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Manufacturers' time to shine as nation reindustrialises

Australia has taken its first steps towards reindustrialisation as it transitions to a net-zero economy.

Though Australia is one of the highest per capita users of solar energy in the world, it produces just one per cent of the world's solar panels while 90 per cent is made and exported by China.

But on Thursday, Prime Minister Anthony Albanese announced a $1 billion to support the manufacture of solar panels in Australia.

PM Anthony Albanese (L), Climate Change Minister Chris Bowen
Anthony Albanese has announced a $1 billion to encourage the manufacturing of solar panels at home. (Dean Lewins/AAP PHOTOS)

The commitment has been applauded by environment groups and industry organisations.

And Smart Energy Council CEO John Grimes says it could pave the way for further reindustrialisation in other sectors necessary for a clean energy transition, like battery manufacturing.

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"Let's stop digging and shipping iron ore to the world, let's process it using zero-carbon renewable energy, produce iron steel and send that to the world," he said.

"That is about the reindustrialisation of the Australian economy.

"I think with this vision and leadership, we're very enthusiastic and hopeful."

Critics of the government's solar announcement say Australia cannot compete with the pace and low costs of China's solar panel manufacturing.

But Mr Grimes and other proponents say that's not what the investment is about.

"We will compete with that IP and innovation - the Australian know how - which gives us a competitive edge," he said.

"This is about starting the manufacturing ecosystem."

Manufacturing solar panels at home will also help secure Australia's supply chains and drive further rooftop solar uptake while bolstering quality and consumer confidence, according to advocacy group Solar Citizens.

It is also expected to help workers in coal heartlands transition to renewable energy careers, which Climate Council head of policy Jennifer Rayner welcomes.

"This is what seizing the decade and securing a safer, more prosperous future for our kids looks like," Dr Rayner said.

To reach its climate goals the government must reduce greenhouse gas emissions to 43 per cent below 2005 levels by the end of the decade, before completely negating its emissions - known as reaching net-zero - by 2050.

The government introduced legislation on Wednesday to set up a Net Zero Authority, which will provide architecture for a renewable transition programs roll-out.