The Australian government has launched the Solar Sunshot programme, a A$1 billion (US$650 million) investment to support an Australian solar module manufacturing industry, to widespread support from the sector.
The funds will go towards grants and subsidies to encourage companies to invest in solar manufacturing in Australia, following in the footsteps of similar measures elsewhere in the world, most notably the Inflation Reduction Act (IRA) in the US and the Net Zero Industry Act (NZIA) in Europe. The government will work with the Australian Renewable Energy Agency (ARENA) to scale up solar manufacturing, and plans to use the funds to support the building of ingots, wafers, cells, modules and “related components”, which include inverters and solar glass, with the agency to begin work in April.
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Australian prime minister Anthony Albanese announced the investment at the former site of the Liddell Power station, a retired coal plant in the historically coal-reliant Hunter Region of New South Wales (NSW), and stressed that Australia should not be the “last link” in the global solar supply chain.
“I want a future made in Australia. And I want a future made in our regions,” said Albanese. “Places like the Hunter that have powered our nation for more than a century will power our future.
“We have every metal and critical mineral necessary to be a central player in the net zero transformation, and a proven track record as a reliable energy producer and exporter.”
Manufacturing capacity, residential deployment
Albanese’ comments come within the context of Australia leading the world’s rooftop solar sector, with the country adding 3.1GW of rooftop solar capacity last year, according to the Clean Energy Council (CEC). In March 2023, the CEC reported that Australia’s distributed rooftop solar sector alone accounted for 14% of the country’s energy consumption in the 2022-23 summer months, as solar deployments grow across the country.
However, domestic solar manufacturing in Australia has languished: as of February this year, the entire Australian solar manufacturing sector consisted of just 160MW of manufacturing capacity, belonging to Australian company Tindo Solar, according to report from ARENA.
“The lost opportunity for solar manufacturing has been immense,” said John Grimes, CEO of the Smart Energy Council in response to Albanese’s announcement. “The past three waves of solar technology, which led to a trillion dollar global industry, were all invented in Australia.
“Finally, we will capture some of that value for Australia, creating revenue for Australian innovation and retaining the value for the Australian people.”
“The missing piece of the puzzle here is establishing a strong sovereign manufacturing capability that captures this innovation and expertise to meet more of the extraordinary demand, both here and overseas, for solar products,” added CEC CEO Kane Thornton.
Launching at Liddell
Albanese noted that the majority of the Sunshot funds will be used to support the conversion of the Liddell power plant to a solar manufacturing facility. The project’s owner, Australian energy company AGL Energy, has started to decarbonise operations at the project, closing the plant in April 2023, and announcing in December 2023 plans to build a 500MW 2-hour duration battery energy storage system (BESS) at the facility.
Today, AGL also signed a memorandum of understanding with Australian solar developer SunDrive to assess the viability of building a jointly owned solar manufacturing plant at the Liddell site.
Elsewhere in NSW, the state government has launched the first round of its Net Zero Manufacturing Initiative, where local businesses will be able to bid for US$178.6 million (A$275 million) in funding to support a range of clean energy projects. Developers can bid for a share of the funds, with US$65 million (A$100 million) earmarked for low-carbon product manufacturing, as the state looks to encourage more investment into renewables production.
Albanese’s announcement is the latest development in the Australian renewables sector, following the launch of 12 Renewable Energy Zones by the government of Queensland earlier this week. Australian solar manufacturer 5B also spoke to PV Tech Premium earlier today about its plans to expand its manufacturing capacity in both India and Australia, representing growing interest in the Australian solar manufacturing space.
