The regulator says the 2 million small-scale installations, most of which are solar -- including 1.1 million solar photovoltaic rooftop appliances and 842,000 solar systems used to generate hot water -- have a capacity to generate or displace approximately 6,882 gigawatt hours of electricity annually. That's equal to the electricity needed to power about 1.04 million Australian homes for a year, it says.
The regulator attributed the 2 million-milestone to the falling cost of solar panel systems and the country's renewable energy target.
"Assisted by falling system costs coupled with financial incentives derived from the Renewable Energy Target, small-scale systems have become more and more affordable for everyday Australians," the regulator said in a statement Thursday.
Australia's Renewable Energy Target scheme, enacted in 2009, requires energy retailers and large customers to source a proportion of their energy from renewable sources. It calls for 20 percent of the country's power generation to come from renewable sources by 2020.
Some members of the Coalition government have called for scaling back or dismantling the renewable energy target, saying it adds to energy costs.
Australian Prime Minster Tony Abbott indicated last month the scheme, which he said was causing "pretty significant price pressures" on electricity -- would be evaluated as part of a review of the country's energy policy.
"We are going to have a good, long, hard look at this with the fundamental objective of doing what we can to get power prices down," Abbott said in an interview with Sydney radio station 2GB Thursday. "Australia should be ... the affordable energy capital of the world. We have a superabundance of coal," the prime minister said.
Australia accounts for about 1.5 percent of global carbon dioxide emissions, but ranks at the top of developed nations on a per-capita basis because of its heavy reliance on coal for the production of electricity.
Australia's biggest wind power supplier, Infigen Energy, which is also involved in solar projects in the country, predicts a slow start for the sector this year because of uncertainty regarding the renewable energy target.
"I wouldn't expect very many, if any, large scale renewable energy projects to be committed to construction before the review is finalized because there is uncertainty about what's going to happen to the scheme and the trajectory," Jonathon Upson, Infigen's government affairs manager told the Australian Broadcasting Corp.