The Australian government has unveiled fresh funding to drive down the cost of solar technology as part of a wider goal of getting the cost of production of green hydrogen below A$2 (US$1.44) per kilogram.

The government’s independently run Australian Renewable Energy Agency (Arena) announced up to A$40 million in funding to support research and development into lowering the cost of solar photovoltaics.

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Arena said the funding would be directed towards projects that are aligned with the agency’s Solar 30 30 30 goal — targeting 30% module efficiency and reducing the total cost of construction of utility scale solar farms to 30 cents per installed watt by 2030.

The Australian government recently made “ultra low cost solar” a priority technology under its latest Low Emissions Technology Statement (LETS), which set a stretch goal of A$15 per megawatt hour, which Arena states is roughly a third of today’s cost.

The government believes this would leave Australia well placed to deliver “the world’s lowest cost clean electricity”, while also enabling Australian manufacturers and businesses to remain competitive globally with affordable and reliable energy.

The investment will be spread evenly across two streams, with A$20 million being invested in the research and development of cells and modules.

Another A$20 million will be directed towards accelerating innovation in the rest of solar PV systems, operations and maintenance in a bid to drive down the upfront and ongoing costs of utility scale solar PV.

“This A$40 million R&D funding round will support Australia’s solar researchers and industry to get behind the target of Solar 30 30 30 and drive the innovation that will deliver ultra low cost solar,” Arena chief executive Darren Miller said.

“Ultra low cost solar will be a vital component in helping Australia move towards a lower cost, largely renewable electricity system and achieve the goal of net zero emissions by 2050.”

Lowering the cost of hydrogen

Arena also sees ultra low cost solar as being key in achieving another of the government’s LETS goals, achieving green hydrogen production at a cost below A$2 per kilogram.

Arena believes lower cost solar will be key in scaling up production of low cost green hydrogen, which could also play a key role in decarbonising heavy industry and enable the production of low emission materials in Australia, such as green steel and aluminum.

In addition to domestic uses, Australia is also setting its sights on becoming a major hydrogen exporter, with the government focused on building demand, achieving low-cost hydrogen production at scale and reducing hydrogen delivery costs.

Analysis by Rystad Energy in September last year showed Australia a total of 69 gigawatts of planned green hydrogen projects in the pipeline.