Considering installing solar energy?
Unison has been researching and trialling solar technology for a number of years now, and we’ve learnt a lot from this work. The advice we provide is based on what we have learnt, and we want to share this so you can make an informed decision about solar energy (also known as solar photovoltaic, or solar distributed generation).
We’ll also explain how solar energy works, and some of the things you should consider when making the decision to invest.
Get a balanced view
While seeing the drop in your power bill sounds very appealing, installing solar energy is a significant investment, and calculating the long-term benefit requires consideration of a number of factors, including how you use electricity now, what changes in use you will see in the near future (a new EV?), how long you will remain in your house, and the cost of financing your purchase. New Zealand is already a very ‘green’ electricity producer, with close to 85% of delivered electricity coming from renewable sources. Before making the commitment to purchase, check out advice from New Zealand-based, independent sources, such as Consumer, and Energywise (EECA).
The fast facts
Here is a quick overview of the things you should consider when thinking about installing solar energy.
The solar energy system you choose should be sized to supply your day-time loads. Installing an 'over-sized' system doesn't mean greater cost savings, as the low electricity buy back rates, how much you get for selling excess generation, don’t give a return on the additional cost of installing a larger system.
To get the most from your system, the orientation of your roof is important – north facing roofs, or flat roofs with panels angle-mounted on frames give the best yield from solar photovoltaic (PV) panels.
It's important to choose an experienced installer who can advise on the right system, and any promised savings should be carefully checked.
As mentioned, when calculating the financial benefit, there are a number of factors to consider, including the cost of financing your purchase of the equipment, installation costs, buy back rates and your usage patterns and potential. Be wary of relying solely on a solar provider’s online calculator, as they may not incorporate all the factors that should be included, thus over-estimating the financial return on investment.
Solar energy will not supply all your electricity needs, especially during peak demand periods in the winter mornings and evenings, when there is little or no sunshine.
There are energy management tools that can move electricity consumption to coincide with maximum solar output – for example hot water cylinder timer delays, or delayed start options on appliances.
Consider the length of time you expect to be in your home. Solar is a long-term investment which is important to think about in the context of the average amount of time New Zealanders spend in a house - which is six years. This is particularly important when considering a long-term solar lease, which may require you to pay it off if you need to terminate your contract earlier than expected.
Lines companies in New Zealand are regulated which limits the amount that they can charge. Part of your power bill will include the charges from Unison, some are fixed daily charges and some are based on how much energy you source from the grid. Controls on the maximum fixed charge are being removed and it is likely that the part of your bill based on the daily rate will increase while that based on how much you use will decrease. For most people this will not result in much change, for those with solar generation they will pay a more similar amount as those who don’t.
Battery storage can further optimise the use of solar generation, as well as provide back-up power during an outage, but these remain an expensive option. Another advantage of battery storage can be to shift your energy use from the grid to times when the cost of energy is low. This is a complex calculation and should be investigated well before factoring in these savings too strongly to your investment decision.
Why do people choose solar?
Nearly 85% of New Zealand’s energy is produced from renewable sources such as hydro, geothermal and wind, and typically we do not have a shortage of electricity. This is predicted to change as there is an increased movement towards electricity by large industry. To cater for this predicted increase a number of large scale solar and wind generation is planned in the near future. So the question is, why do people choose to invest in solar energy systems?
In the early years, cost was so prohibitive that for many, it was simply not an economic choice, and so their reasons were more likely to relate to the environment, the desire to be self-sufficient, or to protect themselves from future electricity price increases. Through our research, we have gained a greater understanding of the extent to which solar achieves these goals, as they relate to New Zealand’s own environment and electricity industry. If these are key motivations for you, be sure to check out our findings.
Saving money on electricity is also an obvious reason and, as technology becomes cheaper and more readily available, perceived cost savings are increasingly becoming one of the major motivations.