Renewable energy has surged in popularity in recent years, and solar power is at the forefront of this green revolution. New Zealand, known for its clean energy sources like hydropower and geothermal, is increasingly adopting solar energy. However, Kiwis still question whether solar power is a suitable investment for New Zealand homeowners. This article explores the benefits of solar power and whether it is a smart choice for the Kiwi market.
What is the current state of solar power in New Zealand?
New Zealand receives about 2,000-2,500 sunlight hours per year, which is comparable to Germany—a global leader in solar energy. Although our climate varies, many areas have sufficient sunlight to make solar power viable. Most regions, especially in the North Island, experience abundant sunshine, making solar panels an effective way to harness energy from the sun and reduce reliance on the national grid.
In October 2022, data from the Electricity Authority showed that New Zealand had 43,641 installed solar systems, totaling 240 MW, accounting for less than 1% of the country’s total electricity consumption. While global adoption of solar has surged over the past decade, uptake in New Zealand has been comparatively slower. However, with decreasing technology costs, there is significant potential for increased adoption, particularly for grid-scale projects and installations on commercial building rooftops. 1
This ongoing decrease in costs – which is expected to continue – indicates that solar energy may play an increasingly significant role in our electricity grid as electrification accelerates. Forecasts suggest that solar could account for up to 6% of New Zealand's electricity supply by 2035.
What are the benefits of solar power?
Reduction in energy bills
One of the most compelling reasons for investing in solar power is the potential savings on electricity bills. By generating their own power, homeowners can reduce their reliance on the grid. The more sunlight an area receives, the greater the energy production, resulting in lower power bills. According to some estimates, a typical household in New Zealand could save between $500 and $1,000 annually by switching to solar power, depending on factors like location, energy consumption, and the size of the solar system.
Environmentally friendly energy source
Solar power is a renewable and clean energy source, producing no greenhouse gas emissions once the system is installed. This aligns with New Zealand’s commitment to reducing carbon emissions and achieving its climate goals with total net emissions of no more than 290 megatonnes from 2022 to 2025, and 305 megatonnes from 2026 to 2030. By opting for solar power, homeowners can significantly reduce their carbon footprint and contribute to a greener future. 2
Energy independence and resilience
Solar panels allow homeowners to generate their own electricity, reducing their dependence on the national grid. This can be particularly beneficial during peak demand times, power outages, or in remote areas where access to the grid may be limited or costly.
Households have access to several types of solar power systems commonly installed across New Zealand, each catering to different energy needs, budgets, user preferences and property types.
The three broad categories frequently installed include:
- Off-grid systems – Not connected to the national grid, this system is designed to generate, store and distribute all the power a property needs, making them ideal for locations without grid access or where installing a grid connection is either not viable or expensive. Off-grid systems typically require a larger array of solar panels, higher capacity battery storage and a back-up generator to ensure a continuous, reliable power supply.
- Grid-tie systems – Connected to the national grid, this system is the most common solar installation in New Zealand that use solar panels to generate power during the day, with any excess fed back into the grid for a credit on the owner’s power bill.
- Hybrid systems – Hybrid systems (also known as Grid-tie with ESS) are connected to the national grid but have batteries integrated into the system to store excess solar power. This stored power can then be used during the evening or a grid outage, providing an extra layer of energy independence and security.3
Minimal maintenance and long lifespan
Solar panels are durable and require minimal maintenance. Most panels come with warranties ranging from 20 to 25 years, ensuring long-term savings and energy generation. Regular cleaning and occasional check-ups are typically all that’s required to keep solar systems running optimally. 4
What are the challenges to consider when looking at installing solar power in your home?
High initial costs
Although solar prices have dropped significantly, the initial installation cost can still be a barrier for some homeowners. The average cost of a residential solar system in New Zealand can range between NZD 6,000 to NZD 12,000, depending on the system size and battery requirements. However, with proper financing and the savings on electricity bills, many homeowners find that the system pays for itself over time. 4
Regional variation in sunlight
Solar efficiency can vary depending on the region. While most areas in New Zealand receive ample sunlight, regions with less sun exposure may not generate as much power. Homeowners should consider local sunlight hours and consult with solar providers to determine the system size and viability for their specific location.
NIWA has developed SolarView, an online tool that estimates the solar energy potential at specific locations for homeowners considering solar energy systems. This tool enables users to assess the expected solar energy (insolation) at a given site, considering factors such as local topography, panel orientation, and potential obstructions like buildings.5
Energy storage costs
Without a solar energy storage system, any excess energy generated by your solar panels that isn’t immediately used by your home will be lost. Adding a battery storage system can increase your energy independence, allowing you to use stored energy during low-sunlight hours or power outages. However, it is also an additional investment. While battery storage can be costly, prices have steadily declined, making it an increasingly accessible option.
Solar battery prices typically range from $10,000 to $20,000, depending on factors such as capacity, output, and expected lifespan.6 Batteries with higher output and longer lifespans tend to fall at the higher end of this range. Rather than choosing the cheapest option, it is recommended that you consider the energy needs of your household, the upfront cost of a battery against the overall investment in your solar panel system, and the lifespan of both systems.
Is solar power a worthwhile investment in New Zealand?
For many homeowners, solar power is a sound investment. The environmental benefits, potential for reduced energy bills, and increasing affordability make it an attractive option. Additionally, as energy prices rise and battery technology improves, the financial case for solar is likely to strengthen.
Solar power is indeed a suitable and beneficial possibility for many Kiwi homeowners, offering a range of environmental, financial, and practical advantages. While the initial costs may seem high, the long-term benefits, energy independence, and contribution to a sustainable future make it an investment worth considering.
That said, solar power may not be ideal for everyone. Homeowners should consider factors like sunlight exposure, energy consumption, and the potential return on investment before deciding. Consulting with a professional solar provider can offer more tailored advice.
This article is for informational purposes only. Active Electrical Suppliers Ltd encourages readers to consult professional solar energy providers for expert advice and guidance tailored to their specific needs before making any decisions about the installation of a solar energy system.
Sources (Click the source to view the website)
1 Energy Efficiency and Conservation Authority (EECA)
2 Ministry for the Environment
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