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 has ‘‘not received a cent from state and federal governments’’ — designs, develops and builds ‘‘high-quality’’, ‘‘high-powered’’ 200-watt solar panels.

But it was undercut by imported Chinese panels — which Mr Lal says are lower in quality — that sell for almost 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,’’ Mr Lal said.

‘‘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 them for supplying electricity back into the grid, had brought the Sydney market to a standstill, Mr Lal said.

‘‘The carbon tax is not going to solve these issues,’’ he said.

Last week, 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”.

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

‘‘It’ll depend on how long we can sustain ourselves against the import of items of low-quality components.’’

Mr Lal supported the government taking action on carbon emissions but was uncertain on whether it would decrease emissions. ‘‘To compete overseas, miners and big polluters will have to find ways to compensate for the carbon tax. They may well increase production to pay for the tax, which would increase emissions.’’

He preferred the tax to the opposition’s ‘direct action’ plan which was ‘‘the wrong way around’’ in that it taxed consumers and paid emitters to reduce pollution.