Prime Minister Anthony Albanese and Climate Change and Energy Minister Chris Bowen joined SunDrive founder Vince Allen at Liddell on Thursday to announce the company had signed a memorandum of understanding to explore manufacturing opportunities at the site.

The announcement coincided with the government's commitment to invest $1billion into the government's Solar Sunshot program to promote domestic solar panel manufacturing.

"I know Vince has got (manufacturing) plans for 2026," Mr Bowen said.

"We want to see solar Sunshot up and running well and truly this calendar year and we intend to do that.

"Now, of course, it takes a bit of time to build the factory and get the workers in and get all the infrastructure going, but we are going at lightning speed."

Mr Allen said his company's aim was to build the world's best solar panels in the Hunter.

"This is obviously quite an historic day, not just for the Hunter, but also the country," he said.

"Our plan is to produce in our first phase, hundreds of thousands of panels on this site, with the eventual goal of scaling that to millions of panels per year.

In addition to manufacturing, SunDrive is also in negotiations with AGL, one of the country's largest solar retailers, to enter into an offtake agreement.

"For us at SunDrive, we see that the Hunter has the talent and the skills needed to drive the energy transition and obviously solar is going to be a very core component of that," Mr Allen said.

One in three Australian households presently have solar panels - the highest uptake in the world - but only 1 per cent are made in Australia.

Mr Albanese said the government was determined not miss emerging domestic manufacturing opportunities for solar panels.

"Today we have about 90 per cent of the world's solar panels produced in just one country (China) and then exported to around the world," he said.

"We missed the (previous) opportunities, we are not going to miss the opportunities of this generation. And that is what our support is about."

Mr Albanese said the Liddell site had the potential to provide even more jobs than were supported by the former power station.

"More jobs, more security, better pay, stronger local economies, stronger regional economic development. This announcement today is, I think, one of the most significant that will be made during our term. And I'm very proud to be a part of it today," he said.

AGL Managing Director and chief, Damien Nicks, said the MOU with SunDrive had the potential to help create a new solar manufacturing industry in Australia.

"Our vision for the Hunter Energy Hub is to create a low carbon integrated energy hub - designed with circular economy principles - that brings together industries that can make a positive contribution to the energy transition, including renewable energy generation, grid-scale batteries, green advanced manufacturing, and associated industries." he said.

"Our partnership with SunDrive has the potential to deliver significant benefits for Australia's energy transition. If successful we will create new jobs and careers in the renewables industry as together, we build a new solar manufacturing industry and hub right here in the NSW Upper Hunter region.

Business Hunter chief executive Bob Hawes said the announcement was tangible recognition of the Hunter's credentials for attracting new industry and investment.

"This project leverages access to the grid for a new industry to be able to link into a future supply of green energy fed locally and from respective renewable energy zones in the Central West and New England regions," he said.

We're also delighted with the alignment of federal and state government objectives to support onshore, local manufacturing which will be a cornerstone for new investment as a consequence of the certainty the program will bring. A solar panel manufacturing facility will sit comfortably alongside existing industry in the region and I have no doubt there will be considerable enthusiasm for other businesses to get involved."