Australian Prime Minister Anthony Albanese has launched a A$1 billion Solar Sunshot program to boost local solar panel manufacturing.

The initiative aims to reduce Australia's reliance on Chinese imports by supporting domestic production with subsidies and grants.

Currently, only 1% of solar panels are made in Australia, despite it having the world's highest uptake of rooftop solar.

The policy is expected to generate jobs, especially in regions transitioning from coal-powered industries to renewable energy.

Manufacturing is set to take place at the former Liddell Power Station, with AGL Energy and Sun Drive involved in creating a commercial scale facility.

The government's goal is to lower solar panel costs domestically and achieve 82% renewable power by 2030.