Climate Change and Energy Minister Chris Bowen will announce an expansion of the Small-scale Renewable Energy Scheme to cut the up-front cost of installing solar systems for businesses, farmers and other commercial users by approximately 20 per cent. The expansion lifts the scheme's capacity from 100 kilowatts to one megawatt, targeting schools, supermarkets, factories and farm buildings.
Speech excerpts seen by the ABC show retailers could save almost $70,000 installing a 250kW solar system. A large retail complex or logistics warehouse could save more than $230,000 on an 850kW system. Those aren't trivial numbers for businesses navigating tight margins and elevated operating costs.
Building on Battery Success
The government said the move follows strong uptake of the Cheaper Home Batteries Program introduced in 2025, which provided a subsidy worth about 30 per cent of the up-front cost of a system. That program breathed new life into residential solar installations, which began to lag last year but have since picked up. Almost 4.5 million households now have rooftop solar.
Bowen will say in his speech that many residential solar panels are visible from an aeroplane over a capital city, but very few can be seen on industrial buildings. "The missing middle is mid-scale solar," he'll say. "Factories, warehouses, farming sheds and large industrial premises — big, empty roof space ripe for solar generation."
He'll also note, "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." Bowen will add, "This isn't just about energy bills, it's good for productivity, freeing up capital to invest back in their business."
Cutting Red Tape
Bowen will also ask the Australian Energy Market Commission to ensure network providers approve commercial and industrial solar more quickly. That acknowledgment of regulatory barriers reflects a recurring complaint from business operators who've struggled with approval processes.
See Saw Wine business development manager Maggie Jarrett said the New South Wales Central Coast winery has installed 30kW of solar across three farms and is looking to add more. "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 called the 20 per cent reduction "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 added, "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.'"
Industry Response
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. Potter added, "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 wasn'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:
The expansion represents a market-oriented approach to energy cost reduction, allowing businesses to reduce operating expenses through capital investment rather than ongoing subsidies. For small and medium enterprises operating on thin margins, a $70,000 to $230,000 reduction in up-front costs can determine whether a solar installation makes financial sense. The emphasis on productivity gains and freed-up capital reflects economic reality: lower energy bills mean more resources available for expansion, hiring and innovation. The minister's commitment to streamlining approval processes addresses a legitimate regulatory burden that's hampered commercial adoption. If network providers accelerate approvals, businesses gain faster access to cost savings without additional government spending. The program builds on demonstrated success with residential battery uptake, suggesting private actors will respond to properly structured incentives without mandates or heavy-handed intervention.