The Australian Renewable Energy Agency (ARENA) has committed an unprecedented AUD 105.6 million to twenty research and development projects, marking its largest single investment in solar photovoltaic (PV) research to date. Announced on September 1, 2026, this significant federal push aims to dramatically reduce the cost of large-scale solar power generation, with the ambitious target of achieving solar electricity below $20 per megawatt-hour (MWh) by 2030.

The funding initiative is a cornerstone of ARENA’s ‘ultra low-cost solar’ ambition, which also seeks to drive down installed solar costs to 30 cents per watt within the next four years. For Australian households and businesses grappling with rising energy costs, this investment signals a federal commitment to making solar power not just abundant, but exceptionally affordable, directly impacting future electricity bills.

Driving Down the Cost Curve

ARENA’s acting CEO, Chris Faris, emphasised that the expanded funding package, initially earmarked at $60 million, was increased due to the “exceptional calibre of proposals submitted.” This reflects a robust pipeline of innovation within Australia’s clean energy sector, a nation historically at the forefront of solar technology development.

“Achieving ultra low-cost solar requires innovation across the entire value chain,” Faris stated. “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.”

The twenty selected projects span two critical streams of research:

  • Stream 1: Cells and Modules: Thirteen projects will focus on enhancing core PV technology, including advances in perovskite and silicon tandem cell performance, improving ultraviolet resilience, and discovering new materials.
  • Stream 2: Balance of System and Operations: Seven projects are dedicated to optimising the broader solar farm ecosystem, covering areas such as artificial intelligence-driven operations, risk mapping, and innovations in farm design, construction, and maintenance.

UNSW Leads the Charge with $64.8 Million Investment

A significant portion of ARENA’s funding, AUD 64.8 million, has been allocated to the University of New South Wales (UNSW) for twelve distinct ultra-low-cost solar research projects. This represents UNSW’s largest single investment in photovoltaic research, reinforcing its historical role as a leader in solar energy innovation since its pioneering work in high-efficiency silicon solar cells five decades ago.

Professor Bronwyn Fox, UNSW Deputy Vice-Chancellor Research and Enterprise, highlighted the university’s excitement in partnering with ARENA to “drive the development of more affordable solar technology.” Projects at UNSW include:

  • Lower-temperature connections for advanced solar panels: A AUD 5.4 million grant to Professor Brett Hallam’s team aims to reduce bismuth and silver usage and lower manufacturing temperatures for more sustainable panels.
  • More efficient and durable silicon solar panels: Professor Timothy Schmidt’s team received AUD 7.1 million to develop technologies that convert ultraviolet (UV) light and improve panel longevity.
  • Developing more efficient and affordable tandem solar cells: Dr Kaiwen Sun’s AUD 6.3 million project focuses on combining chalcogenide and silicon materials to achieve up to 30% sunlight conversion efficiency.
  • Using AI to discover new solar materials: Dr Ning Song’s AUD 5.2 million project will leverage AI and modelling to find novel materials for next-generation silicon tandem solar cells, targeting 30% efficiency modules.

This concerted effort underscores the critical role of Australian research institutions in the global race for more efficient and cost-effective solar technology.

What This Means for Australian Energy Consumers

The long-term implications of this federal investment are substantial for Australian energy consumers. By targeting ultra-low installed costs and significantly cheaper solar electricity, the initiative aims to:

  • Reduce wholesale electricity prices: Greater penetration of extremely low-cost solar will put downward pressure on the wholesale market, benefiting all grid users.
  • Enhance energy security: A diverse and highly affordable renewable energy mix reduces reliance on volatile fossil fuel markets.
  • Accelerate renewable energy transition: Lower costs will expedite the deployment of large-scale solar, crucial for replacing retiring coal-fired power stations.

While this funding is primarily focused on large-scale solar, the technological advancements and cost reductions achieved at this level often cascade down to residential and commercial rooftop solar installations. Australians considering installing solar panels should be aware that ongoing research efforts are continuously improving efficiency and reducing costs, making solar an increasingly attractive investment. For current costs and considerations for residential systems, our guide on Solar System Installation Costs in Australia 2026: A Complete Guide provides detailed insights.

Australia has already achieved world-leading rates of rooftop solar adoption, with over 4.4 million households having solar panels installed. As the energy transition accelerates, investments like ARENA’s are vital to maintain this momentum and ensure that Australia remains a global leader in solar innovation and deployment.

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

This latest funding round reinforces the government’s strategy to back cutting-edge research to deliver a cleaner, more affordable energy future for all Australians. The impact of these projects will be felt across the entire energy ecosystem, from the largest solar farms to the smallest rooftop installations, ultimately contributing to lower bills and a more resilient grid.