Introduction
Signifying a giant step towards achieving its ambitious target of becoming a renewable energy superpower, the Australian government has just released the anticipated $1 billion Solar Sunshot program. Launched and administered by the Australian Renewable Energy Agency (ARENA), this tremendous program will help accelerate solar photovoltaic (PV) manufacturing in Australia and strengthen the nation’s clean energy supply chains.
As Australia moves towards a low-emission future, the Solar Sunshot program is an essential component of the nation’s energy future; it will prepare Australia to capitalise on the new economy jobs of the future and establish the country as a world leader in cheap, clean, renewable energy.
Program Objectives:
The following are the focus areas for driving innovation and supply chain resilience.
At the heart of the Solar Sunshot program are two key objectives:
- Develops Australia’s solar PV innovations at the commercial level to expand the economy and increase its product portfolio.
- Sustainably extend the length of the Australian supply chain for Solar PVs.
The program aims to kickstart a robust local manufacturing sector by making intelligent investments throughout the solar PV value chain. This effort will surely boost Australia’s shift to renewable energy and ensure that families and businesses have trustworthy energy sources and economic stability even during global supply chain issues.
The program’s design guidelines concern key industry players in identifying the key issues and opportunities for the Australian solar PV market.
Eligibility and Funding Rounds
The Solar Sunshot program is currently operating under two open funding rounds, each with its own distinct focus and eligibility criteria:
Round 1A: Solar PV Manufacturing Innovation
- Up to $500 million available in funding
- It helps the manufacturing of commercially-scaled solar PV technologies, including modules, inputs to modules (e.g., solar glass and frames), fixed structures that support solar PV products, and deployment systems (e.g., innovative racking)
- Expressions of interest are to be submitted by 10 December 2024, with total application submissions to be made by 30 April 2025
Round 1B: Solar PV Manufacturing Studies
- Up to $50 million in funding is available.
- It supports feasibility studies and front-end engineering and design (FEED) studies for commercial-scale production of solar PV.
- Complete applications should be submitted by 2 November 2025.
The first—and second-round applicants must possess an ABN and be Australian legal entities duly registered under the Corporations Act 2001. Projects initiated mainly in Australia are required, and co-funded commitments are a significant consideration criterion.
Funding Mechanisms and Structures
The Solar Sunshot program provides a range of funding mechanisms to support the growth of Australia’s solar PV manufacturing ecosystem:
- Capital Grants: Provides upfront funding to develop and start new or expanded solar PV manufacturing plants.
- Production Credits: Make extra payments per unit to compensate for the cost of production and a reasonable return on capital investment between the desired selling price and manufacturing cost. These are meant to expand the possibilities of increasing the domestic production capacity and increasing its competitiveness in the world market.
The program aims to provide the minimum amount of funding required to proceed. AREBA prefers applications in which project proponents are willing to contribute more than cash through cash and authorised in-kind contributions.
Assessment Criteria and Process
Many programs that apply for the Solar Sunshot program will undergo a robust set of eligibility and merit criteria so that only the best and most impactful projects are selected to receive funding.
Eligibility Criteria:
- Specific to the views to align with the outlined objectives and defined program scope requirement.
- Applicant’s compliance with legal and regulatory requirements
- Evidence of efficiency and capacity to complete the proposed project.
Merit Criteria:
- Ability to commercialise Australian solar PV innovations
- Contribution to the resilience and diversification of the solar PV supply chain.
- Technical and financial viability of the project
- Potential for exchange of knowledge and broader industry benefits to other stakeholders in the industry.
- Commitment to community responsiveness and creating positive social impacts
ARENA will adopt a collaborative approach to the assessment process and work closely with the applicants to fine-tune the proposal. This may include giving comprehensive directions, ensuring proper contact between the stakeholders, and supplying feedback on critical parts of the project.
However, in some funding rounds, ARENA could follow a ranked-based system, whereby the applications are considered and ranked to identify those deserving the funding. In others, it is ad hoc; applications may be considered strictly on a case-by-case basis. ARENA reserves its right to negotiate project scope or structure changes before making a final funding decision.
Strengthening Australia’s Solar Manufacturing Ecosystem
The Solar Sunshot program is a step forward in making Australia a renewable energy superpower. By investing in the commercialisation of local solar PV innovations and the development of a resilient domestic manufacturing industry, the program aims to unlock a range of economic and social benefits, including:
- Creation of thousands of quality, desirably secure jobs throughout the tiered supply chain of solar PV technology.
- The building up of local industrial capabilities and the diversification of the Australian economy.
- Improvement of energy security by reducing the reliance on imported Solar PV components
- Promising the learning and knowledge, managerial activities, skill development, and technology transfer.
- Beneficial implications for local communities, such as the First Nations group and the society overall, especially during the shift towards net-zero status
Notably, this program reflects the Australian Government’s commitment to the Community benefit principles. It also ensures communities benefit from public and associated private investments and greatly benefits workers, businesses, and communities across Australia.
Conclusion
This is a historic move by the government to support the renewable energy space by setting the target of investing $1 billion by launching the Solar Sunshot Program. This way, Australia is securing the long-term position for its successful investment in expanding the solar PV manufacturing industry. It is expected to experience dramatic growth in the global market shortly. Thus, creating new opportunities will solidify its status as a renewable energy superpower.
ARENA will engage industry players, innovators, and local communities to cultivate this laudable agenda. The Solar Sunshot program, which aims to advance innovation, supply chain integrity, and broad utility, will significantly enable a sustainable future in Australia.
Why is Australia establishing solar manufacturing?
Establishing solar PV manufacturing capability is consistent with the Government’s renewable energy superpower vision and ARENA’s vision for ultra-low-cost solar. The Solar Sunshot Program has the potential to drive innovation, help Australia connect to new global solar supply chains, create new job opportunities, and generate export opportunities. This assists Australian solar PV supply chain resilience in the long term.
How does ARENA determine eligibility?
The Eligibility Criteria is contained in Section 4 of the Round 1A and 1B Funding Announcements.
Will I/my organisation be able to apply for funding?
We encourage all potential applicants to review the Eligibility Criteria before applying for funding. Applications not meeting these criteria will be considered ineligible for funding and will not be assessed further.
What is the maximum amount of funding a project can apply for?
The Round 1A and 1B Funding Announcements (Section 3.1, Scope) set out the expected range of grant funding that can be applied for a single Project, which is up to $350m for Round 1A and up to $5m for Round 1B. Merit Criterion D in the Round 1A and Round 1B Funding Announcements details how ARENA assesses the financial aspects of Applications, including the ARENA grant request. Applications must justify why the identified grant amount is required to undertake the project and how this amount was determined.
Can I apply for multiple rounds or other ARENA funding?
Yes, an Applicant is not restricted from applying for multiple rounds or other ARENA funding.
How would my application be assessed?
Section 6 of the Round 1A and Round 1B Funding Announcements identify how Applications will be assessed under each Funding Round.
What if a project fails after being awarded funding?
Some projects awarded funding may not proceed for various reasons, and ARENA may work with Recipients to rescope or restructure the project to enable it to continue. Under Round 1A, bid bonds are proposed to manage the risk of project failure. For more information, please refer to items 7.7 to 7.12 (Page 13) of the Round 1A Funding Announcement.
Have you got more questions?
Read this document published by the Arena Solar Sunshot Program FAQs
