Submitting a completely redesigned theme question

Is there a way to inform people of the significant changes before they click to update in their dashboard

Not as far as I aware.

or should I submit this as a new theme?

I think this might be your best option. You could call it something like “Celestial Lite Reloaded”.

I know what you mean. I sometimes feel very constrained as to what I can and can’t change in some of my own WPORG themes. You want to change some area but you’ve also got the issue of supporting existing users & making sure that any updates don’t wreck (from their pov) their site.

A new theme is definitely the way to go. Does the existing version of Celestial Lite have its own settings/options page? If so, that would be a great place to point your existing users towards the reloaded version with a view to perhaps scaling back support for the original version.

Are you plugging directly into the customizer or do you have an options page under the Appearance menu?

do you mean as a plugin?

Sorry – no. Just confirming that you had an Appearance -> Theme Options page. I use that page in my themes to both provide additional theme documentation (I went a bit overboard on post formats in one theme) and provide links to pre-made child themes as well as actually allowing people to configure the theme’s settings. I think it’s a great way to communicate directly with your users and, providing you’re not pointing to something spammy or trying to nag people too much, it shouldn’t fall foul of any of the the theme review guidelines.

Definitely a good place to promote the reloaded theme. You could also update the original theme’s description in style.css to mention the reloaded version and that will also appear on the theme’s page in the Repo.