The public appetite for community funded renewable energy appears to be limitless, with projects proving so popular they are selling out within minutes of being offered to investors.

The latest initiative — a massive solar panel system on top of a wholesale bakery in western Sydney — saw people flocking to invest.

Within six hours, 20 investors had pitched in almost $400,000 to install a huge 230 kilowatt solar system on the bakery's roof.

The project has been set up by volunteer-run ClearSky Solar Investments.

Here's how it works

A huge 230 kilowatt solar system will be installed on the Bakers Maison roof. ( Supplied )

The company Bakers Maison will pay investors for the solar energy it uses over a period of between seven to 10 years. The investors get a 7 per cent return on the money they put in.

After that time, the business owns the panels and will use its energy for free.

"There's a huge appetite out there for people to invest in renewable energy, we just need more projects," ClearSky director Warren Yates said.

Pascal Chaneliere says getting involved in community solar was the smart thing to do. ( ABC News: Amy Bainbridge )

Bakers Maison employs 120 people and runs every day of the year, baking and freezing French-inspired products that are sold to all corners of Australia.

"We are spending hundreds of thousands of dollars in utility bills," general manager Pascal Chaneliere said.

The bakery already had a 100 kilowatt solar power system, which will now be bolstered by this new, much larger community project.

Mr Chaneliere said getting investors involved to help out with the costs of the new solar panels would help further reduce their bills.

"We signed a contract for the cost of electricity for the next coming years, so it makes a lot of sense. We know exactly what will be the expenditure for the next five years."

Investor Andrew Rogers grew up in the same suburb as the Revesby bakery.

"I invested $20,000 into this one, it gives me a good rate of return, it's nearly 7 per cent," he said.

"At the same time as an investor I'm happy, I know the money is creating some good."

Bakers Maison employs 120 people and runs every day of the year. ( ABC News: Amy Bainbridge )

There's an 'oversupply of investors'

Tom Nockolds thinks "there's definitely an oversupply of investors" for community renewable projects. ( ABC News: Amy Bainbridge )

A smaller project with solar panels on top of a Sydney brewery sold out last year in just nine minutes, through community group Pingala.

Pingala volunteer Tom Nockolds said the group had already identified 30 more potential locations for future projects.

"We won't be able to do them all at once but we'll get to them in turn and we won't stop at 30, we want to do 30, 60 and 120 on our way to doing as many as we can," he said.

"There's definitely an oversupply of investors and an undersupply of projects."

What's holding up more projects?

Volunteer groups said there were plenty of investors, but rules and regulations made it hard to get projects up quickly.

"In other countries, community energy has taken off at a much faster rate than in Australia," Warren Yates said.

"We've had to duck and weave our way through the regulations to set up this kind of operation.

"It's not efficient, and we could do much more with the appropriate regulatory environment."

Mr Yates said it was up to the government to change the rules to help streamline the process for groups trying to get similar projects up and running.

David Blowers from the Grattan Institute said community projects had potential to save the electricity grid from expensive upgrades that are passed on as costs to consumers.

He said network businesses should look to get involved in some community projects.

"You want to see a framework which encourages the right sort of solution for the right sort of problem," Mr Blowers said.

"At the moment it's a one solution fits all, which is you build more poles and wires.

"And the problem with that is once people start using less grid-based energy because they're generating their own, all of a sudden other people have to pay for the grid that remains."

He said the Government needed to look at the way the grid costs were regulated to make sure costs were spread fairly.

Millions already invested in Australian community solar

New figures show more than 50 community solar projects are up and running across the nation, with individuals investing almost $24 million.

But Australia remains well behind Denmark, which has 5,500 projects up and running, many of those wind farms.

Scotland has more than 500 community energy projects, while Germany has 880 energy cooperatives.