Going Solar in New Zealand: Powering your future

What is solar energy and why is it gaining popularity in New Zealand?

Solar energy is a renewable power source that harnesses the sun’s radiation (often called irradiance) and converts it into usable electricity. In recent years, solar technology has become increasingly popular and viable in New Zealand, thanks to improving technology and falling costs. This clean energy solution is helping Kiwis reduce their power bills while contributing to a greener future.

How much sunshine does New Zealand receive?

New Zealand is blessed with ample sunshine, making it an ideal location for solar energy generation. While Nelson boasts the highest average sunshine hours nationally (around 2,400 annually), many other regions are not far behind. Marlborough, Canterbury, Otago, and most of the North Island also bask in high levels of sunshine. Even areas with less direct sunlight can still benefit significantly from solar installations as modern panels efficiently capture the available irradiance across a wide range of light conditions.

How do solar photovoltaic (PV) systems work?

Solar PV systems are at the heart of the renewable technology revolution. These clever systems use solar cells to directly convert sunlight into electricity through a process known as the photovoltaic effect. The term “photovoltaic” itself combines “photo” (light) and “volt” (electricity), perfectly describing how these systems operate.

A solar panel has silicon semiconductor layers that absorb solar radiation. When sunlight hits these layers, an electric current is generated that can be harnessed for power. It’s a simple yet ingenious process that’s helping to reshape New Zealand’s energy landscape.

What are the benefits of going solar in New Zealand?

Embracing solar energy offers a multitude of benefits for Kiwi homes and businesses.

Nowadays the number one reason we see people moving to solar is financial. Gone are the days where solar was solely the domain of those prepared to (at least partially) ignore the economics for the sustainability benefits and/or the opportunity to use cutting edge technology to power their house. Now for most it is all about the 10-15% return on investment (6-9 year payoff) we are typically seeing for new grid tie systems; and this return will rise if power costs rise more quickly than the model predicts (we use 3% pa) or you can make changes to your power usage patterns to maximise the use of solar.

In addition, solar power is clean and renewable, producing no emissions during operation, thereby helping to reduce your carbon footprint.

Solar, particularly when coupled with a battery, also offers a degree of energy independence, reducing reliance on the grid and power companies. This can be particularly appealing in remote areas or for those looking to have more control over their energy supply.

From a practical standpoint, solar PV systems are remarkably low maintenance. With no moving parts, they require minimal upkeep, making them a relatively hassle-free addition to your property. We typically recommend you clean your panels every 12-18 months but that is it. Moreover, quality solar panels have a long lifespan with an expected lifetime of 30 years or more, providing excellent value for money.

An often-overlooked advantage is the potential increase in property value. As more Kiwis recognise the benefits of solar, homes equipped with these systems are becoming increasingly attractive to buyers.

What types of solar PV systems are available in New Zealand?

When considering solar power for your property, you’ll encounter three main types of systems: off-grid, grid-tie (or grid-connected) and hybrid systems.

1. Off-Grid Systems – These standalone systems are not connected to the power grid. Instead, the 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 solar systems are also the ultimate in independence, a goal for many people. 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.
2. Grid-Tie Systems – Grid-tie solar systems, which are connected to the power grid, are the most common solar installation in New Zealand. They use solar panels to generate power during the day, with any excess fed back into the grid for a credit on the power bill. When the solar isn’t generating enough power, electricity is drawn from the grid as it is for a normal grid-connected property. These systems are cheaper and simpler than off-grid systems, as they don’t include batteries or any back-up power source and grid access provides the benefit of being able to export excess power and import when required.
3. Hybrid Systems – Hybrid systems (also known as Grid-tie with ESS) are connected to the 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. Some energy retailers are now offering higher export rates to those with batteries who export power during high demand periods on the grid.

Is solar power a good investment in New Zealand?

The financial aspect of going solar has become increasingly attractive in recent years. The cost of solar PV systems has decreased significantly, making them more accessible to a wider range of Kiwi households and businesses. Adding to the financial argument for solar, the price of power has been increasing meaning that each unit of power you produce on your roof is worth more to you. The combination of these factors now mean that many residential systems are projected to provide returns of 10-15%, equating to payoff periods of 6-9 years. Commercial systems can see much higher returns, up to 30% pa, due to the very high alignment between the timing of the power consumption by the business and the generation of power from the solar on the roof.

Residential systems typically range from $8,000 to $22,000 NZD, depending on size and complexity. Commercial systems, which can range from 10kW to 1MW, vary based on the project scope. While these figures might seem substantial, it’s important to consider the long-term savings and benefits.

Given that quality systems can last 30 years or more, this represents a significant period of ‘free’ electricity once the initial investment is recouped (although it would be prudent to factor in a change of inverter in that time period).

What does the future hold for solar energy in New Zealand?

The outlook for solar energy in New Zealand is bright. Experts predict that solar PV could make up 6% of New Zealand’s electricity supply by 2035, marking a significant increase from current levels. This growth is expected to be supported by continued technological improvements, which should further reduce costs and increase efficiency.

The integration of solar power with other technologies, such as battery storage and electric vehicles, is set to enhance its value proposition even further. As grid electricity prices continue to rise and solar costs decline, the economic case for solar power in New Zealand is only getting stronger.

For Kiwis looking to reduce their carbon footprint, gain more control over their energy costs, and invest in a sustainable future, solar energy presents an exciting opportunity. As technology advances and adoption increases, solar power is poised to play an increasingly important role in New Zealand’s energy landscape.