Scientists from Canberra's Australian National University (ANU) and Tianjin University in China have teamed up to develop new cheaper solar technology.

The two year project will pioneer the use of solar cells immersed in cooling fluid to make them more efficient and less expensive than current solar panels.

ANU Professor Andrew Blakers says the new solar systems will be able to simultaneously heat households, water and generate electricity.

"This combines the two functions into a single lightweight, low profile concentrator system," he said.

"And because you're utilising the same infrastructure for both electricity and heat collection you can aim to have a substantially reduced cost."

Mr Blakers says it has the potential to make buildings carbon neutral.

"Inside that receiver immersed in mineral oil is a solar cell that absorbs about 20 per cent of the reflected sunlight to make electricity," he said.

"The other 80 per cent becomes heat and can be used to make solar hot water and to heat houses in winter and to drive solar cooling in the summer."