The Climate Change Authority (CCA) in December recommended retention of the RET with no change; including the aim of ensuring 20 per cent of Australia's electricity comes from renewable sources by 2020.
However, there is strong evidence the target will be substantially exceeded, which critics warn will unnecessarily drive up retail power bills.
Labor's Climate Change Minister Greg Combet said detailed modelling had shown even if the fixed gigawatt-hour target were reduced, benefits to households and energy consumers would be "negligible".
AAP Newsagency reports that he said at the same time it would also lead to an additional 119 million tonnes of greenhouse gas emissions.
In handing down the government's official response to the CCA review, Mr Combet said the biggest argument against cutting the RET was that it would damage investor confidence.
"If you're an investor in the renewable energy sector you want some certainty about these policy settings," he said in the national capital, Canberra.
The government's decision to leave the RET on hold means the 20 per cent target has become the baseline, leaving the door open for an even bigger role for clean energy in Australia's future power mix.
The government also agreed to a CCA recommendation that the scheme be reviewed every four years, instead of two, to provide certainty.
Mr Combet said the conservative Liberal-National coalition did not support the current RET arrangements and had threatened to review the scheme within six months if elected.
Liberal opposition leader Tony Abbott, coalition environment spokesman Greg Hunt and Nationals senator Ron Boswell had all expressed doubts about the RET, he said.
"I don't think that players in the renewable energy sector can have much confidence in what the coalition is putting forward," Mr Combet said.
Australian Greens Party leader Senator Christine Milne said renewable energy was a success story in Australia, with one million households to be connected to solar power by June this year.
The coalition cast an "overwhelming shadow" over the future of renewable energy, as they'd refused to commit to maintaining the fixed 41,000 gigawatt-hour target for the large-scale RET if elected, she said.
"That is the critical question that Tony Abbott and Greg Hunt have to answer," Senator Milne said.
However, Mr Hunt said suggestions the coalition would cut the RET were "completely wrong", as it understood any significant changes to the scheme would create sovereign risk issues.
"The coalition is not proposing and has not proposed any changes to the target," he said in a statement.
A coalition government would review the scheme every two years as currently mandated, and would therefore revisit the RET in 2014 if it won the September federal election.
The Climate Institute has warned this would stymie investment, increase costs to consumers and slow the transformation of the sector.
"Every time there is a review of the policy there is an investment strike in clean energy," said the Institute's CEO John Connor.
The Australian Conservation Foundation urged even greater action on clean energy, but it praised the government for not capitulating to pressure from "dirty polluters" to weaken the RET.
