Despite possessing a very large potential of renewable energy sources, Australia has lagged behind other developed countries in embracing renewable energy. Various programs and policies have been devised and implemented by Australian governments. Nevertheless, the proportion of renewable energy in electricity generation in Australia has not increased significantly. This paper seeks to explain why Australia has difficulties in adopting renewable energy by using the Political Aspect of Innovation (PAI) framework to examine the causes and barriers that have blocked the taking up of renewable energy. The PAI framework is concerned specifically with public innovation policy in Australia and the way it aims to encourage and support investment in new technology development. The paper finally outlines some future suggestions for charting the progression of the Australian energy system toward a transformative sustainable future. (C) 2011 Elsevier Ltd. All rights reserved.