The closure of a solar panel factory shows the sector needs a mandatory target for renewable energy to flourish, the Australian Greens say.
BP Solar is shifting its Sydney operation - employing 200 people - overseas, saying its solar panels can be made more cheaply elsewhere.
Greens senator Christine Milne says the government is impeding the spread of renewable energy.
It had failed to legislate a mandatory 20 per cent renewable energy target, opposed a gross national feed-in solar tariff, and shelved funding for the solar sector, she said.
"I think BP Solar could see the writing on the wall," Senator Milne told ABC Television, adding companies were moving overseas where there was greater potential to invest in renewable energy.