The Albanese government’s $1 billion Solar Sunshot program could be put to work as early as August with a tender for module manufacturing projects, according to a consultation paper on how best to kick-start the solar supply chain in Australia.
The Australian Renewable Energy Agency, which has been tasked with designing the policy in consultation with the Department of Climate Change, Energy, the Environment and Water (DCCEEW), has called for feedback on a design that proposes using a series of targeted funding rounds and production-linked payments.
Its newly released paper says the funding rounds would act as a call to market for specific projects to support certain segments of the solar supply chain, starting with PV module manufacturing.
According to an indicative timeline, it is proposed that Round 1 is launched in early August and Arena says it aims to make Round 1 funding decisions before the end of December 2024, subject to a range of factors including market readiness and final program design.
The early focus on making panels is bound to stir debate – and fire up the scheme’s detractors, who have argued that Australian made modules is the last thing the government should be investing in, given the global market is currently awash with cheap, China-made product.
But Arena has its reasons. As CEO Darren Miller told the Solar Insiders Podcast at the start of the month, the Sunshot is not just about making panels, but it is likely that making panels is “the first and easiest thing to do.”
“It doesn’t solve the supply chain challenge that the program ultimately aims to solve, because you’re still importing the vast majority of everything that then goes into making a module,” he said.
“But in the beginning it’s going to essentially be … a job of assembling those advanced manufactured components that are made elsewhere into modules for for sale in Australia,” he said.
There are some obvious contenders ready and waiting to compete for a slice of the funding. These include Australia’s only PV module manufacturer, to date, Tindo Solar, which in January announced plans to build a “gigafactory” that could make up to 1.9 million panels a year starting as early as mid-2025 – given the right government support.
The consultation paper says production-linked payments are likely to be the primary form of financial support offered through Sunshot, but consultation will help decide whether some funding should be used for capital grants or other forms of concessional support.
Feasibility studies and front-end engineering design (FEED) work could also be supported, but are not a primary focus of the program, Arena says.
Another company expected to be vying for first-round funding is Sydney-based SunDrive, a UNSW spin-off company backed by high profile investors including Mike Cannon-Brookes that is developing a technology that uses copper for PV cell metallisation, instead of silver.
The company’s plans, first set out last May, include building a factory focused on producing rooftop solar modules. It is also planning on manufacturing commercial size solar cells, including in a joint venture with AGL, announced on the same day as the Solar Sunshot.
“There is a credible pathway for building a solar manufacturing industry in Australia,” said Miller on Tuesday.
“A collaborative and committed approach from government and the private sector gives us the best chance at tackling this challenge.
“We’ll be using our deep industry connections and over a decade of experience accelerating Australia’s shift to renewables to ensure the program delivers for industry, communities and all Australians.”
Consultation is open until May 31. Arena says it will accept written submissions through online forms via the Sunshot webpage and will host two consultation webinars. For more information including the consultation paper, webinar dates and submission portal, visit https://arena.gov.au/funding/solar-sunshot/
