The one million mark was exceeded on March 12, with an analysis of government data by solar industry consultants SunWiz finding 1,011,478 systems had been installed across the country at the end of last month.
The growth in rooftop solar has rapidly increased from fewer than 900 installations in 2006 to more than 300,000 last year.
Clean Energy Council chief executive David Green said about 2½ million Australians now lived in homes with solar panels.
"It is remarkable when you think that just five years ago in 2008 there were only about 20,000 systems installed across the entire country," Mr Green said.
"For some years solar has been most enthusiastically embraced by those in mortgage-belt suburbs, retirement areas and regional parts of the country. People from all walks of life have been installing solar as a way of protecting themselves from power price pain over the long term."
Federal and state governments have reduced or axed incentives for rooftop solar over the past few years, citing the large costs of the schemes and the falling cost of rooftop solar largely due to mass manufacturing in China.
Critics say those incentives for rooftop solar, namely feed-in tariffs, increased the power costs for consumers because a premium was paid for solar power fed back into the electricity grid. Some bodies have also questioned whether subsidising rooftop solar as a way to cut greenhouse gas emissions is efficient and cost effective.
Despite the massive take up of solar photovoltaics (PV), the technology still produces only a small proportion of Australia's electricity needs. Coal is still the dominant supplier of electricity, while hydro and wind are the largest renewable energy sources.
SunWiz data found that over the past year, the 2725 gigawatt hours of power generated by solar PV represented about 1.2 per cent of Australia's electricity needs.
But the rapid take-up of solar panels has been credited with contributing to a recent fall in electricity demand, alongside falls in manufacturing and behaviour changes due to rising power prices.
Of the states, Queensland has the most solar systems installed, at 304,000. NSW follows with 227,663, and then Victoria at 177,851.
SunWiz managing director Warwick Johnston said the cuts to government incentives were expected to reduce the number of solar panel installations over the next four years.
But he said installation rates would remain higher than those in the early part of past decade.
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