Australia's peak body for the renewable energy industry has decried the Coalition's proposed scrapping of ARENA in its 2014 budget, saying the move will result in jobs and investment shifting to other countries.

According to the Clean Energy Council, the Coalition’s plans to abolish the Australian Renewable Energy Agency (ARENA) will be a severe retrograde move for a burgeoning domestic industry, which has already reached the cutting edge of innovation in areas such as large-scale solar, geothermal and ocean energy.

Kane Thornton, deputy chief executive of the Clean Energy Council, said the decision to scrap ARENA sends a strong signal to both domestic and international players in the sector, and will severely vitiate the ability of Australia’s renewable energy sector to compete on a globalised playing field.

“A global race for renewable energy is on, and the removal of ARENA will see potential Australian and international investors now look to countries with much stronger support for renewable energy innovation,” she said. “We may well miss out on billions of dollars of investment and highly skilled jobs.”

Thornton further pointed out that weakening the Australia’s renewable energy sector was an imprudent move from a jobs perspective, given the large contribution the industry could make to flagging employment growth.

“Abolishing ARENA is a backwards step for the ‘clever country’ at a time when job losses in traditional industries like the automotive and manufacturing sectors mean we need new, innovative industries to take their place and fill this void,” she said.

The decision will also leave the much-vaunted Million Solar Roofs program with little chance of getting off the ground, given that the Coalition had made ARENA responsible for its funding.

“It’s disappointing to see (Million Solar Roofs) abandoned before it had even begun,” said Thornton. “This is a blow to low income households which stood to gain from being able to access solar through the program, as well as for local manufacturing jobs that are created by the solar water heating industry.”

ARENA was established only two years ago with full bi-partisan backing as an independent statutory authority of the Australian Federal Government, for the purpose of managing its renewable energy programs and increasing the prominence and competitiveness of renewable energy in the domestic power portfolio.

Thornton said the Coalition’s decision to switch its stance on the agency was “extremely disappointing” given its past record of full support for ARENA while still in opposition.

The removal of both ARENA and Million Solar Roofs will also heighten the critical role of the Renewable Energy Target in supporting clean energy projects, making its preservation imperative for the future health of Australian renewable energy.

“The target is already playing its role in encouraging new renewable energy projects at little cost to consumers… 2020 the Renewable Energy Target will save every Australian household more than $50 on their power bill,” said Thornton. “If the Renewable Energy Target is reduced or wiped out, all Australians will lose.”