The northern New South Wales town of Tyalgum is powering toward being Australia's first town to completely drop out of the national electricity grid.

The small town of about 300 people in the region renowned as the nation's alternative lifestyle mecca has been working towards using power solely from renewable resources.

Three years ago, businessman Andrew Price launched the Tyalgum Energy Project with a government grant that funded feasibility studies.

He believes the time has come to put his plan into action.

"We are going out and putting as much solar behind the meter as we can to just show the community that this is real and that it is something we can achieve and that is where we hopefully will create our zero net emissions," he said.

"Some people are motivated by doing the right thing by the environment, but a lot of people are motivated by cost and saving money.

"If you can bring those two together, it is a huge benefit to the project."

Mr Price's vision is for the bulk of the community's energy to be generated by rooftop solar panels, with the remainder coming from a public solar-panel array.

Smart meters 'a turning point'

Communal solar-powered electric bikes have been stationed in the main street to help win over sceptics, while residents and business owners have access to smart electricity meters that show real-time energy usage.

Cafe manager Mobius Barnaby said he believed the measures had taken the project from concept to reality.

"We could see that at 5:30 to 6:00 in the morning our bakers had come in and turned on the big ovens — and of course the power spiked, and that was a big turning point for us," he said.

Mobius Barnaby with the smart meter that gives real-time feedback on energy use at his Tyalgum cafe. ( ABC News: Jennifer Huxley )

"It showed it wasn't just a case of whacking solar panels on the roof and hoping for the best, but that we could know when we are drawing power and what kind of storage we are going to need.

"There are some people who have been sceptical, but in the cafe we are also seeing a lot of people who are either wanting to know where there is real estate, or who have just bought in the area because of what is going on."

Funding remains a stumbling block for the Tyalgum Energy Project, with property owners footing the bill for solar panels and installation.

Project leaders are exploring economic models that could be used to expedite the town's shift to renewables, including a system that would allow surplus solar power generated from rooftop panels to be made available to the community rather than being fed back into the main grid.

Projected costs and deadlines will remain fluid until a financial solution is found.

"Building a public array for the community would enable us to trade energy or just be completely self-contained," Mr Price said.

"Out of that there are things other than power — we are looking at a sustainable community where garbage and water could come into it.

"So we are looking at a completely self-contained community."