Australia Commits AUD 100 Million To Accelerate Small-Scale Hybrid Solar And Battery Projects

The Australian Government has announced a AUD 100 million investment through the Clean Energy Finance Corporation (CEFC) to accelerate the development of small and medium-sized renewable energy projects across the country. The funding will support the construction of up to 16 hybrid solar, battery energy storage, and battery retrofit projects under a new financing initiative known as the Distribution Connected Accelerator Program (DCAP).

The CEFC is partnering with infrastructure investment manager Infradebt to deliver the program, with construction of supported projects expected to begin in 2027. DCAP is primarily designed to finance renewable energy projects of up to 5 MW, while also allowing larger projects where suitable. These smaller projects are considered well suited to supply electricity to local communities and businesses and can connect to existing electricity networks more quickly than large-scale developments.

The initiative aims to bridge the gap between rooftop solar systems and utility-scale renewable energy projects by encouraging more distribution-connected generation. By making better use of existing electricity infrastructure, the program is expected to help connect additional renewable energy at lower cost while improving the reliability and affordability of electricity.

A key feature of DCAP is its concessional senior debt financing, which is intended to address one of the biggest challenges faced by smaller renewable energy developers. Although many of these projects are technically viable, they often struggle to secure funding because traditional project finance is generally focused on larger developments. Infradebt will select eligible projects through a competitive application process.

Infradebt has financed more than 80 infrastructure projects over the past 13 years, including over 40 distribution-connected renewable energy projects. The new initiative builds on the CEFC’s previous AUD 150 million commitment to Infradebt and is expected to unlock additional private investment in Australia’s clean energy sector.

Minister for Climate Change and Energy Chris Bowen said the investment supports the “missing middle” of renewable energy by enabling projects that can be delivered faster, connect to local electricity networks, and help provide cleaner, more reliable, and more affordable electricity while putting downward pressure on power bills.