A major Australian wind turbine manufacturer has laid off 100 workers in what the industry said was a direct response to the uncertainty created by the government’s push to reduce the renewable energy target (RET).

The government and Labor are trying to strike a bipartisan deal on the policy, which currently requires that 41,000 gigawatt hours of energy come from renewables by 2020.

Both Labor and the renewables industry rejected out of hand the government’s opening gambit in those talks – to reduce the target to about 26,000 gigawatts – saying it would decimate the industry.

Keppel Prince Engineering, a turbine manufacturer based in Portland, Victoria, notified workers on Thursday morning that 100 staff would be made redundant and cited the investment drought due to government policy uncertainty as the cause.

Steve Garner, general manager at Keppel Prince, said the cause of the redundancies was “purely and simply the RET and all the uncertainty about where it is heading.”

“We need people to invest in windfarms before we can build them. Nobody is investing in windfarms and they won’t until there is a deal between the major parties,” Garner said.

Keppel Prince was poised to sack 150 workers in 2010, when the RET incentives for big wind projects were being swamped by the rapid take-up of small-scale rooftop solar, until a last-minute policy change by the then Labor government.

The Coalition government had originally signalled it wanted even deeper cuts to the target – and commissioned the businessman and self-professed climate sceptic Dick Warburton to undertake a review. Its main recommendation was for the target to be slashed to about 16,000 gigawatt hours.

But after fierce resistance from industry and concerted criticism of that review, the federal cabinet asked the environment minister, Greg Hunt, and the industry minister, Ian Macfarlane, to try to reach a bipartisan agreement about the future of the program that would allow continued investment without fear of policy change.

In May workers from Keppel Prince reportedly wrote to their local state member, Victorian premier Denis Napthine, urging him to back the existing RET and warning that “a weakened target will cost jobs, investment, and hurt businesses in the south-west”.

Macfarlane said the government wanted a target representing a “real” 20% of the current energy market – probably about 26,000 gigawatt hours – with no change to the subsidies for household rooftop solar panels and a full exemption from the scheme for all energy-intensive industries, such as aluminium, copper, zinc and cement.

Labor has not said what target it would be prepared to accept, but both major parties have conceded that bipartisan agreement and policy certainty was essential for investments to proceed.

The Australian Wind Alliance said the 100 workers were the first “victims” of the government’s “war on renewables”.

The chief executive of the Clean Energy Council, Kane Thornton, said the decision by Keppel Prince was “the consequence of years of policy uncertainty”.

“This is the kind of thing that happens when you send an industry into lockdown for a year to conduct yet another review: lots of people lose their jobs,” he said.

Dan Tehan, the Liberal MP for the local state seat of Wannon, said it was “devastating news” for the workers.

“The government is seeking to provide certainty on the RET … this demonstrates the need to get a sensible bipartisan outcome,” Tehan said.

He criticised some wind farm projects for importing turbines rather than buying locally from companies such as Keppel Prince, saying at least one project imported all its turbines through the port of Portland and drove them past Keppel Prince for installation.

Tony Abbott told parliament he “deeply regretted” any job losses and was “happy to sit down with the opposition to ensure we can give … certainty to the workers of Australia that their jobs are safe.”