​Marginal returns have challenged the NEM’s renewables financing landscape over the last 2 years. Yet capacity still grows 5 times by 2050 in Modo Energy's central forecast. This article covers the wind, solar, and hybrid investment cases underpinning that buildout.

​New wind is financeable without storage. However, returns vary by location, with IRRs ranging from 3% to 13% across renewable energy zones (REZs).

Conversely, solar requires a co-located BESS to be financially viable. A new solar farm with an eight-hour battery earns around 9%, similar to wind with its own battery. Retrofitting a battery onto an existing solar site offers higher returns than this new build case.

Executive summary

• Wind returns are highly location-dependent, varying by up to 9.5 percentage points across 36 REZs. Four of the top seven are in Queensland.
• Solar projects prefer longer duration storage: an eight-hour battery lifts returns well above a four-hour one.
• Retrofitting a battery onto an existing solar site gives the highest returns of the configurations tested.
• A fair-value eight-year PPA already covers the cost of new wind in five REZs, while standalone solar still needs storage, a premium buyer or government support.

Standalone wind remains financeable, whereas solar needs support from a battery

The comparison covers eight REZ sites, two per mainland state, with 4h and 8h batteries. ​Adding a 50 MW eight-hour battery to a 100 MW wind farm raises returns by 0.7–2.9 percentage points across all sites tested.