Dairy farmers will be able to receive grants of up to $20,000 to upgrade their equipment to reduce energy consumption, the federal government says.
The grants will be available from Monday under the government's energy efficient communities program.
The grants will also allow farmers to invest in monitoring systems to better manage energy use and conduct energy audits to investigate other opportunities for energy efficient activities.
"These grants will provide financial support at a time when so many in the dairy industry are struggling," Agriculture Minister David Littleproud said in a statement on Monday.
"Supporting the long-term sustainability of our dairy farmers is critical to the sustainability of regional Australia and our food security."
Energy use in milk cooling, milk harvesting and hot water production is one of the highest overheads in the dairy industry, costing dairy farmers as high as $12,800 per 100 cows each year.
Energy Minister Angus Taylor said the program is focused on helping dairy farming businesses to lower their power bills by becoming more energy efficient.
"Farmers have long been at the forefront of innovation to reduce their cost of doing business and their emissions output," Mr Taylor said in the statement.
"But energy costs remain high for many in our dairy sector, especially where farmers are doing it tough on the back of bushfires and COVID19."
Australian Associated Press