On Monday morning deputy prime minister Michael McCormack visited Lockhart to announce funding of $1 million from the Community Development Grants Project.

The funding is set to help secure what will ultimately be a $30 million venture for Lockhart.

Lockhart Shire Council mayor Rodger Schirmer said he had been in talks with Better Energy Technology's principal, Gordon Hines since 2017. 

And council has also discussed the prospect of cheaper power options with new businesses which are looking at the region as a potential base. 

"This is a game-changing grant," Cr Schirmer said. He said the expected cost savings on power bills was 20 per cent and fees would be capped for 10 years. Council will also be given the "first right of refusal" in terms of buying the plant once it is completed. 

Mr McCormack said Lockhart was a town with a great past and a great future. 

He said the prospect of having the town "off grid" offered economic savings and pushed the planning process into the future. 

"The $1 million provide the impetus to get this project off the ground," he said. 

Under the proposal, electricity would be generated locally from renewable energy sources which, combined with battery storage technology, would not only be sufficient to power the town 24 hours a day, seven-days a week, but would also generate surplus power which could be sold back into the grid.

"This proposed microgrid demonstration project shows that big things in the area of renewable energy can come from small but innovative places, such as Lockhart," Mr McCormack said.

"The government is supporting communities and businesses at all levels to lower energy cost whether it be through backing microgrids, building Snowy Hydro 2.0 or providing grants to local organisations to install rooftop solar panels."

Lockhart was chosen as the site for the demonstration project because it has a mix of residential, commercial and industrial electricity consumers, as well as public institutions, such as schools and a hospital.

The town is also established in a grid pattern and is NBN connected. The vision is for Lockhart to remain connected to the main grid - enhancing energy security - while reducing power prices and providing environmental benefits.

"The community, including Lockhart Shire Council, is fully supportive of the project and that is one of the reasons I am right behind it," Mr McCormack said.