New Zealand passes solar tipping point

New Zealand has passed the "tipping point" where most people buying solar panels will save more money than they spend on them, researchers say, but more could be done to unlock households' ability to make use of solar power.

Josh Ellison, research lead for Rewiring Aotearoa, said the country was one of the first where the electrification of homes and vehicles could deliver cost-of-living savings and reductions in emissions at the same time.

He said the tipping point was probably passed about three years ago but has now been crossed for battery storage systems, too.

It was helped by solar installation costs reducing and power prices increasing.

"It does depend on how much electricity the household consumers.

"A household consuming a lot of electricity, and especially a lot of electricity during the daytime - a household working from home for example, will be likely to save more...

"There will likely still be some households in more shady areas that are rarely using any electricity during the day where it might be harder to stack up. Although with today's solar prices I would say that probably even those households might stack up."

He said even houses that were not facing north now found solar paid off.

"Not every home will be in the sunshine but most New Zealand homes will. And for the average sunlight in New Zealand on a household, buying a solar system, including making the repayments for the system at the moment will save about $1000 per year net or create about $1000 of profit per year. And so, we're now at that point where if households were able to finance solar in the same way that energy companies are allowed to build their assets and put it onto consumer bills, then most homes in New Zealand could have $1000 a year lower bills today."

He said energy companies installing poles and wires could finance them over 50 years.

"They get to amortise that asset cost and then apply it to your bill and increase your bill based on the cost of the asset. If you were allowed to do the same thing with solar today, it would create about $1000 a year in net savings."

He said it was cheaper to put solar on houses than build solar farms but only about 20 percent of households had access to green loans from banks to do so, because they often require sufficient equity in a house and for the homeowner to have an active mortgage.

Just under 84,000 customers now have solar power, up from 20,000 in 2018.

The largest number by zone are in the upper North Island, followed by the central North Island and then the upper South Island.

Ellison said even areas like Dunedin and Stewart Island were past the tipping point.

"They are a lot lower than the average in New Zealand, central Otago has some of the highest generation.... but the difference is actually not that large. We see similar savings across the country."

Tim Sparks, Electricity Authority general manager of networks and systems change said there were a number of changes in progress that could boost household returns from solar power.

"We're interested in enabling new technologies and we're updating a bunch of industry rules so we can make better use of rooftop solar generation that's being generated in communities."

From next week, lines companies will be required to have a default export limit for people putting power back into the network of 10 kilowatts.

"That means people can basically put more solar power into the network than they could before.

"A lot of lines companies in the past have had much lower limits down at five kilowatts. And so, in some cases people were pushing up against that limit."

He said the authority was also requiring distributors to pay rebates when power was supplied by household and small business customers in peak times.

That took effect on April 1, although electricity retailers reported different plans for how that would be handled.

Sparks said retailers would have different strategies but it was expected that they would use the rebates to compete.

He said the authority was also looking at ways to make the application process easier for people investing in solar panels. It is also reviewing rules around plug-in solar.

In some other countries "balcony solar", where panels are plugged in and sit on an apartment balcony, for example, can be a popular solution.

"It's big in Germany and it's especially useful for people who rent or have an apartment. So, we're looking at what rules might need to be changed or updated to enable plug-in solar here."

Powerswitch general manager Paul Fuge said the economics of solar would usually stack up well if a house got good sun.

He said a recent survey showed 48 percent of households said they had considered installing solar. That was up from 42 percent in 2022.

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