• Read the full piece here

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.

‍