Portland-based Keppel Prince Engineering, which makes about 40% of Australia's wind turbine towers, has indicated it may need to lay off 150 staff because of lack of work.
Keppel Prince's chief executive, Steve Garner, told Green Left Weekly a big problem is that the companies it has contracts with can't access Renewable Energy Certificates (RECs) to support their projects.
The government-issued RECs are supposed to give an incentive to the renewable energy industry. But under federal government legislation, RECs are also given to solar hot water and heat pump installations in households.
Rooftop solar panels are given five RECs for each actual unit of output as an incentive to householders, replacing the previous solar rebate scheme. Climate campaigners have dubbed the extra certificates "phantom RECs".
Garner told GLW that "solar hot water is not adding any renewable energy" into the grid. He said climate change minister Penny Wong "stated that rooftop solar would use 5% of the RECs, [but] it actually looks like being 50% due to the phantom RECs".
He said the government ought to "fix the legislation, to reflect the intent that it stated when it was passed, 20% renewable energy by 2020".
The Construction Forestry Mining Energy Union's Rob Graaumanns organises crane drivers thaterect wind turbines.
He said he agreed with Garner. "There are 34 towers sitting in the yard at Keppel with turbines, blades all ready to go", he told GLW. "The big wind companies have been hit hard by the global financial crisis. [Multinational wind power company] Suzlon are said to have over $1 billion in steel plate laying around in Europe with no cash to do anything with it."
Graaumanns said businesses such as Keppel Prince are suffering because the big wind farm developers they contract to "are waiting for the government to dip in and give them some incentives".
A large number of approved wind power projects are waiting to go ahead. Garner estimated about $28 billion worth of the projects are stalled.
Renewable energy expert and environmental campaigner Mark Diesendorf also blames the government's REC system for the problems.
He told GLW: "The REC scheme is designed to exclude large scale renewable energy by taking up space with phantom RECs."
He said the NSW government's new feed-in tariff for rooftop solar panels would result in even more RECs taken up by household installations.
He doesn't oppose the phantom RECs as an incentive to households, but he said they should be removed from the Renewable Energy Target (RET), along with solar hot water and heat pump installations.
This would benefit wind power he said, the cheapest of current renewable technologies, although solar thermal power stations still needed further incentives (such as an industrial scale feed-in tariff) to compete.
Other environmentalists are also highly critical.
The Australia Institute's Richard Denniss told GLW he thinks the government "wants to send a signal to households that they are willing to support investment in renewable energy, but they have worked hard to conceal that increased generosity comes at substantial expense to industrial scale renewable energy projects".
Denniss said the government's "strategy is to appear to be doing something to tackle climate change and do it by spending as little money as possible".
Philip Sutton, co-author of Climate Code Red< and convenor of Victoria's Climate Emergency Network, told GLW: "If you look at the pattern of inconsistent and fluctuating support [RECs are] destabilising the industry. It gives less support than the figures indicate on the face of it, whether through malice or stupidity."
Diesendorf was the most scathing. "It is highly unlikely these fundamental design flaws in the RET could have been created by incompetence alone", he said. "They were warned about this in submissions [before the legislation was passed]."