Small Generation Unit (SGU)

Written and checked by the Energy Merchants desk · Reviewed 3 October 2026

An SGU, or Small Generation Unit, is the regulator’s term for a small renewable power system that qualifies for STCs. Most Australian rooftop solar systems are SGUs.

The size limits

Under the regulations, an SGU for solar PV is a system of up to 100 kW with annual output under 250 MWh. The limits for other technologies are smaller: up to 10 kW for wind and up to 6.4 kW for hydro. Systems above these sizes are treated as power stations and create LGCs instead.

The mid-scale change

From 1 October 2026, solar systems above 100 kW and up to 1 MW create STCs with a fixed five-year deeming period, with applications reported to open from mid to late November 2026. Below 100 kW nothing changes, and above 1 MW remains LGCs. See mid-scale solar and the mid-scale solar STC guide.

In practice

If you install a 10 kW system for a home, it is an SGU and creates STCs from the deeming period and the postcode’s zone rating. If you install a 400 kW commercial system after 1 October 2026, the new mid-scale rules apply. If you install a 2 MW array, you are in LGC territory.

Common confusion

SGU describes the generating system, not the battery. Batteries under the Cheaper Home Batteries Program create their own STCs through a different formula. See battery STCs.

It is also not the same as an SPS, a stand-alone power system. An off-grid system can be an SGU if it meets the criteria. See SPS.

The certificate trading glossary and the wider glossary have the rest of the vocabulary.