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In Newsroom, incoming Meridian CEO Mike Roan questions the economic viability of rooftop solar. Here's Rewiring Aotearoa CEO Mike Casey's full response.
We’re pro-grid at Rewiring Aotearoa and we want as many New Zealanders to swap fossil fuels for renewable electricity to run their electric machines, so we will definitely need more large-scale generation and we will need that to be affordable, but I think Mike Roan missed out a couple of words: rooftop solar is not economically viable for him and his company.
If he believes rooftop solar is not economically viable then he is flat out wrong, plain and simple. We would expect a better grasp of energy economics for someone who is the CEO of an electricity company, and frankly we would expect him to be less out of touch with the energy bill realities of his customers. We would be happy to have an open, transparent and data backed debate with him and his team.
There are no profit margins between a solar panel and the fridge and he is basically an electricity landlord trying to keep people paying the rent, so we can understand why he would say this, but we’re an independent organisation and our Electric Homes and Delivered Cost of Energy research has clearly shown that rooftop solar is the cheapest form of delivered electricity available to New Zealand households - and running on the sun certainly makes more economic sense than suggesting customers have shorter showers.
Even if Meridian was generous enough to give everyone free electricity, it would still not be as cheap as solar on your own roof because getting electricity to where it needs to go makes up around half of the cost to customers and what customers actually pay isn’t always taken into consideration by gentailers. They don’t just pay for generation and they don’t pay wholesale prices. They pay retail. And they generally invest in solar to avoid those retail prices, not to sell at wholesale prices.
The average cost per unit of electricity in New Zealand is around 30c (and rising each year) and you can add solar to your mortgage and pay around 13c (or around 7c without a loan). The average wholesale price is around 17c, so saying rooftop solar is not economically viable is utter insanity. He’s a product of his environment and he has presumably been trained to think that big things are the only solution but not only is rooftop solar already cheaper, it will last about 20 to 30 years, and it won't increase its prices on you, which is more than we can say for the price on the grid.
For more testament to that it’s not about wholesale pricing, Australia has about 40% of its homes with rooftop solar, and while wholesale prices are often zero dollars in the middle of the day, households in Australia are still buying solar en masse, with some communities with 70% solar already. It’s a great space to be in where prices are so cheap in the middle of the day that even apartments and renters can benefit when they don’t have their own panels. Industry can benefit too.
There's plenty of nuance here. The sun doesn't always shine and it's better if homes stay on grid and share their energy. We would also be happy to explore all this nuance with Mr Roan, but the nuance doesn't change the reality that rooftop solar delivers energy to homes cheaper than he does.
The price of solar panels and batteries has plummeted and it’s never been cheaper to generate and store electricity. At the same time, customers’ electricity bills are going up at above the rate of inflation. We would argue that’s the thing that isn’t economically viable and that’s why many of these big gentailers are losing their social license. Something doesn’t quite add up.
Just like the internet was seen as a threat to the phone companies, rooftop solar is seen as a threat to the electricity companies, but some innovative retailers are looking at distributed technology as a business opportunity rather than a threat. They can see the clear economic trend and adoption rates and they’re trying to figure out how to embrace it.
If the banks got their act together and developed some adequate long-term finance offers for solar, they could actually become the biggest competition to the gentailers. Things are starting to happen in this space and the Government’s recent packages for farms and households are a clear signal that it is starting to get behind this technology, so we’re expecting an increase in adoption rates here as well.
Financial commentator Frances Cook uses her own story to show that that an investment in solar and an EV significantly outperforms the stock market and fellow number cruncher Nadine Higgins says that if you do it right, EVs are cheaper to run and own; EV sales have climbed to their highest level since 2022 and are closing in on 2023's numbers and Go Rentals has just invested $2.3 million in some new Tesla Model Y Premiums; the gap between energy costs of diesel vans and utes and electric vans and utes is absolutely massive; solar is also going off right now, with one installer in Otago 448% above their sales target in March; Lightforce has gone back to the Barretts with a new TV ad; Wellington mayor Andrew Little explains its electrification strategy and Hutt City Council shares data showing how its fleet has gone from dirty Toyotas to cleaner EVs; Shenzen in China has electrified its public transport and taxis and that's come with big benefits - and some challenges; and a very simple illustration of the LNG terminal.
Read moreDownloadAs Minister of energy, climate and local government, Simon Watts had a great opportunity to push the country towards cheaper, cleaner and more reliable New Zealand-made energy. And that’s why we laid down a challenge and gave him the ‘MegaWatts’ moniker last year. Rewiring Aotearoa CEO Mike Casey says he did some good things, like enabling more solar on farms, removing tax on solar exports, fixing onerous solar consenting requirements, putting pressure on the lines companies to pull up their socks, and getting the ball rolling on the Ratepayer Assistance Scheme. "But the LNG import terminal appears to have been a defining issue."
Read moreDownloadAfter ‘crunching the numbers’ and adding in new sources of ‘New Zealand-made energy’ to our equations, CEO Mike Casey has announced that Rewiring Aotearoa will be changing its name to Refuelling Aotearoa. There has been a huge amount of independently verified research showing electrification beats fossil fuels on economics, efficiency, emissions and energy security and that there is a huge opportunity for New Zealand to electrify, but the discovery of an infinite supply of snake oil in New Zealand has changed everything, he says.
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