Renewable energy could provide Victoria with eight times more electricity than it needs, a report has found, as the government offers new incentives to expand solar power production.
Even with Victoria's booming population expected to drain a further 15 to 20 per cent off the electricity grid by 2030, the report says solar energy alone could easily cover double the future demand.
"However, these findings are far from providing a complete story," says the report, commissioned by the state government and written by engineering consultants Sinclair Knight Merz.
For instance, using wind energy to power the entire state would require 100,000 turbines, while relying only on solar would cost at least $500 billion.
The findings do not consider these financial constraints or the public's level of interest in seeing such massive wind and solar farms spread across available land.
Premier John Brumby hopes Victoria will still become Australia's "solar state", pledging on Wednesday to increase the state's total electricity supply from solar power to five per cent by 2020.
Unveiling the government's renewable energy incentive plan at a solar test site in Bridgewater, Mr Brumby said the scheme is expected to lead to the construction of five to 10 solar power plants in regional areas within 10 years.
"To show we're serious about the 2020 goal, we have set an interim target of generating 500 gigawatt hours (500 billion watt hours) of solar power by 2014," he said in a statement.
The result will mean at least 25 per cent of Victoria's entire power supply will come from all renewable energy sources by 2020.
But the ambitious goal will come at a cost: each Victorian will pay between an estimated $4 to $5 a year more for power by 2014 just to cover the premium being offered for solar power companies to invest.
Large-scale plants will be given a new tariff to feed power into the grid above and beyond what it would normally get on theenergy market.
The tariff rate will be determined following consultation with industry during the next six to 12 months.
Environmental groups praised the decision and said the feed-in tariff would encourage large-scale investment.
Mark Wakeham of Environment Victoria said he believed the government's timeline of building up to 10 solar plants in 10 years is also feasible.
"I think it's realistic," he told AAP. "The thing that's been preventing them from being built before is the financial incentive."
State Opposition Leader Ted Baillieu said he supported investment in solar power but wondered why past projects have stopped after failing to secure government investment.
Melbourne company Solar Systems had hoped to build a 150MW plant in Mildura but funds dried up and the project stalled.
"It's now incumbent on John Brumby to make it clear what the future of that project is and what the future of Solar Systems is as a headliner for the government's approach to solar energy," he told reporters.
The government's plan also calls for medium-sized projects like solar panels on shopping centre roofs to be supported.
A task force has been launched to study how to drive investment into medium-sized solar power.