Ultra low-cost solar could power Australia’s next export boom ACAP modelling shows

Using innovative system-level energy modelling, ACAP researchers from ANU and UNSW have shown that ARENA’s 30-30-30 ultra-low-cost solar (ULCS) target has the potential to achieve rapid economy-wide decarbonisation, and unlock new export industries in Australia that are not yet cost-competitive at current energy prices.

The collaborative project "Mapping the market opportunities for ultra low-cost solar" is led by Professor Kylie Catchpole (ANU) and Professor Andrew Blakers (ANU), with key contributions from Dr Bin Lu (ANU), Dr Nathan Chang (UNSW) and Dr Simao Lin (UNSW). ANU developed the integrated modelling framework examining economy-wide decarbonisation and electricity market transformation, while UNSW contributed techno-economic analysis of green industries. 

This is the first integrated modelling to quantify the full industrial and export opportunity created by ultra-low-cost solar at national scale.

ULCS could support national energy systems delivering 1000 TWh/year for domestic use and 2600 TWh/year for export, creating a 2000 GW-scale PV market in Australia. This is the scale required to power a fully decarbonised economy while enabling large-scale production of green metals for global markets.

Dr Lu said, “The magnitude of the opportunity revealed by the analysis is very exciting. Used smartly, 2000 GW of solar PV could power a fully decarbonised domestic economy and support large-scale production of green metals for export – positioning Australia as a global supplier of green products while dramatically reducing national emissions.”

The modelling shows that ultra-low-cost solar fundamentally changes the economics of Australia’s energy transition.

Under the 30-30-30 vision:

• Electricity markets can deliver reliable 100% renewable power at costs well below today’s wholesale prices.

• Cost reductions flow directly into heavy industry.

• Green aluminium, ammonia and steel production can reach cost parity with conventional production.

• Aviation electro-fuels move significantly closer to commercial viability.

Project innovation in "Mapping the market opportunity for ultra low-cost solar"

The key innovation of this project is its integrated, system-level approach. Rather than treating industrial decarbonisation, electricity market transformation, and green commodity production separately, this study captures their interactions within an integrated, high-resolution modelling framework. This new approach reveals how ULCS can be a catalyst for economy-wide energy transition, driving energy system transformation and industrial decarbonisation. 

The techno-economic modelling is conducted using the new FIRM Energy model, which evolves from an electricity-sector optimisation framework into an integrated, economy-wide energy system model that enables coordinated modelling of sectoral energy transitions.  

The modelling frameworking used by ACAP researchers to map the economic opportunities arising from ulta low-cost solar.

The work was presented at the Asia-Pacific Solar Research Conference 2025 [4], with follow-on analyses now examining electricity network transitions and export-oriented clean energy pathways.

The findings have attracted national media attention. Renew Economy highlighted that cheap solar coupled with smart integration and energy use are essential to decarbonising industry [2]. In the Canberra Times, Bin Lu and Kate Lawrence outlined how solar-derived e-fuels could underpin a new export sector for Australia [3].

The findings shift the national conversation from ‘How much will decarbonisation cost?’ to ‘How large is the industrial opportunity if solar becomes ultra-low-cost?’

Dr Lu sums up, "Australia has abundant solar resources, and some of the world’s richest mineral reserves, such as iron ore and bauxite. Used smartly, cheaper renewable technologies could power Australia’s transition to a global supplier of green products." 

References

1. Lu, B., Thomson, C. J., Wang, S., Rahbari, A., McArthur, L., Liu, A., & Pye, J. (2026). Decarbonising heavy industry operations with low-cost onsite photovoltaics and battery storage. Solar Energy, 303, 114104. https://doi.org/10.1016/j.solener.2025.114104

2. Lu, B. (2025, 20 Nov). Falling solar and battery costs alone won’t decarbonise industry. Smarter energy use will be vital. Renew Economy. https://reneweconomy.com.au/falling-solar-and-battery-costs-alone-wont-decarbonise-industry-smarter-energy-use-will-be-vital/

3. Lu, B., & Lawrence, K. (2025, 14 Oct). The secret to making Australia a green fuel export superpower. The Canberra Times. https://www.canberratimes.com.au/story/9086209/australias-e-fuel-opportunity-leading-the-green-shift/

4. Lu, B., Catchpole, K., Blakers, A., Chang, N. (2025, 2–4 Dec). Ultra-low-cost solar for economy-wide decarbonisation. Presentation at the Asia-Pacific Solar Research Conference, Brisbane. Australian National University, Canberra; University of New South Wales, Sydney. https://www.drbinlu.com/presentations/Lu_APSRC_20251204.pdf