The Federal Government wants the household solar panels and hot water scheme to continue and says it will start negotiating the future of the Renewable Energy Target (RET) with the Opposition.

The Coalition has been reviewing the RET which requires that 20 per cent of the nation's power come from renewable sources by 2020.

Minister for Industry Ian Macfarlane said the target needed to be reviewed because it was based on an estimated amount of electricity that was now out of date.

He said negotiations with Labor would include a push from the Government to keep the rooftop solar program.

"We see one of the areas where there'll be very strong growth is renewable rooftop [solar panels] and so why would you cut that scheme off any faster than is legislated which is over 15 years?" Mr Macfarlane said

A report commissioned by the Government released earlier this year recommended cutting back or scrapping the rooftop scheme. Nearly 2 million homes have installed solar panels.

The report, headed by businessman and former Reserve Bank board member Dick Warburton, said small-scale solar systems should not be subsidised because they were becoming cheaper and power prices were dropping.

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The Government has also announced it wants to scale back the growth of electricity generated from renewable sources.

The original 20 per cent was based on an estimate of 41,000 gigawatt hours of power being used by 2020, but Mr Macfarlane said the "real" 20 per cent figure will be about 27,000 gigawatt hours.

"We will maintain the RET at 20 per cent real," he vowed.

But Opposition Leader Bill Shorten said Labor's negotiating position was clear.

"Labor has made it clear that we'll engage in discussions but we've got no-go zones. The Government says they want a real 20 per cent. I call it a fraud 20 per cent, a fake 20 per cent. The truth of the matter is renewable energy is part of our energy mix," he said.

Mr Macfarlane said there were also plans to exempt the aluminium and copper industries from the target.

"We do have to be practical - we didn't sign up to [a] 27 per cent target," he said.

"We signed up to a 20 per cent target. We do need to exempt those industries that are under economic pressure."

The RET was initially set up by the Howard government to encourage investment in electricity produced from sources such as solar and wind, but the Rudd government expanded the RET scheme to mandate 20 per cent of all electricity would come from renewable sources by 2020.