Government figures show that last year, 3.5 million solar panels were installed on Australian rooftops last year — an average of almost 10,000 every day.

That is a 41 per cent increase on the previous year, driven by the twin incentives of cheaper solar panels from China and rising power bills.

Now one in five households are saving money on power bills by selling excess electricity back to the grid.

Tony Wood, the energy program director at the Grattan Institute, said a big incentive for many people to adopt solar was "simply because they want to save money".

But though the solar industry has been booming, he warned dark clouds were looming on the horizon.

Mr Wood said there would soon be certain times of the day when there will be too much electricity to consume — so it would lose its value.

And that would become a problem for people being paid to produce it.

Mr Wood could not predict exactly when that time would come, but said it could mean an end to cheaper power for those with solar panels.

"The governments who have been happy to support solar up until now will start to say well, paying for electricity in the middle of the day when we don't need it is actually a very inefficient thing to do, maybe we'll stop doing that," he said.

"Obviously people who put in solar would be very upset, quite rightly, because they were promised they'd continue to be paid.

"So you've got to find a way out — and possibly the only way out is the use of battery storage."