Solar Buy-Back Rates and What They Mean for You

At Current Generation, our approach is to empower you with the knowledge to make informed decisions about solar energy. As solar photovoltaic (PV) technology becomes more affordable and accessible, understanding the financial aspects—including buy-back rates—is crucial for anyone considering solar installations in 2025.

 

Understanding Buy-Back Rates

Buy-back rates (sometimes called export rates) are the prices electricity retailers pay for the excess electricity your solar PV system generates and feeds back into the grid. Feed-in tariffs (FITs) are similar but are often set by government policy to encourage renewable energy by guaranteeing a fixed, attractive price for exported electricity over a certain period.

In New Zealand, there isn’t a government-mandated feed-in tariff scheme for solar power. Instead, electricity retailers set their own buy-back rates, which are generally lower than the retail rates consumers pay for electricity.

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Current Buy-Back Rates in New Zealand (as of June 2025)

Here is an overview of the buy-back rates offered as of June 2025 by some major electricity retailers (source: www.powerswitch.org.nz/solar-rates):

  • Power Edge: 17.39 cents per kWh with a five-year contract; otherwise, 12.5 cents per kWh without a contract.
  • Meridian Energy: 17 cents per kWh plus a $300 credit with a 3-year fixed-rate solar plan; 12 cents per kWh on other plans.
  • Octopus Energy: OctopusPeaker Plan: peak rates of 40 cents per kWh in winter, 23 cents per kWh peak rates at other times of year, 10 cents per kWh off peak and 5 cents per kWh overnight;  OctopusFlexi Plan: 17 cents per kWh.
  • Pulse Energy: 14.2 cents per kWh, can vary by location.
  • Powershop: 13 cents per kWh on all plans.
  • Electric Kiwi: Movemaster Plan: 20 cents per kWh peak rate, 10 cents per kWh off peak; other plans 8 cents per kWh.
  • Ecotricity: 13-21 cents per kWh, depending on location, plan and, in some cases, time of day.
  • Genesis Energy: 12 cents per kWh on all residential plans.
  • Frank Energy: 11 cents per kWh without a fixed-term contract; system must be less than 50 kW.
  • Nova Energy: 10 cents per kWh.
  • Mercury Energy: 5 cents per kWh.
  • Contact Energy: 8 cents per kWh on most residential plans.

Please note that these rates can change, so we recommend checking with the retailers directly for the most current information.

 

Maximising the Benefits of Your Solar PV System

The difference between the higher retail electricity prices (approximately 30 cents per kWh) and the lower buy-back rates means that the financial return on your solar PV system will be impacted by how much of the generated electricity you can use yourself.

For example, a 3 kW solar PV system might produce around 4,500 kWh annually. If you consume 70% of this energy, you avoid purchasing 3,150 kWh from the grid, saving about $945 per year. The remaining 1,350 kWh exported to the grid would earn you approximately $169 if your buy-back rate is 12.5 cents per kWh. This results in a total annual benefit of around $1,114.

 

Tips to Maximise Self-Consumption

  • Shift Your Energy Use: Run appliances like dishwashers, washing machines, and dryers during daylight hours when your solar system is generating power.
  • Use Energy Management Systems: Install smart home systems, energy diverters and even timers to automate and optimise your energy use.
  • Consider Battery Storage: While it requires additional investment, a battery can store excess energy for use during evenings or cloudy days, increasing your self-consumption rate.

 

Potential Regulatory Changes Supporting Solar

The Energy Competition Task Force (jointly established by the Electricity Authority and the Commerce Commission) is investigating ways to improve the performance of the New Zealand electricity market.

This is relevant to people with solar and battery energy storage systems (BESS) as they have specifically been looking at, and consulting on, ways to encourage more ‘fairness’ for those consumers who are helping to ease the strain on the infrastructure and the market as a whole.

At present, two specific initiatives are being looked which directly support solar and BESS

  • Requiring distributors to pay a rebate when consumers supply electricity at peak times (Initiative 2A): This would require lines companies, also know as electricity distribution businesses, or EDBs, (e.g. Network Tasman, Nelson Electricity, Marlborough Lines) to pay consumers rebates. The intention is that this would encourage consumers to supply power into the network when it is needed and ‘fairly reward’ them for doing so.
  • Requiring large retailers to better reward consumers for supplying power (Initiative 2C): This would require retailers to fairly compensate consumers who export power, particularly rewarding those who export power at times of peak demand. The intention is that, from 1 July 2026, large retailers (more than 5% of the market) will be required to offer plans that meet this objective.

 

Current Generation View

There is no doubt in our mind that a more distributed power generation and storage market, predominantly underpinned by the adoption of solar and BESS by consumers (both residential and commercial), is critical to helping to solve the near-to-medium term challenges in New Zealand; namely its lack of security around its centralised generation capacity and transmission network.

Our reliance on hydroelectric power makes us vulnerable to dry years and changing climate patterns. Distributed solar generation can help mitigate these risks and contribute to energy security. It also helps reduce the need to fire up the hugely polluting coal power stations such as Huntly which currently act as the backstop to our power needs.

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Looking Ahead

While there are challenges, the future of solar energy in New Zealand is promising:

  • Technological Advances: Improvements in solar technology and decreasing costs make solar PV systems more attractive, even without high buy-back rates.
  • Climate Change Commitments: Increasing pressure to reduce carbon emissions may prompt policy shifts to support distributed renewable energy generation.
  • Consumer Advocacy: Growing demand for fair compensation could influence electricity retailers to offer better buy-back rates or encourage the government to enact supportive policy.

At Current Generation, we’re committed to helping you navigate the solar energy landscape. Investing in a solar PV system can be financially beneficial, especially when you maximise your self-consumption. By making informed decisions, you can contribute to New Zealand’s renewable energy goals and enjoy personal financial rewards.

  • Research Electricity Retailers: Find the best buy-back rates and plans that suit your needs.
  • Optimise Your Energy Use: Adjust your habits to use more electricity during the day when your system is generating power.
  • Consider Battery Storage: Evaluate if investing in a battery system makes sense for your situation and objectives.
  • Stay Informed: Keep up-to-date with any changes in policies, rates, or technologies.
  • Consult Professionals: We’re here to help. Reach out to us at Current Generation for personalised advice and solutions tailored to your needs.

By taking these steps, you not only enhance the return on your investment but also play a part in creating a sustainable, secure energy future for all of New Zealand.