Opposition Leader Bill Shorten says Labor is willing to compromise with the government on a Renewable Energy Target of 33,000 gigawatt hours of annual renewable energy production by 2020.
There is growing optimism on all sides that a deal may finally be struck after months of delay with cabinet set to examine a revised deal as soon as Thursday.
Signalling a shift in Labor's position that could end a months-long stand-off between the two major parties over the RET, Mr Shorten said the sector needed investment certainty and jobs in the sector needed to be protected.
"We will work towards a deal. We've said 33,500, if it's the last issue on the table and the government wants to save face by saying 33,000 gigawatt hours as opposed to 33,500, OK," he told ABC Radio National, in an apparent reference to Liberal MP Dan Tehan who last week called for the government to lift its target and reach an agreement on 33,000 GWh.
"This game has gone on too long, the government is killing the renewable energy industry. We will have a look at it - if they say 33,000, if they are serious and whether industry could live with it, and we will take it to our caucus."
Mr Shorten said that, in the longer term, Labor's view was that the renewable energy target should continue to rise to stimulate investment in the clean energy sector.
The announcement came after discussions between Mr Shorten and Labor's environment spokesman Mark Butler over the weekend.
The Coalition is seeking a meeting with Labor this week to restart negotiations and a spokeswoman for Industry Minister Ian Macfarlane said the government's door was open.
Prime Minister Tony Abbott on Monday welcomed Labor's willingness to move to 33,000 gigawatt hours, but would not say if the Coalition would now move too.
"It's for ministers [Ian] Macfarlane and [Greg] Hunt to finalise any arrangements that might, as I said, keep power prices down and protect jobs because that's what this has got to be all about - keeping power prices down and protecting jobs," he said.
At the same time, a Coalition of seven business groups comprising the Business Council of Australia, the Australian Chamber of Commerce and Industry, the Australian Industry Group, the Aluminium Council, the Cement Industry Federation, the Energy Users Association and the Tasmanian Minerals and Energy Council called for an end to the political impasse.
In a joint statement, the groups praised both sides of politics for edging closer to a deal, with just 1000 gigawatts now separating the two sides.
"These positions are now close and we ask both sides to resolve the issue, with a compromise of 33,000 GWh. That will provide a stable bipartisan basis for investment in energy supply including renewables, conventional energy and energy dependent industry," the group said.
"Failing to agree on the Renewable Energy Target will continue to block investment in renewable energy generation and in electricity supply. It will also impose significant unnecessary costs on industry that relies on electricity."
Clean Energy Council chief executive Kane Thornton said: "We would welcome a formal shift in the government's position, and would be happy to consider any proposal on its merits."
The Coalition initially wanted the RET to be slashed from a mandated 41,000 gigawatt hours to 26,000 hours by 2020, but has since moved to 32,000. When negotiations between the two sides began Labor initially pushed for figure in the mid-to-high 30,000s, but has since moved to 33,500.
