Jain Lal, director of Hallam-based Australian Solar Manufacturing, did not expect any of the windfall to flow through to his business.

The government's proposed Australian Renewable Energy Agency, which is distributing the funds, will focus on research and development of new technologies.

Mr Lal said that was of little help to his business.

"There is no funding for a proven technology like ours that is already up and running. No funding for us to bring down the cost through innovation."

The firm - which he says has "not received a cent from state and federal governments" - designs, develops and builds "high-quality" 200-watt solar panels.

But it was undercut by imported Chinese panels that Mr Lal said were lower in quality and sold for nearly half the price.

"Six months ago, we were about 30 per cent more expensive. They've since cut their prices and we're 80 per cent more expensive than the Chinese ones.

"Things were looking good last year but we've seen a big slowdown this month."

He said a major factor was the NSW government closing its gross feed-in tariff for new solar energy users.

The end of the tariff, which paid householders for supplying electricity back into the grid, had brought the Sydney market to a standstill.

"The carbon tax is not going to solve these issues."

Australian Solar Manufacturing is the only solar module manufacturer in Victoria. Mr Lal said he would try not to follow the lead of other companies who had moved plants offshore.

"It'll depend on how long we can sustain ourselves against the import of items [with] low-quality components."

Last week, Clean Energy Council policy director Russell Marsh said there had been significant government support for the solar industry.

"It's not losing out. The aim [of the AREA] is getting other emerging technologies up to the same stage as solar PV. Also a carbon price increases the electricity price, which will make [solar] a more attractive option."

Climate Change and Energy Efficiency Minister Greg Combet said the government's solar credits scheme was providing "significant help to the local solar industry by increasing demand for its products and services".