2025: A record-breaking year for Australian clean energy but investment in new wind and solar remains challenging – new report

Australia’s clean energy transition broke multiple records in 2025, with renewables generating almost half of the nation’s electricity and battery storage capacity tripling, but a new report released today by the Clean Energy Council reveals a critical fault line: investment in new large-scale wind and solar has fallen to one of its lowest levels in a decade, threatening to stall momentum, as energy demand continues to rise and coal-fired power increasingly fails.

The Clean Energy Australia 2026 Report – the peak body’s annual snapshot of the transition - presents a picture of achievement and urgency in equal measure. It found renewable energy generated 42.7 per cent of Australia’s electricity in the full year to December 2025, up from 39 per cent the year prior. For the first time in Australia’s history and in the final quarter of 2025, clean energy generate more electricity than fossil fuels,  easing wholesale electricity prices.

But while capital is ready to invest and developers are ready to build, the report found just 2.3 GW of new renewable energy generation reached financial close in 2025, down 46 per cent compared to the previous year. Onshore wind fell 59 per cent, while utility-scale solar commitments fell 29 per cent.

Batteries were the standout story of 2025

Home battery installations surged 260 per cent year-on-year, with more than 268,000 units installed by the end of December. Committed large-scale battery capacity grew 233 per cent, with a record 4.3 GW worth $4.8 billion reaching financial commitment – up 10 per cent on 2024 – and 2 GW of capacity was commissioned, more than triple the volume added the year prior.

Battery costs fell 20 per cent through the year. Australia now ranks third in the world for utility-scale batteries, behind only China and the United States – a position that would have seemed unlikely just five years ago.

More than 4.3 million Australian households now have rooftop solar, with 2.6 GW of new rooftop capacity installed in 2025. A further 5.9 GW of large-scale wind and solar was commissioned in 2025, adding significant new supply to the national grid, with a 28.5 per cent increase on 2024.

Jackie Trad, CEO of the Clean Energy Council, said the energy transition was met with  encouraging progress in 2025, but several investment barriers remain and are holding back billions of dollars in private capital waiting to invest in new solar and wind farms required to build a resilient and diversified energy system.

“2025 was a year of new records. More renewable energy, more batteries, more households generating their own power,” Ms Trad said.

“Australia’s clean energy transition is at a critical juncture. Renewables are supplying nearly half our electricity; we are now a top-three global player in big battery storage; and households are taking control of their own power bills in record numbers.

“But we need to be honest about where we are, and where we need to be. The number that demands attention is going in the wrong direction: financial commitments for large-scale wind and solar is at a decade low. That is a gap we must close.

“The next five years matter most. Our sector’s highest priority in 2026 must be to remove the barriers slowing investment in new large-scale wind and solar projects that will ultimately replace unreliable coal generators that threaten the security of our energy system.

“These barriers are not unsolvable, and need to be tackled simultaneously, and at speed. We cannot afford to let planning bottlenecks, connection queues and contract economics stall the good progress already made,” she said.

During the the 2025/26 summer coal power recorded 90 unscheduled outages, with an average of 25 per cent of coal capacity offline at any given time. While new demand from data centres and emerging industries is growing rapidly, compounding the pressure on supply.

“The clean energy transition is not a future ambition. Failure to deliver new electricity supply now will make our energy security more vulnerable over time,” Ms Trad said.

“Critical government programs are in place and private capital is ready to deploy. But billions of dollars in projects are being held back by structural barriers, such as: connection delays and capacity, planning bottlenecks, curtailment, and gaps between policy signals and project economics. All are within the power of state governments and regulators to fix,” she said.

The Clean Energy Council is calling for bi-partisanship working with governments, regulators, and industry to drive four priority reforms:

• Strengthen economic signals - Improve Capacity Investment Scheme tenders, delivering effective and investible markets, with fixed commitments to transmission connection timelines. This work gives investors the certainty they need to commit capital at scale.
• Cut excess red tape - Resolve approval requirements and duplication across jurisdictions, and reduce project approval times and costs, including through reforms to the EPBC Act.
• Build community trust - Raise social performance standards across the industry and demonstrate the economic contributions of the sector to regional economies, while elevating the industry’s narrative to counter the misinformation that is delaying projects;
• Better integrate consumer energy resources - Strengthen network integration of rooftop solar and batteries, delivering greater value for household energy asset owners, and reducing regulatory complexity for industry.

“Australia is at a pivotal moment. New markets, from data centres to green iron ore, are emerging rapidly, with the potential to drive productivity and regional growth. The 2026/27 Federal Budget allocatedsignificant funding toward these reforms, but funding alone is not enough. Investment will not wait for barriers to disappear on their own. Concerted action from all stakeholders is required, and it is required now,” Ms Trad said.

Key findings – Clean Energy Australia 2026 Report:

• Renewable energy is now powering nearly half of Australia’s electricity - 42.7% of Australia’s electricity supply is now powered by clean energy (solar, wind, hydro, battery storage) as at the end of 2025.
• An impressive 5.9 GW of new renewable generation capacity was added to Australia’s energy system in 2025, up nearly 30 per cent (28.5%) year-on-year, from onshore wind (1.4 GW), utility-scale solar (2 GW) and rooftop solar (2.6 GW).
• Only 2.3 GW of new utility-scale solar (1.4 GW) and onshore wind (0.9 GW) reached financial commitment in 2025, down 46% year-on-year.
• 2025 was a breakthrough year for batteries. Australia claims third place globally in utility-scale battery storage by total capacity, and now sits behind only China and the United States as the world's largest big battery market.
• A record 4.3 GW of new large-scale battery capacity worth $4.8 billion reached financial commitment, up 10 per cent on the year prior, and 2 GW was commissioned, more than triple the volume added in 2024.
• Utility-scale battery costs fell 20 per cent through 2025.
• Australian households are leading the charge. More than 268,000 home batteries were installed in 2025, a 260 per cent jump on the previous year.