The findings, released on Monday by environmental group Solar Citizens, found households could lead the change to Australia's energy network and reduce power prices nationwide.
But it also identified hurdles to getting the most from residential solar and increasing its adoption, including inconsistent rules, unnecessary restrictions, a lack of transparency, and slow reforms.
The analysis comes days after SunWiz revealed solar panel installations continued to grow in Australia, and after research from the Australian Council of Social Services found solar panels could cut thousands from household energy bills.
The Accelerating Consumer Energy in Australia report, prepared by consultancy firm Nexa Advisory, investigated solar retailers, panel manufacturers, and industry and government organisations.
It found rooftop solar panels had the potential to lower electricity network infrastructure costs, reduce power prices, and support electric vehicle adoption.
Nexa Advisory chief executive and report author Stephanie Bashir said recent government investments focused on large-scale solar, wind and hydro projects but progress on some had stalled.
"The solution is to give the power to the people," Ms Bashir said.
"Consumer energy resources are Australia's secret weapon in transition."
But the report identified several hurdles to extracting additional benefits from rooftop solar technology, including inconsistent restrictions on solar input across the states, a lack of transparency from energy providers, slow tariff reforms, and anti-competitive rules.
For example, it found problems from an oversupply of residential solar power were rare and affected networks only during "serious power system events" – something Ms Bashir said proved the current system was too onerous.
"No one wants the lights to go out but there hasn't been evidence put forward that it is going to make that happen," she told AAP.
"Rather than introducing blunt instruments like emergency backstops in some states, and specific standards that allow the networks to override the use of rooftop solar, there are other ways like two-way tariffs to provide flexibility."
The report's recommendations included establishing a task force to set consistent rules for networks, setting new minimum supply requirements, giving the public access to more energy data, and reforming electricity tariffs.
Solar Citizens acting chief executive Joel Pringle said the report highlighted the unique opportunity Australia had to use solar power, and what politicians could achieve with reforms and incentives for solar, battery and electric vehicle adoption.
"This federal budget should be looking to do things like roll out more solar opportunities for people who face barriers, such as those in social housing, other renters, people in apartments, but also taking advantage of opportunities that household batteries provide to support the energy grid," he said.
"We need to see investment from the government into household energy resources."
