Australia’s ambition for ultra low-cost solar power has received its largest single federal investment to date, with the Australian Renewable Energy Agency (ARENA) committing up to AUD 105.6 million towards 20 cutting-edge research and development projects. Announced on September 1, 2026, this significant funding expansion aims to drastically reduce the cost of large-scale solar photovoltaic (PV) generation to 30 cents per watt by 2030, accelerating Australia’s transition to a more affordable and reliable energy system.

The increased allocation, originally set at AUD 60 million, reflects the exceptional calibre of proposals received and underscores a national push to maintain Australia’s leading role in solar innovation. The projects span the entire solar value chain, from advanced cell technology to novel solar farm design, construction, and operational efficiencies.

Driving Down the Cost of Solar Electricity

ARENA’s acting CEO, Chris Faris, highlighted that achieving ultra low-cost solar requires innovation beyond just the cells and modules. “Achieving ultra low-cost solar requires innovation across the entire value chain. From the solar cells and modules themselves through to the way solar farms are built, operated and maintained, these projects will help unlock practical solutions that support a faster, more affordable energy transition,” Faris stated.

The agency’s strategic goal is to reduce the installed cost of large-scale solar to 30 cents per watt and achieve a 20% module efficiency by 2030. This, in turn, targets a levelised cost of electricity (LCOE) for solar PV of under AUD 20/MWh. Such advancements would make solar-generated electricity significantly cheaper, benefiting consumers and industry alike.

Key Research Projects and Beneficiaries

Among the 20 projects receiving funding, major Australian research institutions are at the forefront of innovation:

  • University of New South Wales (UNSW): Academics from UNSW secured a substantial AUD 64.8 million for 12 distinct solar projects. These initiatives focus on improving the durability and efficiency of silicon solar modules, developing advanced materials to enhance cost-effectiveness, and implementing better monitoring solutions for solar farms.
  • Australian National University (ANU): The ANU will receive AUD 7.1 million to investigate low-cost parallel-connected perovskite/silicon tandem cells, a technology with the potential for higher efficiencies.
  • University of Sydney: Professor Anita Ho-Baillie’s team at the University of Sydney will receive AUD 7.4 million to collaborate with Australian manufacturer Unison Solar Energy on improving the stability of silicon-perovskite tandem cells, ensuring they retain efficiency over their lifetime.
  • Proa Energy: Melbourne-based Proa Energy was awarded AUD 4.1 million for its HiveOps platform, an AI-driven solution designed to help solar farm operators detect faults, manage risks, and reduce operating costs. This project alone is expected to cut the levelised cost of energy by 3-4% under typical conditions, potentially rising to 10-15% in extreme cases.

These projects are split into two streams: Stream 1 focuses on cell and module improvements, including perovskite and silicon tandem cell performance, while Stream 2 addresses balance of systems, AI-driven operations, and lightweight solar hardware.

“Australia has played a leading role in the development of solar technology, and these projects will help ensure we continue to strengthen that position.” — Chris Faris, Acting CEO, ARENA

Impact on Australia’s Energy Future

The drive for ultra low-cost solar is critical as Australia’s electricity demand is projected to nearly double by 2050, driven by electrification and the expansion of data centres. Lowering the cost of solar generation helps replace retiring coal plants and meet this surging demand reliably and affordably.

Currently, the average fully installed cost for residential solar panels in Australia ranges from $0.88 to $0.95 per watt for standard setups. For commercial systems, the cost per watt can vary, but the targeted 30 cents per watt for large-scale projects represents a significant reduction that will flow through to wholesale electricity prices. This ultimately benefits all energy users by reducing the overall cost of grid power. Understanding current installation costs is vital for consumers and businesses alike. For a comprehensive overview, refer to our guide on Solar System Installation Costs in Australia 2026: A Complete Guide.

Beyond just the upfront cost of panels, these research initiatives aim to improve the entire ecosystem of solar energy. Innovations in areas like AI-driven operations and module durability will lead to more efficient and long-lasting solar farms, reducing maintenance costs and improving overall energy output. This focus on the “balance of system” costs and operational intelligence is key to unlocking the full potential of solar. For households looking to manage their energy consumption and optimise their solar investments, exploring solutions like Best Home Energy Management Systems in Australia 2026: Slash Bills by $1,000+ Annually can further enhance savings.

This AUD 105.6 million investment reinforces Australia’s commitment to being a global leader in renewable energy technology, ensuring that solar continues to be a cornerstone of the nation’s energy security and economic future.