Beyond 100 kW: Why Commercial Solar Projects Deserve Another Look
Updated: Sep 17
For a long time, 100 kW has been something of a psychological line in Australian commercial solar.
For a long time, 100 kW has been something of a psychological line in Australian commercial solar. It isn't necessarily the point where a business stops needing more solar. It isn't a technical limit on what can be installed. And it certainly isn't the point where every commercial site reaches its optimum system size. But it has been an important threshold within Australia's renewable energy certificate framework, and as a result it has influenced the way many commercial solar projects have been designed and discussed.
That may be about to change.
The Australian Government has announced plans to expand eligibility under the Small-scale Renewable Energy Scheme, or SRES, from solar systems of up to 100 kW to systems of up to 1 MW. The Government intends for the change to apply to eligible mid-scale solar installed from 1 October 2026, subject to the necessary regulations being in place. The Clean Energy Regulator has confirmed that systems above 100 kW and up to 1 MW are proposed to become eligible for Small-scale Technology Certificates under the expanded arrangements.
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1. Why 100 kW became such an important number
Under the current framework, eligible solar PV systems up to 100 kW can participate in the SRES and create Small-scale Technology Certificates, commonly known as STCs.
Larger systems have traditionally moved into the Large-scale Renewable Energy Target framework and may instead generate Large-scale Generation Certificates.
Both mechanisms have value, but they work differently.
The SRES generally provides the certificate value upfront, which is one reason STCs have become such a familiar part of the commercial solar proposal.
For a business assessing a 90 kW, 100 kW or 120 kW project, the change in certificate treatment above 100 kW has therefore been more than an administrative detail. It can influence cash flow, project simplicity and the way the initial investment is presented. That has occasionally created a situation where the incentive framework helps shape the system size before the site's actual energy requirements have been fully considered.
2. Start with the load, not the threshold
The better starting point for commercial solar has always been the site's electricity consumption.
A 100 kW system may be exactly right for one business and substantially undersized for another.
A warehouse operating mainly during daylight hours may have a strong opportunity to consume a large proportion of solar production onsite. A manufacturing facility with continuous process loads may support an even larger system. A school, recreation facility, farm, accommodation venue or multi-building campus will each have a different load profile again. This is where interval data becomes important.
Rather than asking how much solar can fit on the roof, we can begin by looking at when electricity is being used, how consistent that demand is, what happens seasonally, how much electricity is being imported during daylight hours and what future demand might look like.
The Australian Government's own guidance encourages businesses to look at renewable energy together with demand management, energy efficiency, load shifting and electrification rather than treating generation in isolation.
The answer may still be 100 kW.
"But it might also be 180 kW, 350 kW or considerably more."
3. The opportunity isn't limited to rooftops
Commercial solar is often discussed as though every project begins and ends with available roof area.
For many sites, that makes sense. A large warehouse roof can be an extremely valuable energy asset.
But commercial and industrial properties can also have unused land, car parks, agricultural areas or adjoining space that may make ground-mounted solar worth considering.
This is particularly relevant across regional Victoria, where businesses, farms, schools, tourism operations and community facilities may have significantly more available land than suitable roof space.
"Ground-mounted solar can also avoid some of the issues associated with older roofs, structural limitations or buildings that may be modified during the life of the solar system"
The important point is not that ground mount is better than rooftop solar.
It is that the site's physical layout should be part of the design process rather than assuming there is only one place the system can go.
4. What difference could the proposed SRES expansion make?
The Federal Government estimates that extending the SRES to systems up to 1 MW could reduce the upfront cost of eligible commercial, industrial and agricultural installations by around 20 per cent.
Its indicative examples suggest support of about $68,000 for a 250 kW system and $136,000 for a 500 kW system. These figures are examples rather than guaranteed project incentives, and actual outcomes will depend on the final regulations, system eligibility, installation date and certificate value.Those numbers are large enough to affect a commercial investment decision. But we wouldn't use them as a reason to simply install a larger solar system.
The project still needs somewhere useful for the electricity to go.
Installing 500 kW of solar on a site that regularly uses only a fraction of that output during the day can create a very different commercial outcome from installing the same system at a facility with strong daytime consumption.
Export capacity matters.
Network connection requirements matter.
Tariffs matter.
Future load matters.
And increasingly, battery storage may matter too.
5. Bigger solar can change the battery conversation
One consequence of larger commercial solar systems is that businesses may find themselves with more energy available during the middle of the day.
Sometimes exporting that electricity is economically sensible.
Sometimes the network will limit how much can be exported.
And sometimes the value of using that electricity later is greater than the value of sending it back to the grid.
This is where battery storage starts to become part of the discussion.
"A battery can potentially absorb surplus solar and discharge it later, reduce peak demand, shift grid consumption into cheaper periods or provide some level of backup capability."
But that doesn't mean every larger solar project needs a battery. Solar and batteries should each have a job.
If the solar system already has extremely high self-consumption and there is little value in shifting energy into another period, the battery business case may be relatively weak.
On another site, a battery may unlock value that isn't visible when solar is assessed on its own.
This is why we increasingly prefer to model the whole site rather than simply quote individual technologies.
6. Existing projects are worth revisiting
There is another group of organisations we think should pay attention to the proposed SRES changes.
Those that looked at solar previously and stopped.
Perhaps the system size was being constrained around 100 kW.
Perhaps a larger project didn't quite meet the organisation's investment criteria or was constrained by budget.
Perhaps the roof was unsuitable but land was available.
Perhaps network constraints made exports unattractive.
Or perhaps electricity prices, operating hours and site demand have changed since the original assessment.
A solar feasibility study is not permanently right or wrong. It reflects the information and economics available at the time.
Technology pricing changes. Incentives change. Electricity prices change. Businesses expand. Equipment is electrified. New loads are added. Batteries become more affordable.
Sometimes an old project deserves a new set of numbers.
Nyawi Pty Ltd works with businesses and organisations to understand energy consumption and assess practical opportunities across commercial solar, battery storage, energy procurement and energy resilience. If your organisation has previously looked at a commercial solar project — particularly one that was designed around the 100 kW threshold — the current changes provide a good reason to revisit the modelling. |
This article provides general information only. Government programs, certificate values, eligibility criteria and available funding can change. Current requirements should always be confirmed before entering into contracts or committing to expenditure.
