If the government agrees to the compromise deal, first proposed by the Clean Energy Council, it would reduce the target from 41,000 gigawatt hours of annual renewable energy production by 2020 to 33,500.

But the government is still showing no sign of budging from its most recent offer of 32,000 gigawatt hours.

In a statement Mr Shorten said the uncertainty had to end.

"Labor will protect the future of Australia's renewable energy sector by backing the Clean Energy Council's compromise position on the Renewable Energy Target," Mr Shorten said.

"Labor is acting on the advice of the renewable energy industry, the CEC and the experts in reaching this decision.

"Every day this matter drags on, more jobs are lost and every day the uncertainty continues, projects are shelved and future jobs are lost.

"Labor is working with the renewable energy sector to stop any more damage."

Mr Shorten said the government's "dishonesty and incompetence has almost destroyed Australia's renewable energy industry".

"Tony Abbott must end the uncertainly and accept the renewable energy industry's compromise position today," he said.

"Since Tony Abbott was elected, investment in Australia's renewable energy industry has fallen 88 per cent, while around the world investment rose by 16 per cent."

The Business Council of Australia, the Australian Industry Group, Infigen, Pacific Hydro and General Electric are among the business groups urging the government to support the CEC's proposal.

At a media conference for the release of the government's energy white paper on Wednesday, Industry Minister Ian Macfarlane said Labor's offer was "news to him".

"Let's be clear about this, if the report is correct then it is Labor's first offer, it's their starting point," he said.

"Secondly, our current position is our final position. We started at 26,000 gigawatt hours. The renewable energy target is now as high as we can possibly put it without putting in jeopardy the stability of the scheme."

Mr Macfarlane added: "We can get a deal the day they agree to 32,000 gigawatt hours and in the meantime I'm continuing my negotiations with the Senate crossbench, which I'm very confident will conclude in the next two or three weeks."

In a recent interview with Fairfax Media Mr Macfarlane said he was confident he could secure a deal on the target with the crossbench.

The industry has rejected suggestions of a crossbench deal because long-term certainty around investment relies on bipartisan support for the target.

Kane Thornton, chief executive of the Clean Energy Council, said it was time for the government to reassess its position.

"This is a great development to have Labor support our proposal," he said.

"They're now joining quite a number of peak business groups, many of the state governments, and clearly the vast majority of Australians who want this crisis to end to unlock the freeze that's been hanging over the renewable energy sector.

"People within the government itself have supported this proposal to resolve the impasse.

Mr Kane noted earlier statements from the government in which Mr Macfarlane said they hadn't received a proposal from the industry or Labor.

"Two weeks ago, industry put a firm proposal on the table and Labor and business groups have endorsed it. Clearly it's time for the government to reassess its position."

Follow us on Twitter