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£2.2m from dwindling cash reserves

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The government has allocated £2.2m of funding to solar energy projects, Energy Minister Stephen Timms announced today, but the solar power industry has called for more clarity about what will happen once the funding runs out.

The grants are the latest to be made from the government's major photovoltaics (PV) demonstration programme, a £25m fund established in 2002 to support use of solar power through to 2005. The fund is intended to support deployment both on a small scale in domestic use, and on a larger scale such as in housing development projects.

In total, 24 medium to large-scale projects will benefit, and the amount of solar power being funded is equivalent to the annual consumption of 160 households. Projects given grants include a Children's Hospice in Guildford, a large housing development in Huddersfield, a cemetery in Nottingham and a school on the Isle of Wight.

Although this sounds like quite a high spend for relatively few projects, solarcentury, one of the nine installers behind the chosen projects, explains that this is partly down to the nature of the projects the grant is intended to support.

"The point of the scheme is to encourage innovation," says Joy Green, a spokeswoman for solarcentury. "It is not just about spreading solar power. So projects will involve cutting edge materials, such as solar glazing, which are naturally more expensive that a simple system of solar roof tiles."

The current government grant backing for solar power runs out in 2005, Green says, and it is not altogether clear what will replace it. After this allocation, there are just two more rounds of funding left for larger projects, and the support for home installations will run out in the middle of 2005.

"The development programme has got some really positive results: more people are setting up businesses in solar power, and we are starting to see interest from major building developers. However, a lot of it is grant dependent, and if the government doesn't continue to support the industry, it will effectively be strangled at birth," she said.

She warns that although companies like solarcentury are likely to be able to ride out a cut in government funds, smaller players may not, which would hurt innovation.

"The government has to follow through on its promise," she says. "They have to decide whether they are serious about investing in renewables, or not."

The government has set a target of generating 10 per cent of the UK's energy demand from renewable sources by 2010. At the time of writing, the DTI was not available for comment. ®

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