A coalition of 18 urban New South Wales councils has signed off on a renewable energy agreement to buy electricity from a solar farm around 600 kilometres away.

The plan, in which energy from the Moree Solar Farm will power council buildings in Sydney, has been touted as the first of its kind in the state.

The deal was coordinated by the Southern Sydney Regional Organisation of Councils, which estimated the councils would have up to 35 per cent of their retail power supplied by the solar farm by July 2019.

"This is a real game-changer," said Darcy Byrne, Mayor of Inner West Council.

"The great thing about investment in solar energy in 2018 is that it's good for the environment by reducing emissions, but it's also good for ratepayers by reducing our electricity costs."

While Cr Byrne said the exact saving was difficult to pin down, he was adamant it would benefit everyone living in the 18 councils.

"Because there's so much volatility in the energy market, it's difficult to make bold statements about how much electricity costs will be reduced by this investment," he said.

"But we do know by having a fixed price and investing in solar now, in the medium to long term we will reduce electricity costs."

The 18 councils will buy 25 per cent of the farm's output (file photo). ( Supplied: Desert Knowledge Australia )

Need for funding

In late 2017, the City of Melbourne announced a similar plan, when a coalition of universities, cultural institutions, corporations and councils joined to support the development of a wind farm in Ararat in regional Victoria.

Moree Plains Shire Mayor Katrina Humphries said moving to a model in which the bush powered the city was a smart decision for regional towns.

"I think there's a need for energy, there's a want for renewable energy, and out here in the bush we're perfect for it," she said.

But Cr Humphries said a lack of money was holding the idea back.

"The cost of setting up a solar farm is beyond your average council.

"There's no reason why that funding couldn't come to a council for a council to actually own and manage a solar farm; it would be a wonderful way of councils getting extra resources, extra money for their communities.

"We could actually get our roads sealed if we own a solar farm."

Dr Scott Kelly, a research director at the Institute of Sustainable Futures, said the idea had merit.

"I think it's the trend, particularly for councils in urban areas where they have space constraints, and they want to benefit from renewable energy," he said.

"It doesn't matter where renewable energy comes from — we have a grid in place, [so] it can travel across significant distances.

"Obviously the longer it must travel, the more losses you get, but there are technologies in place for that to happen."

And Dr Kelly said while solar farms were still expensive ventures, their costs were falling much faster than predicted.

"The cost of solar is decreasing substantially, much faster than even the most optimistic scenarios have been," he said.

"And with the introduction of batteries as well, this is going to have significant impacts on traditional generators on the system, so large fossil fuel plants are increasingly going to be a thing of the past and we're going to shift to this decentralised community model of renewable energy."

Should regional Australia see the Sun as a commodity? ( User submitted: Ching-Ling Lim )

Sun is a commodity

But like Cr Humphries, Dr Kelly said the ability for councils or even regional landholders to access funding for solar farms was a challenge.

"I think a lot can be done, particularly at the federal and state policy level for electricity rules and governance. It's not particularly well set up and a lot can be done to ease that process.

"There's a lot of regulation in that space about who can generate and who can feed into the network."

And he said for that to change, landholders and governments must move to see the Sun as a commodity.

"I think it hasn't really taken hold in Australia yet, but certainly in other countries internationally we're seeing different technologies — not just solar photovoltaic, which is the traditional technology you put on the roof of your house — but other concentrated solar thermal technologies," Dr Kelly said.

"There have been great successes in northern Africa and the Middle East in using these technologies, and I think Australia should be well placed to adopt that and I think rural Australia is particularly well placed given the amount of sunshine that's out there."

The agreement with the Moree Solar Farm will deliver around 440,000 MWh of energy to the councils over the lifetime of the agreement to 2030.