A new report released at climate talks in South Africa overnight has found the number of solar panels installed in Australian homes has grown 35-fold in the past three years.

The Clean Energy Report says more than 1 million Australians now live in homes powered by solar panels and the nation is on track to meet its target of a fifth of its energy from renewables by 2020.

The industry's peak body, The Clean Energy Council, produced the report and says heavy rains have boosted hydropower catchments, which have provided two thirds of the country's renewable energy in the past year.

While state feed-in tariffs helped increase the popularity of solar energy, the report found uncertainty over whether a carbon tax would be introduced stalled larger projects like the construction of new wind farms.

The Clean Energy Council's director, Kane Thornton, thinks that will change in 2012.

"Now that's been legislated, and I think it's fair to say that it's unlikely that carbon price will be repealed, we're confident that investors will have the confidence to go ahead," he said.

"We've seen a strong year for solar power, there's a lot of pent-up investment in large-scale wind projects. We're optimistic that there'll be a strong growth in large-scale wind farms over the coming years."

He says wind power is the most cost-effective way for Australia to meet its clean energy target.

Renewable energy produced nearly 10 per cent of Australia's electricity in the 12 months to September, in a market worth $5.2 billion a year.

'Bubble has burst'

The Clean Energy Council says the figures show solar power has come of age.

But Australia's only solar panel maker is not so optimistic.

The chief executive of Silex Systems, Michael Goldsworthy, says the collapse of government incentives and increased competition from overseas has devastated his business.

"What we've seen over the last two or three years is a bubble that's burst now," Mr Goldsworthy said.

"There's no value put on PV (photovoltaic) in New South Wales which was half of our market, and so there is no incentive to put PV panels on your roof today, even though there was perhaps a generous or even too generous a policy in place the last two years before that.

"On top of that we are competing against a massive influx of cheap Chinese imports and the Australian dollar which doesn't help local manufacturing.

"So as the only local manufacturer of PV panels in Australia, we've put our factory on hold. It is in a care and maintenance mode and we just have to assess the market and our business model in the new year."

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Like solar, wind is also a smallish part of the clean energy mix.

But the investor relations manager at wind farm company Infigen Energy, Richard Farrell, says it is a growing industry.

"There has been a bit of delay in the development of wind farms due to the oversupply of renewable energy certificates," Mr Farrell said.

"That's been due to a lot of the small-scale solar schemes that have been in place over the last number of years which have been heavily subsidised through feed-in tariffs from state governments.

"There is going to be a supply shortfall in around 2014, but given it takes about two years to build a wind farm of any decent size, we expect development to pick up in 2012 and beyond."

The Clean Energy Council says Australia is on track to meeting its 20 per cent renewable target by 2020, but it will be a hard slog.

Although renewable energy generates about 10 per cent of Australia's power, 80 per cent still comes from the burning of black and brown coal.