AN $800 million wind farm planned for Victoria's west may not go ahead as a collapse in the price of renewable energy certificates threatens the industry's future.

Media reports said AGL Energy might dump the wind farm planned for Macarthur, near Hamilton in Victoria's southwest, unless the Federal Government could resolve the uncertainty in the sector.

The 350-megawatt wind farm would go ahead under "enormous pressure'', AGL Energy director Michael Fraser said.

But the value of renewable energy certificates issued for green power production had almost halved, he warned.

Prices had dropped because the certificates were now being issued to householders who installed solar hot water systems and other renewable energy products that do not generate power, Mr Fraser said, describing the policy as a "fraud'' that threatened the industry's future.

"The reality is that you've seen virtually no new announcements around large-scale investments in the renewable sector from anybody for months now,'' he said.