This year will be the "tipping point, the beginning of the clean energy era", Climate Commission, Chief Commissioner, Professor Tim Flannery, told a CEDA audience in Melbourne.

"This is the critical decade. It is clear that energy systems and the world's climate are changing more rapidly than we thought. The case is stronger than ever for strong action in Australia," Professor Flannery said.

He said his optimism about the coming decade came from four factors:

• Advances in clean energy technologies;
• Public support for clean energy;
• Increasing investment in renewable energy; and
• A drop in the price of wind, in particular solar energy.

"Global investment in renewable power and fuels has increased sixfold since 2004 to $257 billion last year, while costs of renewable energy were dropping faster than expected," he said.

"The cost of producing solar photovoltaic cells has fallen 75 per cent in the past four years and 45 per cent in the past year."

Professor Flannery emphasised Australia has great capacity for renewable energy but is not using the most abundant natural resources.

"The world is changing quickly and Australia needs to be prepared if we are to prosper in the future. We need national leadership to prepare us for a clean energy future," Professor Flannery said.

With our sun, wind, wave and geothermal resources, Australia has some of the best renewable resources in the world, he said.

"We are taking the early steps on a multi-decade pathway to transform our economy and society," he said.

Australia has had clean energy legislation introduced, a price on greenhouse gas pollution, and a new industry coalition - with 330 companies interested in shifting to clean energy, he said.

"Australians are using energy smarter in their businesses and homes," he said.

"We've (Climate Commission) been impressed with the capacity of Australians to come together…to find solutions that are good for the environment and reduce costs."

He said Germany was leading the way in renewable energy.

Its new energy plan will provide invaluable experience about how industrialised countries transform from the traditional fossil-fuel fed power grid, to a clean-energy based distributed, intelligent power grid, he said.