That program breathed new life into residential solar installations, which had begun to lag but have since picked up. Almost 4.5 million households now have rooftop solar — panels visible from an aeroplane over any capital city, according to Bowen.
But commercial and industrial buildings tell a different story. "The missing middle is mid-scale solar," Bowen will say in his speech. "Factories, warehouses, farming sheds and large industrial premises — big, empty roof space ripe for solar generation." He'll add that the technical rooftop potential for solar on commercial, industrial and agricultural rooftops could exceed 80 gigawatts. "That's an opportunity we should miss no longer," he'll say. "This isn't just about energy bills, it's good for productivity, freeing up capital to invest back in their business."
Red Tape Remains a Barrier
Maggie Jarrett, business development manager at See Saw Wine on the New South Wales Central Coast, said her winery has installed 30kW of solar across three farms and is looking to add more. But bureaucratic hurdles remain daunting. "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 said.
Jarrett welcomed the 20 percent cost reduction as potentially decisive. "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," she said. "I think the other piece is that it's indicating that the government supports this sort of development, which always makes financial people kind of put their ears up and say, 'Hey, if the government's backing it, there's probably more opportunity in this space.'"
Bowen will also ask the Australian Energy Market Commission to ensure network providers approve commercial and industrial solar more quickly — a recognition that financial barriers aren't the only obstacle.
Industry and Advocates Respond
Smart Energy Council policy head Rob Potter called the expansion a "game changer," particularly when coupled with the government's battery subsidy program. "Adding solar to commercial and industrial rooftops is the equivalent to 10 coal-fired power stations," he said. "When small and medium businesses can permanently slash their own electricity bills … then they'll increase their profits, their competitiveness and create more jobs."
Australian Conservation Foundation climate policy advisor Annika Reynolds welcomed the announcement but said increasing renewable energy uptake isn't enough on its own. "The Albanese government isn't nailing it when it comes to fossil fuel exports, but on the domestic renewables front it's just about bang on," she said. "However, pressing down on the accelerator for renewables alone is unlikely to get Australia to 82 per cent renewables by 2030, which is what we need for a safe climate and an energy independent grid."
Reynolds urged the Albanese government to "explore every possible lever to firming up the closures of remaining coal and gas clunkers in Australia."
Why This Matters:
Small and medium businesses operate at a structural disadvantage when it comes to capital-intensive investments like renewable energy. They can't access the same financing terms as large corporations, and up-front costs often make clean energy upgrades unaffordable despite long-term savings. By cutting installation costs by 20 percent and signaling government backing, this expansion helps level that playing field. It's not just about individual businesses saving money — though a $70,000 or $230,000 reduction matters enormously to a retailer or warehouse operator. It's about whether Australia's economic transition will leave small enterprises behind or bring them along. When businesses can reinvest savings into wages, expansion and competitiveness rather than energy bills, that's productivity growth with broad benefits. And with 80 gigawatts of untapped rooftop potential equivalent to 10 coal plants, closing the "missing middle" gap is essential to meeting 2030 renewable targets without relying solely on large-scale projects that face their own land-use and approval challenges.