Your solar pricing questions answered
The installation of a form of electricity generation to your home or business is an option being considered by an increasing number of customers. The most common generation type are solar panels. Generating your own electricity from the sun seems like a win-win in terms of reducing your individual power bill and also helping to reduce the dependence on large scale national generation sources such as Hydro dams and the use of gas and coal powered generators.
What you need to know when considering this option is: (Can we answer these questions also, maybe in the fast facts page and we can link to?)
- What monthly savings will you see?
- What future changes are likely to impact this?
- Will your actions improve NZ’s overall carbon footprint?
- How long before your investment pays for itself?
- Will the installation of a battery along with panels allow you to disconnect from the grid?
If you are thinking of putting solar panels on the roof of your house, or if you already have, it will be useful to know how Unison charges you for connection to our network.
Unison provides the lines and infrastructure that deliver electricity to your house from where it was generated. This may be from hydro dams, geothermal, wind power or occasionally gas fired generators. Unison charges households a fixed daily rate and also on the amount of energy you use at different times of the day. The exact level of charges can be found on our website, and these charges are passed through to your retailer who will include them in their overall charges ending up with the amount you see on your monthly power bill.
While there will be some savings to be made on Unison’s charges the main savings you will gain from installation of generation will be in the amount of energy you will need to buy from the grid. You will be able to supply yourself with energy when your generation is operating, with solar panels this will be limited to when sufficient sun is shining, this energy you supply yourself will not need to be purchased from your retailer.
Even with a large number of panels on your roof and with a battery to store excess energy, it is unlikely that enough energy will be generated to be able to supply you 100% of the time. It is very unusual that a generation system will allow you to disconnect from the electricity network that Unison provides. The highest periods of use in most households are the hours around breakfast on cold winter mornings and in those same evenings around 5pm to 8pm. Unfortunately, these are also the times when solar panels will be delivering little or no energy.
There are current regulations that are in the process of change regarding the amount that distributors (Unison) and Retailers can charge for daily fixed charges. These regulations are being revised, and eventually removed, so that charges can cater more reasonably to the services that different parts of the industry deliver. If you use a relatively low amount of energy during the year, less than 8,000 kWh, the maximum you can be charged for fixed charges is currently 60c per day. From April 2023 this will increase to 90c per day. When the daily charges increase the rates based on how much energy you use will reduce to maintain, on average, the same annual charge. In practice those consumers who use very low amounts of energy will end up paying a bit more while those who use more will pay a bit less. The importance for solar installations is that your savings will not be quite as strong as fixed prices increase as they would have been. You should definitely factor this into your investment decision when you are considering installing any local generation.
Another factor that should be taken into consideration is that in many cases Unison, and possibly your retailer, charge different rates for consumption at different times of the day. The size of the network is determined by how much energy is transported at the busiest time of the day. The busiest times are morning and evening when cooking, heating and hot water are being used the most. As a result, the rates for using energy at these times is higher than during late morning and afternoon. Usage of the network during late night and early morning is very low and so the rates charged at those times are lower still.
For more accurate calculations of the changes in rates please contact us and we can discuss your personal situation. Different households have very diverse consumption patterns so there is no easy one-size-fits-all solution
What is unison doing to help customers who are thinking of going solar or using other energy efficient technologies?
Unison has always promoted energy choice and incentives for people to reduce their carbon footprints, provided they’re fair to everyone. We want to help our customers to embrace new technologies and be energy efficient and we are committed to providing good information on the real costs and benefits of different technologies, practical tools and meaningful incentives to help people make good energy choices.
This is why we have trialled a range of technologies, including solar and in-home batteries, to understand the network impacts and to provide a full picture for customers considering them.
Customers can also find out more by visiting the pages in this section of our site to find out what we have been doing in the solar energy space.
Why does unison need different price categories?
Unison has a number of different price categories to reflect the fact some customers use energy in different ways to the average customer – (for example at different times of the day/year and different total consumption).
This allows fairer cost sharing among customers. Unison has a category for holiday homes that use less energy but have the same size of connection, Unison also have categories for connections that are a similar size to houses but have different requirements. These non-residential categories mean Unison can price housing more accurately and, for example, can reflect the true savings from having some control over hot water heating.
Why doesn’t unison charge network costs in a different way?
The limitations of the laws around how we charge our customers mean we are very constrained in the way we can charge customers for the costs on the lines network.
This is why we would like to see law changes that allow us more flexibility to set prices that better reflect changing electricity demand and technology so we’d no longer need a separate price category for solar customers, and we could do more to reward customers for energy efficient behaviour such as such as using less electricity at peak times.
Smart metering systems also need to be improved to make these smarter prices available for customers.
We are committed to getting a better long-term deal for all our customers and will be talking to the government, electricity retailers and consumer groups about the law changes and system improvements needed to allow this to happen.
Where can I find what fixed user costs unison charge me?
We have seen solar grow rapidly over the last two years, and we have worked hard with customers and solar installers to make it easy to connect to the network. We also recognise that solar is a significant investment for customers and we want to support customers with this investment decision by ensuring they understand the true ongoing cost of being connected to the network.
Our solar price category reflects this true cost and our solar investment calculator has been developed to assist customers before they decide to invest.
We want to avoid a similar situation to Australia where huge numbers of solar customers have been negatively impacted by the withdrawal of subsidies for solar. Longer term, increasing numbers of solar customers will mean non-solar customers will have to pay more in network costs to subsidise solar customers which we do not think is fair.