The eye-watering figure Australia needs to spend to reach net zero

Highlighting the massive scale of investment needed to reach net zero emissions by 2050, the bank reckons governments, businesses and consumers will collectively have to expend about $3 trillion to meet the target, averaging out at around $104 billion each year.

Report author and CBA senior economist Kristina Clifton said it was "a big number" that would add to already strong domestic and international demand for capital, materials and labour and potentially inflame inflation.

"Many other countries are also transitioning to sustainable energy. So there will be competition for resources in terms of the physical things that you need for this transition and the labour to install things and the financing to be able to put these things in place," Ms Clifton said.

The CBA economist said strong international demand, particularly from countries like the United States (which is spending $AU1.2 trillion on clean energy in direct funding and tax credits over the next decade), could push up the cost of imports like solar photovoltaic systems and wind turbines, though advances in production and technology may help hold prices down.

In a recent statement to parliament, Climate Change Minister Chris Bowen admitted there was an international race for capital and resources.

"There is a global race for capital [along with] a global fight for supply chains," Mr Bowen said.

"We are competing for finite resources, whether it's wind turbine components or electrolysers."

The minister said while the nation had "world-leading" solar, wind and critical mineral resources, as well as a skilled workforce and established manufacturing capacity, a clear plan for the energy transition was "no longer optional, but a baseline expectation of capital markets".

Mr Bowen said policies including Rewiring the Nation and the Capacity Investment Scheme, along with sectoral plans, were important in helping attracting capital and driving investment.

The installation of renewables technology and associated works like extra storage and transmission systems also comes at a time when there is already a hefty pipeline of government investment in transport, housing and engineering works.

There is almost $120 billion worth of public sector projects on the books this financial year and Ms Clifton said the federal government's target for an additional 1.2 million homes over the next five years would "greatly add to demand for labour and materials in the construction industry.

Anticipating cost blowouts and delays, the government recently shelved 50 projects worth about $7 billion.

Commonwealth Bank estimates almost half the annual spend - $49 billion - will go on renewable energy like wind and solar, expanding the transmission grid, installing heat pumps and for research and development into green hydrogen and carbon capture and storage technologies.

The remaining share, around $55 billion per year, will be spent by households replacing their traditionally powered car with an electric vehicle.

Ms Clifton said most of this spending would not be new demand, because people would be upgrading their old car either way.

While the government has spruiked a jump in renewables investment since it came to office, the CBA economist said recent evidence was mixed.

While spending on new solar and wind capacity reached a record $9.5 billion last year, in the nine months to September this year just $2.1 billion has been invested - an outcome Ms Clifton attributed to inflation and interest rates pushing up materials and borrowing costs for investors.

She said governments could ameliorate the impact of the energy transition on inflation and interest rates by providing more energy rebates and solar panel incentives for households and businesses, though this would come at the expense of smaller budget surpluses or larger deficits.