Confirmation that the largest solar energy project in the Southern Hemisphere is now underway is great news for the future of renewable energy in Australia, the Clean Energy Council said.

Clean Energy Council Policy Director Russell Marsh said the AGL announcement of financial close on a $450 million, 155-megawatt large-scale solar PV project is also good news for NSW.

"This project will be the largest Australia has seen to date, and is set to generate enough clean energy to power 50,000 homes and create 450 jobs during construction in the Broken Hill and Nyngan areas," he said.

"It's great to see that government is playing its role in supporting the deployment of large-scale solar power, with $166.7 million in funding committed to the project by the Australian Renewable Energy Agency (ARENA) and $64.9 million from the NSW Government.

"Combined with the 20 per cent by 2020 Renewable Energy Target, state and federal governments are driving Australia's clean energy future forward, to help ensure we have a broad range of energy technologies in the market to protect Australian consumers from the rising cost of gas.

"As more and more large-scale renewable projects are built, the costs will come down and consumers will see the full benefits. New solar PV and wind energy projects are already predicted to be cost-competitive with coal and gas by 2020, and landmark projects like this one by AGL and First Energy will help accelerate that process," he said.