Shining a light on the Solar Sunshot Program in Australia

What is the new Solar Sunshot Program?

Managed by the Australian Renewable Energy Agency (ARENA), Solar Sunshot is a federal program intended to boost domestic solar manufacturing capabilities.

It supports companies involved in various stages of the PV panel production process, from producing polysilicon to assembling finished modules, to strengthen the local solar industry and reduce reliance on imports. Notably, one in three households in Australia use solar panels, yet only 1% of them are locally produced. The government wants to increase this share to 20%.

Solar Sunshot is currently in its first phase, during which it will disburse a total of $550 million across two funding rounds (1A and 1B). Supported projects are expected to:

• benefit local communities (including First Nations groups),

• create new jobs in the solar industry, and

• strengthen the domestic PV production network.

The program is in sync with the Future Made in Australia agenda, which invests in workforce upskilling and supply chain building to create economic resilience.

How does ARENA decide which initiatives to support?

Solar Sunshot primarily funds projects related to PV panel manufacturing. Applicants need to explain how their projects will involve local communities and provide tangible benefits that help Australia move towards a carbon-neutral future.

Decisions are made based on extensive discussions with stakeholders, which include DCCEEW representatives and other environment and energy sector experts.

Are there location restrictions for projects?

All projects must be based in Australia, though the specific sites are chosen based on the project proponents. The program does not give preference to any particular Australian location.

Does the program exclusively support silicon-based PV technologies?

No. Solar Sunshot is open to backing mature, proven technologies and is not confined to any specific solar PV technology.

When can eligible projects expect to receive production credits?

Projects ready to proceed can expect to receive production-linked payments in the 2024/25 Financial Year, pending a finalized funding agreement with ARENA.

What does the Solar Sunshot Program aim to do?

The two funding rounds in Solar Sunshot’s first phase both target the same key objectives:

• Bolster the local PV supply chain’s resilience, competitiveness, and sustainability

• Lower barriers to domestic solar PV production

• Drive innovation and automation in solar manufacturing

However, while they share these goals, each round focuses on different stages of the solar PV lifecycle. Round 1A funds the actual production of solar panels and components, while 1B invests in research and planning for future production.

Round 1A

The first round finances commercial-scale PV manufacturing.

Eligible technologies include:

• Solar PV modules, cells, and components (such as framing and solar glass)

• Solar PV racking, tracking, and deployment systems

Projects must:

• Be at least TRL 8 and CRI 3 at the start of manufacturing

• Involve new or expanded manufacturing capacity

This round does not fund the production of ingots, wafers, polysilicon, and solar inverters. It does not support solar thermal projects, pilot-scale manufacturing, emerging technologies, testing facilities, recycling, feasibility studies, or FEED work.

Funding:

• Capital grants up to $50 million may be awarded for project development and construction costs. These grants will cover a maximum of 50% of the project’s budget.

• Production credits up to $350 million may be granted to bridge the cost gap between Australian-made solar technology and commercially available imports.

See the Funding Announcement for Round 1A for specific requirements and eligibility criteria.

Round 1B

The second round funds feasibility or engineering studies for commercial-scale solar PV manufacturing.

Eligible study topics include:

• Polysilicon production and quartz-to-silicon conversion

• Ingot and wafer manufacturing

• Broader solar innovations like inverters, advanced deployment, mounting structures, or other technologies that improve solar performance or reduce costs

Topics around solar PV modules, cells, components, or commercially proven racking, tracking, and deployment technologies are ineligible. 

Funding:

• Capital grants are expected to be between $1 and $5 million, but ARENA may consider amounts outside this range.

• Grants will cover up to 50% of the study budget.

See the Funding Announcement for Round 1B for more details. 

What does Solar Sunshot mean for the future of solar energy in Australia?

Boasting some of the most abundant renewable sources in the world, Australia has the potential to produce large-scale green energy for the export market. The country is keen on using this advantage to secure its local supplies and become a global clean energy superpower.

Central to these efforts are programs like Solar Sunshot. Focused on advancing local PV manufacturing, the fund is expected to:

• Speed up the development of high-efficiency, cost-effective solar technologies and expand Australia’s renewable capacity

• Scale up local manufacturing to reduce reliance on imports and fortify national energy security

• Generate high-skilled jobs in the renewables sector to drive economic growth and build community resilience

The program directly supports ARENA’s bigger Ultra Low-Cost Solar 30-30-30 vision, which aims to achieve 30% solar module efficiency and reduce installation costs to 30 cents per watt by 2030. Solar Sunshot hopes to streamline the supply chain by nurturing domestic PV manufacturers and helping ARENA push solar electricity prices below $20/MWh.

The fund also encourages partnerships with universities and tech companies to develop export-scale green energy industries. Combining local production’s strength with cutting-edge research supports Australia’s plans to sell solar power to other countries, making the sun a more accessible energy source for everyone.