Australia’s underregulated solar industry opens customers to predatory sales practices, a new report warns.

As the local solar industry booms, serious questions are being asked about the laws designed to protect consumers.

The Sunny Side Up report from the Consumer Action Law Centre finds that almost 700 solar companies have gone out of business since 2011, leaving up to 650,000 Australians with no options if their systems fail.

“Unfortunately our solar sector is effectively unregulated,” Gerard Brody from the Consumer Action Law Centre has told the ABC.

“Many providers out there [are] looking at things like the government subsidies that are in place and are swarming like bees to a honeypot, wanting to make as much money, but not really interested in delivering a quality product and service.

“I think people that have managed to not have any problems whatsoever are probably the lucky ones. There are many people out there that have problems.”

The experts also say solar businesses often “phoenix” - folding and then re-opening under another name to avoid paying warranties or creditors.

The Australian Competition and Consumer Commission (ACCC) chairman Rod Sims acknowledged the issues too.

“You just saw this swarm of people come into a market where you actually didn't have many people in the market,” Mr Sims said.

“So a whole lot of new players came in and that's always a bit of a worry.”

The Consumer Action Law Centre is calling for enhanced rules and standards to protect customers during the switch to carbon neutrality.