The Australian Renewable Energy Agency (ARENA) has been granted a funding lifeline of A$800 million over the next five years, after the federal government and opposition came to an agreement that will save the agency.

ARENA had faced being wound down as a result of the government’s earlier proposal to strip A$1.3 billion from the agency. This was part of a wider package of measures designed to save the federal budget more than A$6 billion.

Renewable energy researchers had reacted with dismay to that proposal. An open letter to the government in defence of the agency attracted 190 signatures.

Below, our experts react to the news.

Nicky Ison, Senior Research Consultant, Institute for Sustainable Futures, University of Technology Sydney

Today the Coalition government and the Labor Party struck a deal to:

slash half-a-billion dollars from the Australian Renewable Energy Agency; and

save the Australian Renewable Energy Agency (ARENA).

These statements seem like a contradiction, but both are true. However, it is also true that the need to save ARENA exists because of the Coalition government’s efforts over the past three years to dismantle Australia’s renewable energy policy.

If the benchmark is that we keep our existing renewable energy institutions, today was a win. However, if the benchmark is that we have institutions and policies that have sufficient funding and scope to tackle the policy challenges of climate change, our changing energy system and driving innovation, then today was a loss.

Andrew Blakers, Professor of Engineering, Australian National University

The Australian research community is pleased that the government’s proposal to debilitate ARENA by removing A$1.3 billion and ending its granting function will not go ahead. At the same time, we are disappointed that yet again ARENA is subject to huge funding cuts.

The fastest and surest way to reduce greenhouse gas emissions is to accelerate the introduction of renewable energy into the electricity system. ARENA has focused heavily in this area (among others), covering the full gamut from support for early-stage research, through grants to young renewable energy companies, to acceleration of deployment of large-scale solar photovoltaic systems.

ARENA will need to heavily prune its activities to cope with a A$500 million budget cut. We look forward to restoration of ARENA funding, and to a concerted effort at the national level to move rapidly to 50-100% renewable electricity.

Tony Wood, Energy Program Director, Grattan Institute

The silver lining amid the cloud of the political compromise on ARENA funding represents a welcome return to the art of the possible. Of course it is a pity that ARENA has been cut again, given that among Kevin Rudd’s climate change children this one had bipartisan support, at least until the 2014 budget.

Grant funding to drive down the costs of renewable technologies with real potential has been ARENA’s model and the funds now secured will allow this to continue. The next challenge is to create an integrated model that connects grant funding with the recently announced Clean Energy Innovation Fund, which will provide debt and equity funding to emerging renewable technologies, and the Clean Energy Finance Corporation’s role of developing innovative financial models to commercialise clean energy.

Living for another day is never a bad outcome.