The 2026 federal budget did not rewrite the rules for a standard 6.6 kW rooftop job. It did two things that matter to installers: it pushed commercial solar into the small-scale scheme, and it kept funding behind the Cheaper Home Batteries Program while the discount keeps shrinking on a fixed timetable.
If you quote residential only, the budget changes your life less than the calendar does. If you quote commercial, a lot just got more interesting. Here is how to read it without the press-release gloss.
Mid-scale solar moves into STCs
The Small-scale Renewable Energy Scheme now extends to mid-scale solar. Systems above 100 kW and up to 1 MW installed from 1 October 2026 create STCs, with a fixed five-year deeming period. The Renewable Energy (Electricity) Regulations were amended in 2026, and the Clean Energy Regulator (CER) has said applications open in mid to late November 2026. Below 100 kW nothing changes. Above 1 MW the system stays in the large-scale scheme and creates LGCs. The government framed it as taking roughly 20 per cent off the cost of medium-sized systems, and as budget neutral. Our mid-scale solar STC guide covers the mechanics in full.
Here is why it matters in dollars. Take a 200 kW system in a zone 3 postcode (Sydney, Brisbane, Perth, Adelaide), rating 1.382:
| Item | Under the old rules (LGCs) | Under the new rules (STCs) |
|---|---|---|
| Certificates | about 280 LGCs a year, created as it generates (assumes 1,400 kWh per kW per year) | 200 x 1.382 x 5 = 1,382 STCs, created up front |
| Price assumption | $7.50 (inside the roughly $6 to $9 range of September 2026) | $38 (the market has been roughly $38 to $40) |
| Cash | about $2,100 a year, trickling in to 2030 | about $52,500 once the claim clears |
Those are illustrations, not quotes. The STC price moves, the LGC price moves, and your yield depends on orientation and shading. The shape is the point: a large lump now rather than a thin stream later. For the LGC side of that comparison, see LGC vs STC.
What it does to a commercial quote
Three practical shifts follow.
The discount lands at the start. Commercial buyers will expect it netted off the contract price, the way a residential customer does. You carry the certificate value until it settles, so payment terms matter far more at $50,000 a job than at $1,700. Our piece on how long STC payment should take sets out what is reasonable.
The paperwork is residential-grade, not power-station-grade. No accreditation as a power station and no ongoing generation reporting for the certificates in this band. Installation evidence, a design, CEC-approved components and an assignment form do the work. The same photo discipline that protects a residential claim protects a 400-panel one, and an audit finding is bigger when the claim is.
The cut-off is the install date. A job installed on 30 September 2026 and one installed on 1 October 2026 sit under different regimes. Check how your contracts describe installation, and which date the regulator treats as the install date.
The battery program: bigger budget, smaller discount
The Cheaper Home Batteries Program budget has been expanded from $2.3 billion to $7.2 billion, as reported. That sounds like good news, and for demand it is: a funded program means no sudden shutdown of the discount. But funding and discount size are different things. The factor set by the CER keeps stepping down, and since 1 May 2026 it steps every six months. At the time of writing it is 6.8, stepping down to 5.7 on 1 January 2027 and 5.2 on 1 July 2027, and continuing down to 2030.
Tiers also apply since 1 May 2026: the first 14 kWh of usable capacity earns 100 per cent of the factor, 14 to 28 kWh earns 60 per cent, and 28 to 50 kWh earns 15 per cent. A 14 kWh battery at 6.8 makes 95 STCs, about $3,610 at $38. At 5.7 it makes 79, about $3,002. Run your own sizes through the battery STC calculator, and see the January 2027 battery changes for the answer in short form.
Residential solar: the quiet clock
For up to 100 kW, the rule is unchanged and unforgiving. The deeming period is five years for 2026 installs, four for 2027, and one by 2030, with the scheme ending on 31 December 2030. A 6.6 kW system in zone 3 makes about 45 STCs in 2026 and about 36 in 2027, a drop of roughly $340 at $38. Our deeming period and zone ratings guide has the tables, and the STC calculator does the arithmetic per postcode.
A worked cash-flow example for a mixed book
Picture an installer who does 20 residential jobs and two mid-scale jobs a month. The residential jobs average 45 STCs each: 900 certificates, about $34,200 at $38. Two 200 kW jobs add 2,764 STCs, about $105,000. The mid-scale pair is roughly three times the certificate value of the entire residential book, from two sites.
That changes how you should read a settlement term. On 20-business-day terms the residential book ties up about $34,000 for a month. The mid-scale jobs more than triple the float. A trader that settles in 24 hours, or a rate locked on lodgement, stops being a nice-to-have and becomes part of how you price. It also changes counterparty risk: if one buyer goes quiet, a $52,000 claim is the one that hurts. Ask any buyer how and when they pay before you hand over a mid-scale claim, and see our checklist for choosing a certificate trader.
What to do next
- Split your pipeline into under 100 kW, 100 kW to 1 MW, and over 1 MW. Each has a different certificate rule.
- Draft a mid-scale quote template with the STC discount as a separate conditional line, ready for when the CER opens applications.
- Re-run your cash flow at commercial job sizes. A single 200 kW job holds roughly $50,000 of certificate value, so settlement time stops being a footnote.
- Reset your battery quote dates. Build a December cut-off into your sales calendar so customers see what the January step costs them.
- Read the primary sources. The CER’s SRES pages and the amended regulations are the authority; a budget paper is not.
If you want a rate on commercial certificates when the process opens, see today’s rates and how STC trading works with Energy Merchants. For the wider picture of dated changes, start at scheme changes.