The latest version of the BNEF New Energy Outlook for Australia shows investment in utility-scale solar declined to AUD 379 million ($263 million) in the second half of 2025, down from AUD 582 million in the first six months of the year.
BNEF said five large-scale solar projects totalling 621 MW of capacity were financed in the final six months of 2025. All five included co-located battery energy storage.
“Standalone utility-scale solar projects are declining,” BNEF said, noting that the slower financing activity over the year reflects the ongoing challenges that projects face. “Lengthy state and federal approvals, slow grid expansion, and social licensing issues continue to pose significant headwinds for the sector.@
BNEF also said the rapid growth of rooftop solar in Australia “is eroding market value for other renewables, especially large-scale developments.”
While investment levels dropped, more than 1.5 GW of utility-scale solar capacity was commissioned across Australia in the second half of 2025, up from the 241 MW commissioned in the first half. The increase took total operational large-scale solar capacity in Australia to 15 GW.
BNEF forecasts an additional 8.8 GW of utility-scale solar will be commissioned in Australia over the next four years, with 26.1 GW of capacity expected to be operational by 2035.
Cumulative rooftop solar capacity has reached 29.1 GW with an estimated 2.8 GW installed across Australian homes and businesses in 2025.
Installations are forecast to increase by 5% in 2026 compared to last year, with 3 GW of new capacity expected to be added.
Rooftop solar capacity is forecast to reach 50.8 GW by 2035 with BNEF predicting the booming behind-the-meter battery market will continue to support new rooftop system sales and upgrades to larger solar systems.
Australia’s small-scale battery market exploded in 2025 with 3.9 GWh of capacity installed, more than doubling the size of the operating fleet to 6.5 GWh.
BNEF forecasts behind-the-meter battery capacity could reach 26.1 GWh by 2030 and 35.8 GWh by 2035.
Large-scale battery installations are also booming with BNEF estimating that as of December 2025, nearly 5.2 GW of utility-scale batteries were operational and 9.9 GW of batteries are currently under construction.
BNEF’s base case forecasts an additional 12.1 GW of installed capacity by 2030, and 17.9 GW by 2035. This results in 17.3 GW of installed capacity by 2030 and 23.1 GW by 2035.
Despite the ongoing expansion of renewables in the energy mix, BNEF said Australia will need to ramp up the pace of its energy transition if it is to achieve the federal government’s renewable energy targets.
“More needs to be done, and faster, for Australia to achieve its target for 82% renewable energy penetration by 2030,” BNEF said.
Wind and solar made up 39% of overall electricity generation in the National Electricity Market in the second half of 2025. Including hydro, renewables’ share of output equalled 44%, up from 40% in the second half of 2024.
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