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Australia has cemented itself as a world leader in the use of rooftop solar with yet another record year for installed capacity.

Figures released yesterday by the Clean Energy Regulator show that there was more than 1057 megawatts of capacity installed last year, beating the previous record of 1035 megawatts set in 2012.

This brings the total installed small-scale capacity in Australia to more than 6000 megawatts.

Federal Minister for the Environment and Energy, Josh Frydenberg, said Australia has the highest penetration of rooftop solar in the world.

"One in five Australian homes has rooftop solar and an increasing number of small businesses are making the most of the financial and environmental benefits of solar," he said.

The Clean Energy Regulator predicts 2018 will see at least another 1000 megawatts of capacity added to Australian rooftops.

The Small-scale Renewable Energy Scheme provides financial incentives for households and businesses to install renewable energy systems to reduce their reliance on the electricity grid and reduce emissions.

Earlier this year, the Clean Energy Regulator announced the Renewable Energy Target will be met thanks to more than $12 billion of investment in large-scale projects.

"Whether it be small or large-scale projects, there continues to be record breaking level of investment in renewable energy under the Turnbull Government," Frydenberg said.