Australia has been remarkably successful at installing residential solar. However, commercial and industrial (C&I) solar has not experienced quite the same level of adoption.
Drive through almost any industrial estate and you will find factories, warehouses, manufacturing facilities and distribution centres with enormous roof areas and substantial electricity consumption, but often surprisingly little solar. That represents a significant opportunity.
According to the Clean Energy Regulator (CER), just 28 MW of capacity across 80 power stations in the 100 kW to 1 MW category was accredited under the Large-scale Renewable Energy Target during the first half of 2026.
The regulator has described this segment as Australia’s “missing middle.”
That could be about to change. Since 1 October 2026, eligible solar installations larger than 100 kW and up to and including 1 MW can access Small-scale Technology Certificates (STCs).
Previously, projects above 100 kW generally relied on Large-scale Generation Certificates (LGCs), with revenue realised progressively through electricity generation. Under the expanded STC arrangements, eligible mid-scale projects benefit from a fixed five-year deeming period, potentially delivering a substantial upfront financial incentive. The federal government estimates the changes could reduce installation costs by around 20%.
Applications for the expanded scheme are expected to open in mid to late November. For C&I businesses, that could materially change project payback calculations.
Victoria offers another interesting dimension.
Through the Victorian Energy Upgrades (VEU) program, eligible commercial solar installations between 30 kW and 200 kW can access Victorian Energy Efficiency Certificates (VEECs) under the deemed Activity 47 pathway, potentially alongside federal STCs.
Larger projects can explore project-based measurement and verification incentives, including the Solar PV Direct Measurement method, known as SMM4, under the state’s Measurement and Verification Specifications Version 9.0.
However, the certificate pathways are not interchangeable. SMM4 measures actual solar savings, excludes exported solar energy from those savings and does not permit double counting of the same abatement under federal renewable energy certificates. Getting the incentive strategy right before installation is therefore important.
But solar is only half the story. The bigger opportunity may be changing how we approach commercial battery storage.
Too often, battery proposals focus almost exclusively on reducing maximum demand charges, improving self-consumption or providing some form of backup power.
These are legitimate benefits. However, they represent only part of what a properly designed battery system can potentially deliver.
What about energy arbitrage? What about participating in a Virtual Power Plant (VPP), earning revenue from wholesale electricity markets or providing frequency control ancillary services (FCAS)?
The Australian Energy Market Operator’s June quarter 2026 report showed just how important battery trading has become. Grid-scale battery charging and discharging influenced price-setting in 36% of National Electricity Market dispatch intervals, compared with 17% a year earlier.
The opportunity for C&I customers is not identical, but the underlying principle is relevant.
Consider a hypothetical commercial battery rated at 500 kW / 1 MWh. If the battery charges using 1 MWh of electricity purchased at a wholesale price of $50/MWh, the energy costs $50. Assuming 90% round-trip efficiency, it could subsequently discharge 900 kWh. At a wholesale price of $300/MWh, that energy would be worth $270.
That is a gross trading margin of $220 from one cycle. It is not $220 in profit. Network charges, retailer and aggregator arrangements, battery degradation and operating constraints all matter. Nor can an ordinary commercial customer automatically access wholesale prices simply by installing a battery.
Nevertheless, the example demonstrates why limiting the battery conversation to maximum demand reduction misses opportunities.
There are already Australian examples. South Australia’s Central Irrigation Trust has worked with Enel X on more than 14 MWh of battery storage across five sites. The arrangement combines demand-charge management with VPP participation, wholesale electricity market opportunities and FCAS services. That is a substantially broader commercial proposition than traditional peak shaving.
Of course, these benefits cannot simply be added together without considering competing demands on the battery.
A battery discharging into the wholesale market may not have sufficient stored energy remaining to manage a factory’s next demand peak. Backup capability also requires appropriate system design, switching and protection. Genuine UPS performance should never be assumed.
Successful projects need to evaluate site load profiles, electricity tariffs, wholesale price exposure, network export limits, connection requirements, battery cycling and market participation agreements.
Just as importantly, they need a control strategy that decides when electricity is more valuable being consumed, stored or exported.
For installers and designers, this requires a change in thinking. Instead of asking only how much solar and battery capacity a business needs, perhaps we should be asking how that business can extract the greatest commercial value from its energy assets.
Australia’s new STC arrangements may help accelerate commercial solar adoption. But the real opportunity lies in combining solar generation, intelligent storage and electricity market participation into a properly engineered financial and operational strategy.
The next generation of C&I projects should not simply reduce electricity bills.
Where the economics and network arrangements allow it, they should create new revenue opportunities as well.
Author: Veli Markovic, Head Training Facilitator, Greenwood Solutions
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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