Government expands discount scheme to encourage larger businesses to install rooftop solar

The Albanese government plans to broaden its renewable energy incentives to encourage larger businesses, farms, and community facilities to install solar systems up to ten times larger than currently permitted. Energy Minister Chris Bowen announced the expansion of the Small-scale Renewable Energy Scheme on Wednesday, addressing the "missing middle" in Australia's energy transition.

While rooftop solar and utility-scale solar installations are thriving, the government identifies a gap in solar generation for large industrial premises like factories, warehouses, and farms. Currently, there is four times more residential solar installed per capita than commercial buildings in Australia, with a similar inverse ratio in Europe.

Bowen's announcement includes widening the solar discount to cover installations up to 1 MW in size, potentially reducing installation costs for commercial, industrial, and agricultural rooftops by around 20%. For instance, a medium-sized retailer installing a 250kW solar system could save about $68,000 upfront on installation and generate 345 megawatt-hours of electricity annually, resulting in $50,000 in annual electricity cost savings.

A larger 850kW system, suitable for manufacturing businesses, large retail complexes, or logistics warehouses, would see an upfront discount of approximately $232,000 and generate 1,173 megawatt-hours annually, saving around $175,000 in energy costs.

The expansion aims to eliminate installation delays faced by businesses, which often encounter network service provider approval issues. Bowen is urging the Australian Energy Market Commission to expedite and streamline the approval process for commercial and industrial solar installations. The expansion is projected to be budget-neutral, as the scheme operates through market mechanisms, with solar system installations generating certificates purchased by energy companies.

Roofs in Australia have the potential to supply at least 25% of the nation's annual electricity use.

While the Albanese government's progress in renewable energy is commendable, critics argue that more needs to be done to transition away from fossil fuel exports and achieve a 82% renewable energy target by 2030. The Australian Conservation Foundation welcomes the expansion, urging the government to explore additional measures to accelerate the closure of remaining coal and gas facilities.