The heavily subsidised solar industry appears set for a shake-up after Environment Minister Greg Hunt revealed his concern that 15 per cent of the 1.3 million rooftop systems in Australia are substandard.
Mr Hunt has written to consumer affairs ministers in all states and territories, as well as solar industry leaders, insisting the number of unsafe and second-rate installations is too high.
But the head of the Australian Solar Council, John Grimes, hit back, accusing Mr Hunt of mounting a "politically motivated scare campaign" against solar and called on the minister to resign.
On Sunday, Fairfax Media revealed concerns from within the industry at a rising number of cheap and shoddy systems funded by public money.
Rebates of more than $4000 are available for standard rooftop systems that often cost less than $5000 due to Chinese imports having driven prices down over the past few years.
Mr Hunt has called in Kane Thornton, chief executive of the solar industry peak body the Clean Energy Council, and Mr Grimes for urgent talks with officials from the Environment Department.
In letters to both councils, obtained by Fairfax Media, Mr Hunt referred to figures from the Clean Energy Regulator that 3.9 per cent of rooftop PV solar systems were unsafe and 14.8 per cent are substandard.
"To put these percentages into context, there are currently about 1.3 million solar PV installations in Australia with around 170,000 new systems being added annually. This means that potentially around 32,000 of the new systems which will be installed annually could be non-compliant with current standards unless the underlying causes are addressed," Mr Hunt wrote.
"Whether the true number is higher or lower, I believe the incidence of non-compliant installations is too high. For that reason I have asked State and Territory Governments to work with the Commonwealth to address the persistent issues that have been identified as underlying causes of unsafe and substandard solar PV installations."
But Mr Grimes accused Mr Hunt of trying to "kill the industry", saying the regulator had confirmed this week that there is no systemic issue over safety in PV solar.
"This is nothing but a political scare campaign and I think the minister should resign. How can you preside over an industry in your portfolio that you are trying to kill? This is beyond the pale. The government is out of control," he said
"Mr Hunt and [Industry Minister] Ian Macfarlane are stoking public and industry fears in an absolutely unfounded way to get a political outcome."
The government appeared to have the solar industry in its sights when it called a review of the renewable energy target but it has not acted on recommendations to slash the RET by the expert panel headed by climate sceptic Dick Warburton.
In his letters, Mr Hunt referred to "recent media reports" that some solar panels and inverters are failing well before their promised lifespan.
Rebates, which are funded through higher electricity prices, are available on the basis that a household will produce a minimum 15 years of clean energy, delivering a climate benefit to society.
But the entire rebate is paid upfront and there is no penalty if a system fails within a few years. The rebate scheme does not prevent consumers accessing multiple rebates if they replace shoddy systems.
"In short, Australian households and businesses who have invested in solar PV are not always getting what they paid for. From what a number of renewable energy sector participants have subsequently indicated, this problem is likely to get worse," Mr Hunt wrote.
"There are serious consumer issues at stake, along with ensuring the integrity of the subsidy scheme. For those reasons I strongly believe the certification process for solar panels and inverters needs to reflect consumer expectations."
Mr Hunt has asked the department and the Clean Energy Regulator to work with the Australian Competition and Consumer Commission and state and territory consumer affairs organisations to consider what steps may be taken to "enhance consumers' rights".
Mr Grimes said under the Abbott government a safety advisory committee of the regulator had not sat once.
He said Mr Hunt had not shown any concern about safety despite being handed three reports in his time as minister. "The minister is not across the basics of his portfolio," Mr Grimes said.
Earlier in the week, Mr Thornton played down the scale of failures and warned against blaming production faults on systems from one country.
He said the "Chinese success story" had led to prices for solar tumbling dramatically and said most systems will produce green energy for 25 years, making up for those that fail early.
Subsidies for household solar systems have cost the public $2 billion over the past four years through higher electricity bills.