CSIRO will lead an Australian solar thermal research initiative, aiming to lower the cost of solar thermal power from 25 to 10 cents per kilowatt hour.

The Gillard government will step up its investment in joint solar energy research with the US, using additional funds from its new $2.2 billion renewable energy agency.

Martin Ferguson, Minister for Resources and Energy, will today announce more than $83 million for research as part of the United States-Australia Solar Energy Collaboration (USASEC) launched in 2010.

The funding taps into money not yet spent from the $50 million Australian contribution to USASEC, managed by Newcastle-based Australian Solar Institute (ASI).

In addition, the new Australian Renewable Energy Agency will contribute about $38 million in funds to the research. The agency will absorb the ASI at the start of 2013.

“These projects will leverage an investment of $140 million from industry, resulting in more than $220 million for solar research and involving over 40 organisations across Australia and the US,” Mr Ferguson said in a statement.

Most of the combined funding will be spent on two research endeavours.

About $33 million will go to the US-Australia Institute for Advanced Photovoltaics to develop the next generation of PV technologies and spur increases in performance and lower costs. The University of New South Wales will lead the research, supported by other universities in Australia and the US, and commercial partners including BlueScope Steel and Suntech R&D Australia.

The other major research focus, the Australian Solar Thermal Research Initiative (ASTRI), will receive $35 million aimed at making Australia a global leader in so-called Concentrating Solar Power technologies. The effort will be led by the CSIRO and mostly involve Australian and US universities, and Sandia Corp.

An additional $15.5 million will be allocated to collaborative research projects under the Open Funding Round of the USASEC, the statement said.

Projects range from developing an Australian Solar Energy Forecasting System – a venture the CSIRO had sought funding for – that will improve the integration of solar energy generation, to a solar device that simplifies incorporation of solar energy into hybrid fossil fuel applications.