The Borroloola community's Ngardara Solar Microgrid project in the Northern Territory was on Thursday awarded $8.4 million from the Australian Renewable Energy Agency.
It will be the first utility-scale microgrid project owned and operated by a First Nations co-operative on Aboriginal land, with community members being trained to build and run the solar array.
In Santa Teresa, near Alice Springs, the agency is also supporting early-stage planning for a proposed First Nations-led renewable energy microgrid being developed with Atyenhenge-Atherre Aboriginal Corporation.
At the funding announcement in Darwin on Thursday, Ngardara Company chair Scott McDinny said the project would give control to the community to ensure the fans and air conditioners stayed on in the desert heat.
Temperatures at Borroloola, a community of around 750 people 670km southeast of Katherine, can reach 40C.
The solar array and battery would also remove the reliance on expensive diesel which could run out when bad weather cut road access for trucks to Borroloola, Mr McDinny said.
Federal Energy Minister Chris Bowen said First Nations communities should be at the centre of designing and leading the energy solutions that work for them.
"This is what the energy transformation looks like in practice, communities leading change, cutting diesel use, improving reliability and building a stronger energy future," he said in a statement.
Minister for Indigenous Australians, Malarndirri McCarthy, said reducing reliance on diesel in places like Borroloola and Santa Teresa was critical to improving energy security and affordability in remote communities.
"These projects show what is possible when communities design and lead their own energy solutions."
Special Envoy for Climate Change Adaptation and Resilience Kate Thwaite said the project revolved around First Nations ownership and leadership.
"What we're doing here is supporting that transition to clean energy but also supporting communities to take action for their own future as well.
"Right around the nation people are benefiting from the transformation to clean energy and we want that to happen for our First Nations communities as well."
The grant funding helps unlock access to private and philanthropic investment, placing the Borroloola project on track to be fully funded by mid 2026, with construction targeted to begin in September.
Comprising a 2.1 megawatt solar array and 1.8 megwatt battery the project is designed to cover up to 80 per cent of Borroloola's energy use, with diesel generators providing the rest.
Design and development will be co-led by Indigenous community development group Original Power and the Ngardara Co-operative.
The energy agency's funding program includes $125 million to develop and deploy microgrid projects in regional and remote communities, with $75 million allocated to microgrid projects in First Nations communities.
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