SGU (Small Generation Unit)

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

SGU stands for small generation unit. It is the legal category under the Renewable Energy (Electricity) Act for small renewable generators that can create STCs. The usual SGU is a rooftop solar photovoltaic system. Small wind and micro-hydro systems also qualify.

The size limits are set in the regulations. For solar, an SGU is up to 100 kW and no more than 250 MWh of annual generation. Small wind and hydro have far lower limits, 10 kW and 6.4 kW respectively, each with a 25 MWh annual limit. Systems above these limits fall outside the SGU category.

In practice

Almost every installer’s claim starts with an SGU. The certificate count depends on the kilowatt rating, the postcode zone and the deeming period, which is 5 years for 2026 installs, then 4 for 2027 and so on down to 1 in 2030. See deeming period. Because the SGU is deemed to generate its output up front, the installer receives STCs at installation and no ongoing meter reading is needed.

From 1 October 2026 the scheme extends to solar above 100 kW and up to 1 MW, with a fixed five-year deeming period. These are not SGUs in the traditional sense, but they create STCs. The CER said applications open mid to late November 2026. See mid-scale solar and the mid-scale solar STC pillar.

Common confusion

An SGU is not a power station in the LGC scheme. Accredited power stations create LGCs on measured generation each year. An SGU creates STCs once, upfront, on deemed generation.

Another trap is adding two small systems on one site to stay under a limit. The CER looks at the installation, and splitting an array to dodge the 100 kW line is treated as a compliance risk, not a clever workaround.

For the process, see STC trading and the deeming period guide. The glossary has related terms.