On one sparkling summer's day in Germany last year, solar systems on the roofs of private homes generated over 50% of the nation's electricity. Blessed with far more sun than our northern hemisphere cousins, New Zealand's potential for micro-generation is huge.
Micro-generation is the generation of electricity from a small-scale system. Generating electricity onsite or at the point of use, micro-generation technologies are connected to the electricity network, where it is termed distributed generation or DG. Think of electricity being generated and used where it is required, instead of being shipped around the country.
The most common form is solar photovoltaics (PV). Used when required, and supplemented by grid-supplied power, it helps alleviate those ever-increasing power bills, facilitates energy efficiency measures and you can even get paid by a power retailer for the excess power you generate by feeding it back into the grid.
There are other micro-generation technologies which include small wind turbines, and mini hydro turbines, which are dependent on the application and environment. So how did Germany get solar systems to contribute half its power in one day?
As with most new industries that can benefit the people, the local economy and the government, a government-led incentive program using feed-in tariffs (FIT) was implemented. A FIT is a payment at a fixed rate for every kWh exported from a solar system into the grid for a period of 15 to 20 years. Governments legislate for all power retailers to pay the amount for the mandated agreement term. Germany enacted this to mitigate their reliance on other forms of centralised power generation and dependence on oil and gas from other countries.
For 20 odd years the solar revolution exploded in Germany because the retired couple, the family down the road and the business owner who invested in a solar system on their roof was assured of a return on their investment. Germany generated around 6.6 GW in 2012, developed energy efficiency measures along the way and created employment for 370,000 people. It also brought about an export market that is one of the envies of the renewable energy game globally. As the price of solar technology dropped, so did the FIT rate as it had served its purpose.
Used as the global benchmark, over 50 OECD countries in Europe, the Americas and Asia followed Germany's lead and benefitted. The German example proved it could be done; the country's electricity infrastructure managed the loads both locally and nationally of tens of thousands of micro-generators rather than a number of large generators, and the country did not fall over because of intermittent supply.
Japan, which took the decision to close not just Fukushima, but 54 other nuclear power stations after the 2011 tsunami, effectively switched off 30% of its power generation. The fourth largest energy consumer on the planet was seriously running out of power. Japan tried to fill the shortfall by importing huge amounts of liquid petroleum gas (LPG). By late 2011 it was burning an extra 400,000 barrels of fuel every day. This cost US$100m plus a day and contributed to Japan's worst-ever trade deficit in 2011.
Japan was dependent on oil, coal and gas for 90 per cent of its power in 2011 so, not surprisingly, they moved to implement renewable energy technologies - solar, wind and wave - to replace the non-renewable sources. The Japanese Government is offering a feed-in tariff of 38 yen (about 60 cents) per kWh - twice as much as consumers in Japan pay for grid-supplied electricity.
The growth of solar power in Japan has already been exponential. Take the bullet train from Osaka to Tokyo to Hiroshima as I have and witness the expanse of building-integrated solar tiles on old and new homes and industrial buildings as well as the building-integrated solar glass facades and roofs on newly built public and municipal buildings and train stations. It's a step up from Germany because the systems are integrated into the buildings and environment and are aesthetically pleasing.
It goes without saying that the solar industry is flourishing, with thousands of new jobs created. A major component of these systems in Japan now is storage. Locally made lithium-ion battery storage technology, where the battery can store the electricity produced by the PV system, as well as power from the grid purchased at the lowest time of use cost, is popular.
When the sun goes down, electricity is drawn from the charged-up battery and any stored excess power is sold back to the grid at the higher tariff rate.Termed 'Home Energy Management Systems' (HEMS) it's an elegant technological and financial solution for the consumer meeting other stake-holders' obvious goals. A Tokyo-based utility leads the way along with major PV manufacturers.
Japan is in the top four countries manufacturing solar systems, but also has the third largest solar capacity in the world (behind Germany and Spain), with most of it connected to the grid. International solar module manufacturers have set up shop with production facilities around Osaka, to take first mover advantage of solar demand. Of course this is an already established investment in Japan with substantial money involved, let alone more jobs and the natural flow of contributing to the local economy.
There are lessons for New Zealand here, not least the diversification of our modes of power. A huge advantage is, of course, not having to move power around the country from point of generation to the point of use - the cost of which in New Zealand makes up around 38% of our power bills. With a budget provision of $4.6bn over 10 years to be spent on shoring up the country's grid infrastructure to reliably move more power from South to North and vice versa, part of this could be used as a provision to encourage not only solar, but other types of local generation take-up.
Factor in the realities that over 30% of New Zealand's population live in its largest city and that around 40% of business is transacted out of that same city, it makes little sense that here is that city reliant on the major supply of its electricity being moved from the South.
The potential issues are reflected by that New Zealand episode in the mid 1990s where, when you walked around the CBD of Auckland, you saw all those costly diesel generators in play to keep businesses operating. Of course there was soon a shortage of diesel generators which necessitated searching the country for spares. Then some businesses folded because they couldn't operate. There was a process of recourse, but it didn't make up for those that closed their doors or lost income and suffered accordingly. Interesting that that this episode in New Zealand is used as an example world-wide of what happens in a first-world country when the power goes out for over a month without a plan B.
Auckland Council's aspirational plan to generate power locally using wind, solar, and other technologies shows commitment and has legs. Now it needs more shape and refining to progress it along. Other examples in New Zealand of assisting development of solar and other micro-generation technologies as experienced in Japan include simplifying land use application for solar projects, bypassing resource management hurdles that might otherwise deter investors, providing tax incentives for consumers, and removing any building consents and associated costs at local authority level.
NZ's solar advantage
The total amount of solar energy falling on the roof of the average Auckland home in one year is 242,372 kWh, yet the average home consumes just 8000 in kWh - just one thirtieth that amount. New Zealand is blessed with abundant sunshine hours - more than Germany and other European countries.
The cost of solar technology and systems has reduced well over 50% in the last three years to the point where it is not only a feasible and practical solution but a sure-fire investment for consumers and commercial business. In Auckland there are many examples of solar PV houses and buildings; the newly built 'Zero Energy' house in Point Chevalier which is powered entirely by solar tiles; a retrofit property in Devonport with a 4 kW solar system; another 'Zero Energy' house north of Auckland which uses building-integrated solar laminates and the Airport terminal, partially powered by a 40 kW solar system.
Touching up the roof of the Zero Energy House in Auckland's Point Chevalier.
When your PV system generates more electricity than you consume, the excess electricity can flow into the distributor's network, and you sell your excess power to your retailer. Although electricity from a PV system works out at less than 11 cents per unit (dependent on technology, location, size) over the system life, this is currently a third of the current retail price for electricity, if you buy it off the grid as most do.
An interesting effect and huge benefit of generating your own power is the awareness of electricity consumption that it brings. This is exactly what Auckland business Alphatron Pacific experienced when it installed a solar system on its offices in Albany. "Employees will switch off equipment when not in use and switch laptop, monitors and phone chargers off at the wall at the end of the day, all because it has become a goal that our solar system provides sufficient energy to cover our consumption," says managing director Jeroen Brand.
"This kind of behavioural change is hard to achieve by just telling people what they must do or running a bunch of media adverts. Saving energy is just not that exciting. It is the thrill of generating your own power and managing it, that makes it happen," he says.
Similarly New Zealand solar electricity company Powersmart has received extremely positive feedback from clients. Says managing director Mike Bassett-Smith: "New Zealand doesn't needs subsidies to make solar power systems viable investments. Under Meridian's new and committed agreement our residential customers are generating simple ROI's of 10% per annum. Factor in an increase in property value and these returns are more than worthwhile now. Commercial investors can benefit from scale pricing on larger systems and tax advantages that come with depreciation. Solar is here to stay in NZ and is fundamentally sound."
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Brendan Winitana is an independent director and chairman of SEANZ - the Sustainable Electricity Association of New Zealand. SEANZ is the governing body which brings together all stakeholders including lines companies, retailers, technology and equipment suppliers, designers, installers, system integrators of distributed generation systems and end users of the technologies. A good place to start when planning to become a small generator is the SEANZ business directory at seanz.org.nz/Directory