Clean energy start-ups and entrepreneurs have welcomed the Federal Government's renewed focus on innovation with the sector already primed to scale up its operations. Luke Osborne from Canberra-based start-up Reposit Power says tax breaks for people who invest in new ideas are important.

"We have to reward people who are willing to take risks and push boundaries," Mr Osborne said. "Australians have a real aversion to risk and this will go some way to changing that culture."

Reposit Power was founded two years ago to help solar households reduce their reliance on the grid. In unveiling today's $1 billion innovation package, Prime Minister Malcolm Turnbull said Australia's greatest assets are not in the ground. Solar entrepreneur Danny Kennedy says if the government believes that to be the case, it should stop giving an unfair leg-up to the fossil fuel industry.

"Australians spend $4 billion a year on fossil fuel subsidies - quadruple the amount the government is pouring into innovation over the next four years," Mr Kennedy says. "We have to get real about the scale of enterprise - it's a good start that the government is trying to capture momentum but innovators need to see action, not just words, if they are to invest in Australia."

It was policy stability and a culture of innovation that enticed Mr Kennedy to move from Australia to California in to create his solar start-up Sungevity. The company has brought down the costs of installing solar by using Australian-developed software to sell panels over the internet.

Chris Cooper, who founded community solar project developer Repower Shoalhaven says more could be done to target the clean-tech sector. "If we are to take 'alternative' energy mainstream we need more focus on ramping up deployment via software and business models innovations which lower the soft-costs and overcome the institutional barriers to clean energy adoption," Mr Cooper said.

Mr Cooper has just retruned from a world tour of clean energy start-ups as part of a Winston Churchill Fellowship.

"The Australian Renewable Energy Agency for example, could be harnessed for early stage clean-tech start-ups very much like the US Department of Energy's SunShot program, which has granted hundreds of thousands of dollars to assist more than 400 solar start-ups in the US to commercialise new innovative solar business models."

Tom Nockolds from Community Power Agency says the government should adopt a broader definition of the type of enterprise or business that is eligible for tax breaks.

"We know that innovation thrives on diversity and so it makes logical sense to think of a definition of enterprise that goes beyond just the one-dimensional view of a profit-making company," Mr Nockolds said.

"The tax breaks for start-ups could give many community energy groups a real boost, but for all those groups that are set up as co-operatives or associations it's not clear that they'll be able to benefit from these changes."