Report

Australia renewable energy market is projected to witness a CAGR of 12.1% during the forecast period 2025-2032, growing from USD 19.60 billion in 2024 to USD 48.88 billion in 2032. The worldwide push towards reducing greenhouse gas emissions and addressing climate change has increased the country's demand for renewable energy sources. The market is driven by government policies and incentives, rising demand for clean energy, technological advancements, corporate and investor commitments to sustainability, falling renewable energy costs, job creation and economic benefits, and international commitments and agreements. In addition, rapid urbanization and rising energy consumption with increasing renewable energy systems' resilience and dependability are fuelling the market growth.
Notably, Australia has initiated the construction of the world's inaugural "solar-hydro" station, employing heat generated from photovoltaic panels to drive turbines within a water-based reservoir. Upon its completion by the end of 2023, this project will yield an installed capacity of 300 megawatts and an annual generation of 3.6 gigawatt-hours. These elements are changing Australia's renewable energy landscape and encouraging the adoption of renewable energy sources for a more sustainable and environmentally friendly future.
Surging Solar Power Growth in Australia Renewable Energy Landscape
Australia is experiencing substantial growth in the utilization of solar power within its renewable energy landscape. The country's abundant solar irradiance is the key driver of this growth, ensuring a consistent and reliable solar energy supply throughout the year. Regions with particularly favorable solar conditions, such as Queensland, New South Wales, and Western Australia, have witnessed significant developments in solar energy utilization. Queensland's widespread adoption of rooftop solar systems is a noteworthy indicator of this growth. As of June 2023, more than 790,000 residential properties and small businesses in Queensland have installed rooftop solar systems, collectively generating 4,700 megawatts of clean and sustainable energy. Queensland, in particular, has emerged as a leader in household rooftop solar installations, with one in every three homes harnessing solar power.
This growing trend is not solely a result of Australia's favorable climate but also the influx of foreign direct investments into the renewable energy sector. These investments play a crucial role in creating a conducive environment for the continued expansion of the solar power market in Australia.
For instance, in August 2024, Australia approves SunCable which is a solar project on an unprecedented scale. The plant is designed to power three million homes and export renewable energy to Singapore also in the coming years. The 4 gigawatts will be used for domestic consumption, while 2 gigawatts will be exported to Singapore. This development highlights the rising investment in solar power sector which drive the renewable energy market growth in the coming years. The project is expected to be commissioned by 2030 with a projected cost of approximately USD 24 billion.
Government's Vital Role Creating Market Opportunities
Australia's renewable energy sector is thriving due to government regulations and incentives. The government has set clear objectives and frameworks, including the Renewable Energy Target and Small-scale Renewable Energy Scheme. These programs support renewable energy projects financially, fostering investment and industry expansion. Furthermore, at the state level, initiatives like CleanCo Queensland, a state-owned company, actively promote reliable clean energy solutions to develop 1,000 MW of new renewable generation capacity by 2025. These concerted efforts underscore the government's unwavering commitment to fostering a greener and more sustainable energy future for the nation.
For instance, in February 2025, as per Clean Energy Council report, Australia's large-scale renewable energy investment reached to around USD 5.7 Billion in 2024. In addition to renewables, 4,029 MW/11,348 MWh of new energy storage projects were committed in 2024. This development highlights the rising investment in renewable energy production which will drive the market growth in the coming years.
Additionally, in February 2023, the Energy and Climate Change Ministerial Council (ECMC) endorsed a review of the 2019 National Hydrogen Strategy. This review aims to strategically position Australia as a global leader in hydrogen production and export by 2030 while facilitating the decarbonization of domestic industries. These regulatory measures and incentives collectively drive the growth of renewable energy and sustainability in Australia.
Dominance of Solar Segment in Australia Renewable Energy Market
Solar energy sector has the potential to capture the highest share of the renewable energy sector in Australia due to natural factors, economic factors, and favorable policies. Australia experiences a favorable amount of solar with a comparison to other nations, hence giving rise to an available pool of solar that is reliable, making it a cost-effective and efficient utility-scale option of power. This natural benefit is combined with government support in the form of incentives, rebates, and high ambitions for renewable energy which render solar power play the key role. In addition, future policies have developed a stable investment climate to expand the solar production capacity that renders the segment dominant in the marketplace
Additionally, the cost of solar technology has plummeted in recent years, with large-scale solar PV costs dropping significantly and making solar power increasingly competitive with traditional energy sources. The cost reduction, combined with rising electricity prices, has made solar an appealing option for different sectors as a source of energy. In addition, rising environmental awareness and the desire to reduce carbon emissions further drive consumer and corporate interest in solar solutions in the country. The above-mentioned factors collectively ensure that solar energy remains the dominant force in Australia's renewable energy market.
In 2023, renewable energy sources accounted for 35% of Australia's total electricity generation, with solar contributing 16%, wind 12%, and hydro 6%. This marked the highest share of renewables ever recorded, representing a 1% increase compared to the 2022-23 financial year.

Victoria Dominates the Australia Renewable Energy Market
Victoria State has taken the lead in driving the country's transition to renewable energy. This leadership is further supported by Victoria's ambitious renewable energy targets, which include achieving 40% renewables by 2025 and 50% by 2030, as well as a strong pipeline of wind and solar projects in the forecast period. The state's proactive policies, reverse auctions for project financing, and significant investment in both utility-scale and distributed renewable energy have enabled Victoria to consistently add more capacity than any other state in recent years.
For instance, in 2024, According to the Clean Energy Regulator, Victoria accounted for one-third of all newly approved large-scale renewable energy capacity in Australia, surpassing other major states such as Queensland and New South Wales in new capacity additions. This development highlights the rising investment in new renewable energy projects which makes the region to dominate in the market.
Future Market Scenario (2025 - 2032F)
- Government policies aimed at promoting solar energy production are set to boost the demand for renewable energy in the country.
- Integration of solar energy sources in large-scale industrial applications creates the opportunity for renewable energy market growth in the coming years.
- Corporations are increasingly committing to carbon neutrality and renewable energy goals boosting the demand for renewable energy in the forecast period.
- Rising public awareness about climate change and the environment creates a market opportunity for renewable energy sector in the forecast period
Key Players Landscape and Outlook
Companies operating in Australia's renewable energy sector are actively pursuing a range of strategic initiatives to thrive in this rapidly evolving market. These initiatives encompass diversifying energy sources, investing in advanced technologies, engaging with local communities, and embracing sustainability goals. Furthermore, companies are forming partnerships and collaborations with other industry players, research institutions, and government bodies to drive innovation and achieve mutual goals.
For instance, February 2025, Tilt Renewables decided to enter into binding agreements to acquire a 100% interest in the Boco Rock Wind Farm from the Electricity Generating Public Company Limited (or EGCO Group) and Squadron Energy. Tilt Renewables' commitment to growth in renewable energy in NSW. This acquisition aligns with Tilt Renewables long-term strategy to be the leading wind developer and operator in Australia.
For instance, in November 2022, Vestas secured a significant contract from TagEnergy for the initial 756MW phase of the extensive Golden Plains wind project located in Victoria, Australia. Vestas will supply 122 of its V162-6.2MW EnVentus turbines and provide comprehensive engineering, procurement, and construction services for the project. This contract also includes a 30-year service and maintenance agreement, highlighting the Australian market's long-term commitment to renewable energy. Such collaborations and investments are essential for the continued growth and success of the renewable energy sector in Australia.