About 3 percent of New Zealand homes currently have solar connections. File photo. Photo: lighthunter/123RF
It takes just five to eight years for a typical solar power system to pay for itself on a New Zealand home, experts say.
But people who are high power users, or who work from home during the day could potentially benefit faster.
Solar power has been in the news over the past week, due to the collapse of SolarZero.
SolarZero allowed people to install systems on their homes with no upfront costs, on a lease basis.
Although SolarZero is no longer accepting new customers, there are a number of providers of systems that can be bought outright by homeowners.
RNZ has looked at whether that pays off.
How many homes have solar power systems?
About 3 percent of New Zealand homes have solar connections but Consumer NZ head of Powerswitch Paul Fuge said the country had the same solar potential as Victoria, Australia, where 25 percent of residential properties have solar systems installed.
He said he expected uptake to accelerate quickly now that the systems are cheaper to install.
A system that might have cost $11,000 in 2013 would now only cost about $6000.
What's the cost vs return?
Fuge said while every home was different, and there could be differences between regions, installing solar would cost about $2000 per kilowatt.
A typical system might be 4kW or 5kW, so would cost about $10,000.
He said while a unit of electricity from the grid would cost on average 35c, it would be just 11c for people drawing power from rooftop solar, or about 6c for those who did not have to finance the solar installation.
Fuge said that meant the average system would take about five to seven years to pay for itself and would provide a 10-15 percent return on investment, which was likely to improve as power prices rose.
He said the sector was at a tipping point because the cost had come down quite rapidly and power was so much cheaper when sourced from a solar power system. "It's a real no brainer. At the start of my career it was the other way around… now it just makes such financial sense to do it."
People with electric vehicles or who had high power usage would get the payback faster.
"You can power your electric car for [the equivalent of] 31c a litre with rooftop solar and 64c a litre with electricity delivered from the grid."
Selling to the grid
Most systems feed power that is not used as it is generated back to the grid, which retailers pay for.
Fuge said the rates that power companies offered could vary a lot, from about 8c to 17c per kW.
Lightforce Solar managing director John Harman told Nine to Noon even better compensation could be appropriate.
Fuge said the main hurdle for most people was that they needed to have money in the bank to pay for the system or access to the funds.
"That will exacerbate energy hardship because people with means who can afford it are effectively hedging with cheaper electricity price sand people who can't, pay higher prices."
He said as battery technology improved people could balance storing and selling power so that they were selling power to the grid at the time it was most needed, and the prices paid for it were higher.
Gareth Gretton, at the Energy Efficiency and Conservation Authority, agreed the cost of installing solar power had decreased a lot in recent years.
He said the payback would be faster for households that could use most of the electricity they generated. That would be scenarios where devices used the electricity during the day or people were at home. "Water cylinders are a really obvious one, they use a fair bit of energy. Then if you have electric vehicles as well, if you're able to get a decent amount of charging during the day that can help too.:"
Gretton said people would have to very actively manage their power use to get to a zero power bill.
"Some people are taking quite a holistic view that we need more electricity in the country, more renewable electricity and they are putting in slightly larger systems and accepting they will be exporting a lot of that and getting a decent return on investment. I'm not saying it's going to be the highest return on investment you can find in any place but it's decent and you're doing something good."
He said a lot of banks were offering cheaper loans to people wanting to install things such as solar systems, which could help.
Gretton said eight years was a realistic timeframe for a system to pay for itself in savings.
The houses that generated the most power tended to be those where the panels could be positioned on the roof in a general northerly direction with minimal shading.
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