Time for a manufacturing renaissance, powered by renewables

With small policy adjustments, Australia can enjoy a manufacturing renaissance that delivers jobs, growth and emissions reductions.

Industrial policy is at the centre of global governments’ approach to net-zero strategies, as evidenced by the United States’ Inflation Reduction Act (IRA), India’s Production-Linked-Incentive program and the European Commission’s Green Deal Industrial Plan. 

Industrial planning is easy to get wrong and difficult to get right. But Australia has a once-in-a-generation opportunity to observe the strengths of other nations’ approaches, and to foster industrial collaboration between the private and public sectors in supporting the critical industries that will set us up for long-term success in our energy system. 

Thankfully, state and federal governments are on the right path, and with some additional policy measures Australia can enjoy a renewables manufacturing renaissance that delivers jobs and growth while also achieving emissions reduction targets and sovereign capability in a renewable energy system.

At Tindo Solar, Australia’s only manufacturer of solar panels, we are at the coal – or panel – face. We’ve managed to set up a successful manufacturing business, with minimal government support, in the face of intense competition from overseas manufacturers who are awash with public sector cash and policy support. 

This unique experience has given us hope that manufacturing renewables hardware at scale in this country is not only possible, but is an economic, environmental and ethical imperative. 

Economically, the International Energy Agency (IEA) estimates 1,300 manufacturing jobs could be created for each gigawatt of solar PV production capacity. Environmentally, locally made goods incur less freight carbon miles and production can be powered by renewable sources. And from an ethical perspective, locally made goods provide much better visibility of labour and environmental practices in the supply chain, a key risk in the renewables industry.  

Geopolitics also plays its part. The nations trying to incentivise renewables manufacturing believe it is critical to have sovereign capability in building wind, solar and battery hardware. Achieving an 82% Australian renewable grid by 2030 is a noble goal, but what if it’s all imported? What vulnerabilities do we heap on future generations?

Governments are recognising this, but what can they do to make it happen quickly and at lowest cost to taxpayers?

The first step is getting manufacturing capacity up and running. Doing this requires significant finance. The Commonwealth Government’s National Reconstruction Fund, as well as existing entities such as the Clean Energy Finance Corporation (CEFC), provide an ideal mechanism for securing the upfront capital required to build and kit out factories. With their backing, commercial lenders are also more comfortable providing finance, so initiatives like the NRF are ideal for getting projects off the ground. Other initiatives being championed by governments include New South Wales’ Net Zero Plan Stage 1, and Queensland’s Energy and Jobs Plan. All these government-led initiatives help to reduce the initial development costs and risks, and since many of the interventions offer debt or equity, taxpayers can recoup their investment.