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What is solar power?

Energy created by the heat and light of the sun is called solar energy. Solar power is produced when energy from the sun is converted into electricity or used to heat air, water or other substances. Solar energy can also be used to create solar fuels such as hydrogen.

At the end of 2017, there was 398 GW of solar PV installed around the world, meeting around two per cent of global electricity demand. More solar photovoltaic energy (explained below) is added each year than any other type of energy generation, thanks largely to the rapid cost reductions that have been achieved in recent years.

How does solar power work?

There are two main types of solar power technology, solar photovoltaic and solar thermal.

1. Solar photovoltaic

Solar photovoltaic (also known as solar PV) converts sunlight directly into electricity using a technology known as a semiconductor cell or solar PV cell.

The most common form of solar PV cell is typically encased in glass and an aluminium frame to form a solar panel. One or more panels can be installed to power a single light, cover the roof of a house for residential use, or be assembled into a large-scale solar farm generating hundreds of megawatts of electricity.

Solar PV panels are currently the most widespread type of solar PV technology, however other types of solar PV are being developed for targeted applications including PV that can be integrated into buildings, flexible PV and even PV paint.

2. Solar thermal

Solar thermal converts sunlight into heat (also known as thermal energy), which can be used for a variety of purposes including creating steam to drive an electricity generator. This heat energy can also be used to drive a refrigeration cycle to provide solar-based cooling.

There are two main types of solar thermal technologies.

  1. Small scale thermal technology is used for space heating or to heat water (such as in a solar hot water system).
  2. Concentrated solar thermal harvests the sun’s heat to produce large-scale power generation. It uses a field of mirrors to reflect sunlight onto a device called a receiver, which transfers the heat to a thermal energy storage system. Energy can then be released from storage as required, day and night.

Solar power in Australia

Solar PV generated 3.1 per cent of Australia’s electricity in 2016-17, the majority of which came from small-scale rooftop PV. More than two million, or 21 percent, of Australian households now have rooftop solar PV, with a combined capacity exceeding 10 GW (visit the Australian PV Institute’s Live Map for live solar PV data). Installations continue to rise and the APVI’s SunSpoT online tool shows there is still plenty of potential on Australia’s remaining roofs.

Large-scale solar farms are also on the rise in Australia. At the end of 2018, large-scale solar farms operating in Australia generated over 1824 MW. It is expected that around 61 additional large-scale solar farms will be built in Australia during 2019.

How are we supporting solar projects?

Our purpose is to support the global transition to net zero emissions by accelerating the pace of pre-commercial innovation, to the benefit of Australian consumers, businesses and workers. By connecting investment, knowledge and people to deliver energy innovation, we are helping to build the foundation of a renewable energy ecosystem in Australia.

Australia’s capability in solar PV research and development is world-leading. Thanks in large part to our efforts, the cost of large-scale solar power has dropped to almost the same level as wind power, about five years earlier than first thought.

We have provided more than $290 million to around 300 solar research and development projects and our solar projects have helped to break at least 11 solar PV cell efficiency world records.

We also invest in concentrated solar thermal research, development and demonstration activities that combined, contribute to a global effort on next-generation technologies.

Knowledge sharing

Knowledge Bank iconWe share knowledge, insights and data from our funded projects to help the renewable energy industry and other projects learn from each other’s experiences.

Read solar energy project reports in the Knowledge Bank

Explore our solar energy projects

Learn how we work with renewable energy technologies

Last updated 01 September 2021
Last updated
01 September 2021


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