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An indepth study by EECA that aimed to show "where and under what conditions does investing in solar PV make sense?” has shown that rooftop solar "is likely to be financially viable for a significant proportion of New Zealand households, particularly for those who consume a lot of energy".
As the report outlined:
Households that consume more electricity, particularly in the morning and daytime, see the best financial returns from solar PV.The more appliances that are powered by electricity, the more self-generated solar energy can be used directly, reducing reliance on grid electricity.
While waste should always be avoided, more household consumption means a greater opportunity to replace grid electricity with self-generated solar energy. Homes that use more power during the morning (7-11am) and daytime benefit the most since solar generates electricity during these hours.
Households that switch from gas to electric heating, cooking, and water heating will benefit more from solar PV. Charging an electric vehicle (EV) at home during the day can significantly increase solar self-consumption.
This graph shows the average modelled reduction in demand from solar PV, including exports, during peak periods (7-11am and 5-9pm) by month of the year for households in Christchurch with typical demand profiles (assuming a 10 kW-ac PV system and 10 kWh battery). Note that time-of-use buyback prices produce a greater peak period demand reduction year-round than flat buyback prices, although slightly less benefit is seen during winter months. Very little peak period demand reduction is seen from May to July without a battery.
Location matters
Financial returns vary across cities, depending on electricity prices in each area and a solar resource which depends on the local climate. Results show that, in contrast to common assumptions, southern locations in New Zealand are not necessarily worse for solar PV.
This research modelled solar PV system operation using real-world 30-minute demand data from almost 50,000 homes across 4 New Zealand cities for a full year:
Queenstown
Auckland
Christchurch
Wellington
For all of the above, the appropriate storage solutions can boost IRR by 1-2%. However, this additional benefit is sensitive to pricing structures, storage technology costs, and the households’ particular usage profile.
Time-of-use pricing can further improve returns if a battery is included in the installation.
North-facing panels with a tilt of 30° or more are best. East- and west-facing panels don’t meaningfully improve generation during peak periods in New Zealand.
Most solar PV panels in New Zealand are installed facing as close to north as possible to maximise total electricity generation. However, some homeowners choose to install east- and west-facing arrays to try and match their solar generation and energy use more closely.
Here’s how they compare:
North-facing panels (typical setup)
East-west-facing panels
East- and west-facing solar arrays do not significantly improve the ability of solar PV to reduce peak electricity demand in winter. Even in northern regions, solar generation remains too low in the early mornings and late evenings to make a meaningful difference during peak demand periods.
Batteries are the only real solution that will allow peak morning and evening demand to be met with local supply, but they need to fall further in price.
Batteries can increase the financial benefits from solar PV but remain too expensive for many households in New Zealand.
Instead of batteries, hot water diverters and timers can improve returns with lower upfront costs by making use of existing hot water cylinders to store solar energy.
EV batteries could also be used for storage, with Vehicle-to-Grid (V2G) technology, but key challenges remain, such as V2G charger costs and limitations imposed by battery warranties from some vehicle manufacturers.
Households have a variety of options available to improve the value of solar PV to them.
For example, one of the easiest things to do with a large impact on financial return is to shop around solar installers to find the best deal, then checking offered components online to make sure they are reliable and sourced from reputable manufacturers.
A close second is ensuring you are on the best available electricity retail plan considering the solar system you plan to install.
Storage is an option which can boost overall returns from solar PV, but the right choice of capacity and technology will depend on component costs, your location, electricity plan, and consumption profile, and even how much control you have over energy-consuming devices in your home.
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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