The Australian federal government has announced a substantial A$1 billion investment aimed at transforming the domestic solar panel manufacturing sector into a global competitor.
The Solar Sunshot program, part of the Future Made in Australia strategy, seeks to reduce dependence on imported panels, predominantly sourced from China, and foster local production capabilities.
Despite the government’s optimism, the proposal has faced criticism from several quarters.
Leading economists and energy experts are concerned that the move might not only be futile but could potentially delay the nation’s renewable energy transition. They argue that inexpensive Chinese-made solar panels currently benefit Australia, particularly as it develops industries like green hydrogen.
The plan, which is yet to be detailed fully, will likely operate through production tax credits, rewarding manufacturers for domestically produced solar panels. This approach mirrors strategies employed in other sectors such as critical minerals and green hydrogen, as well as similar initiatives in the United States and Europe.
However, sceptics such as productivity commissioner Danielle Wood, and Rod Sims, chair of the Superpower Institute, argue that the initiative is unnecessary. They believe that leveraging cheaper, imported panels is more beneficial for reducing energy costs in Australia.
Richard Pettersson, CEO of Tindo Solar — currently the only Australian manufacturer of solar panels — considers the government’s support as a critical boost for the industry. He views the subsidy as a temporary but vital aid to help the local industry scale up and achieve global competitiveness without long-term government assistance.
Both Pettersson and energy minister Chris Bowen agree that 10 years is a reasonable period to have a local industry established and ready to operate without government support. Final details of the Solar Sunshot program will be released this year.
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