$350m for new large-scale solar projects

The Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) have announced $350 million worth of new funding initiatives for large-scale solar.

ARENA’s large-scale solar competitive round, worth $100 million, is seeking bids from major solar PV project proponents for grants of up to $30 million. The CEFC has meanwhile launched a complementary $250 million large-scale solar financing program, which will support projects with loan requirements of $15 million or more. The initiative will provide successful ARENA grant recipients with the opportunity to secure long-term debt finance to support their projects.

ARENA CEO Ivor Frischknecht said the competitive funding round aims to support a spread of projects, with the central aim of bringing down the cost of large-scale solar developments in Australia and achieving cost parity between large-scale solar and wind energy by 2020. The agency anticipates the funding round will lead to between four and 10 projects being funded, adding a further 200 MW of additional large-scale solar capacity to Australia.

“The goal is to reduce the cost of large-scale solar in Australia,” Frischknecht said. “The winning projects will need to meet a $135/MWh LCOE threshold. After that, it’s largely based on how much grant is needed — the less, the more likely to win.”

CEFC Chief Investment Officer Ted Dow added that the CEFC’s $250 million program — the largest lending commitment to the large-scale solar sector in Australia to date — will help drive down the cost of solar development and further strengthen Australian industries in the solar supply chain.

“The CEFC finance will be available over a longer term, at a fixed rate,” he said. “We see this as critical to providing added certainty and confidence to developers and producers in the large-scale solar supply chain, which is still developing in Australia.

“We will also seek to catalyse other sources of finance to support large-scale solar developments, through co-investment in debt and equity. In this way, we can help fill the funding gap in the large-scale solar sector and encourage greater participation by banks and other institutions as the sector expands and develops a track record of proven credit and operational performance.”

According to Dow, the cooperation between ARENA, CEFC and private co-inventors will help “build Australia’s expertise in solar and bring down development costs”.

“Projects seeking finance from the CEFC and funding from ARENA will benefit from our organisations working together during each stage of the application process, to minimise transaction and due diligence time and costs,” he said.

Applications for funding for large-scale solar projects from ARENA and finance from the CEFC open this month. Expressions of interest must be registered with ARENA by 9 October and submitted by 2 November. For more information, visit http://arena.gov.au/large-scale-solar-pv.