It remains uncertain how much of the auctioned capacity will be reserved for solar developers. The state government will start accepting expressions of interest from prospective developers in October.

The projects that will be built will produce enough electricity to cater to the annual needs of about 389,000 homes, according to an online statement. The tender is expected to generate up to A$1.3 billion ($1.03 billion) of investment and create 1,250 construction jobs.

The auction will support legislation that is being introduced to the state parliament this week to set the Victorian Renewable Energy Targets (VRETs). The state wants renewables to account for 25% of its energy mix by 2020 and 40% by 2025, according to an online statement. In line with those goals, The ruling Labor government claims the VRETs will reduce the average cost of electricity for homeowners by roughly A$30 per year. Costs savings could reach A$2,500 per year for medium-size businesses and A$140,000 per year for bigger companies. The government also expects the VRETs to contribute to a 16% reduction in greenhouse gas emissions from Victoria’s electricity sector by 2034-35.

In addition, the state authorities revealed this week that they have awarded contracts to build 138 MW of utility-scale PV projects that will provide electricity for the tram system in Melbourne. A 100 MW solar array will be built near Robinvale in northwestern Victoria, while France’s Neoen is developing another 38 MW project near the northern city of Shepparton. Total investment in the two installations will likely reach A$198 million.