New innovation funding launches to reduce solar energy costs

ARENA is scaling its support for research and development (R&D) and commercialisation of Australian solar photovoltaic (PV) by introducing the Ultra Low-Cost Solar (ULCS) funding round. With a value of $60 million in funding, it aims to push innovation and take solar to ultra low-cost levels to meet the objective of a Levelised Cost of Electricity (LCOE) for utility-scale solar PV of under $20 per MWh.

Applicant criteria

• ARENA is seeking applications from a broad range of businesses, which can include but is not limited to, Australian universities, research groups and innovative businesses, to accelerate cost reductions and meet the LCOE objective.
• This is a competitive funding round under ARENA’s Research, Development and Commercialisation (RDC) Program, formerly referred to as TRAC Program. It is open to applications for projects which have achieved a Technology Readiness Level of at least three at the time of applying.
• ARENA is seeking sizeable and bold projects valued at $8 to 10 million, meaning fewer projects will be funded. They encourage cross collaboration across sectors, and will look favourably at proposals that utilise artificial intelligence (AI).
• Collaboration between overseas and Australian companies is accepted, however the Australian entity must lodge the application. Multiple applications can be submitted, however if it is for the same project, it is ideal to aim for one stream where the strongest should be selected for lodgement.
• Applicants from areas of end-of-life management or solar PV recycling would not be suited for the ULCS funding round, and should apply to a separate program for Advancing Renewables. 

Round objectives

ARENA seeks ambitious proposals that can make a significant contribution through six Focus Areas across two streams:

Stream 1: Cells and modules

• Increase efficiency: Develop large size cells for next generation solar modules at over 30 per cent module efficiency
• Reduce cost: Reduce system cost to below 30 cents per watt
• Improve stability: Improve stability of cells and modules for utility-scale solar farms to meet a minimum asset life of 30 years, with longer asset operating lifetimes expected.

Stream 2: Balance of Systems, and Operations and Maintenance

• Reduce Balance of System (BoS) deployment cost: Cost reductions for utility-scale solar PV deployment toward 30 cents per watt. Achieving this is expected to require novel approaches for constructing solar farms including simplifying mounting designs, prefabrication and/or improved installation (e.g. automation through AI and robotics), and other BoS design innovations (e.g. larger module sizes)
• Reduce Operations & Maintenance (O&M) costs: Research and commercialisation of innovation to reduce O&M costs, risks and complexity
• Other LCOE reduction and/or innovation to increase yield: Innovative solar PV system design to uplift solar farm performance, reduce cost and increase market adoption of Balance of System (BoS) innovation.

It should be noted that a project in Stream 1 is not competing against a project in Stream 2. The streams are separately assessed, each with $30 million in funding.

Key dates

Expression of Interest (EOI) applications are open on 5 August 2025 and close on 21 October 2025 at 11:59pm AEDT. EOI applications will not be accepted after this date.

ARENA expects to notify outcomes of the EOI Stage to applicants in December 2025. Applicants successful at the EOI Stage will be invited to submit a full application at this time.

Application requirements

Please refer to ARENA for details on response requirements.

Our R&D and government incentives team have extensive experience in securing numerous government grants for a range of clients across many different industries.

If you have any questions regarding the ULCS funding round or any other government grants, contact us today.