Arena launches fresh quest for ultra low-cost solar with new $60 million funding round

The Australian Renewable Energy Agency (Arena) has announced a major new push for ultra low-cost solar, with the launch of a $60 million funding round targeting innovation in the production of solar cells and modules and cheaper methods of installation and operation.

Arena says the new funding round aims to help the nation’s leading universities, research groups and start-ups make “significant breakthroughs” on getting the installed cost of solar down to 30 cents per watt and the levelised cost of electricity (LCOE) below $20 per megawatt hour by 2030. 

Last October, Arena put the LCOE of large-scale solar at a global average of around $US0.044/kWh, or $A0.064/kWh, which makes it significantly cheaper than most fossil fuels, already. But Arena chief Darren Miller says costs must come down further in the dash to net zero.

“Ultra low-cost solar PV is a critical source of electricity … and will be a crucial enabler of the energy transition,” said Miller on Wednesday.

“ARENA has been at the forefront of investing in solar innovation since the Agency was established 13 years ago and has materially shifted the renewable energy landscape in Australia.”

The new funding adds to federal Labor’s $1 billion Solar Sunshot program, which was announced in March 2024 and then launched in September, with a first round of $550 million on offer to help companies scale up commercial manufacturing of solar PV modules and tracking and deployment technologies. 

In May, the “Maverick” rapid-deploying solar generation technology of Australian PV innovator 5B was named as the first to receive Sunshot funding, in one of Labor’s first major energy policy announcements since being re-elected.

The $60 million in new Arena funding announced this week will be split evenly across two streams and six focus areas, reflecting ARENA’s desire to support both the renewable transition in Australia, as well as build up new export industries.

The first stream focuses on cells and modules, providing funding to innovate increases in solar efficiency, stability, and reduce costs.

Specifically, ARENA is targeting the development of large size solar cells for next generation solar modules, delivering over 30 per cent module efficiency, and innovation in reducing system costs to below 30 cents per watt.

ARENA is also looking for innovators to improve the stability of solar cells and modules for utility-scale solar farms to extend the operating lifetime well beyond a minimum asset life of 30 years.

The second stream is specifically focused on reducing costs across balance of system (BoS) deployment and ongoing operation and maintenance (O&M) activities.

“Our ultra low-cost vision recognises that solar must be cheaper still to support and enable the renewable energy transition, especially if we are to decarbonise heavy industry and create new export industries,” said Miller.

“This funding round is seeking the pioneering innovation Australia is so well known for in solar PV to achieve that vision.”

The Solar PV R&D funding round is now open, with more information on applying available at the ARENA funding page.

Two webinar sessions are coming up in the second half of July to provide more information to prospective applicants, ahead of an early August opening for expressions of interest (EoI). EoI applications close at the end of the day on October 21, 2025.

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