Selling your solar power

By Adam Gifford

Two of the large electricity retailers are coming to the party when it comes to buying the excess power from your photo voltaic solar system.

Solar panels can generate profit as well as electricity. Photo / Getty Images
Solar panels can generate profit as well as electricity. Photo / Getty Images

Energy: When you get your brand new array of photo voltaic solar panels on the roof, you have one of two options: invest in a battery storage system, or connect to the national grid and sell your power back to the retailers. But which electricity companies are the most solar friendly?

The price of photovoltaic solar systems has dropped like a stone, but what would seal the deal for many households is knowing that they can sell any surplus power generated back into the grid.

While other countries have mandated feed-in tariffs as a way to encourage take-up of renewable power, in New Zealand it's up to the companies what they want to pay you.

Contact and Meridian Energy currently offer the best buy-back rates.

Contact will pay 17.285 cents per kWh (excluding GST) to residential and small-to-medium enterprise customers who have distributed generation systems including solar with peak load of less than 10 kilowatts. Systems above 10kW come under a wholesale supply agreement on a case-by-case basis.

Contact spokesperson Rachel Day said the company has several hundred customers around New Zealand who generate their own electricity via solar power, and it expects the numbers to increase.

That will mean energy retailers and network providers will need to change.

"We are watching the Australian, European and Californian markets carefully as they are further down this track and we can take valuable insights from their experience and apply them to the New Zealand market," she said.

Meridian offers 25 cents per kWh for the first 5kWh of excess energy each day, and 10 cents per kWh for anything above that. It charged $85 to install an import-export meter. It is seeing about 50 new installations a month.

Media manager Michelle Brooker said customers should see the value in having 'self-generation' as being about reducing energy consumption costs rather than as making money from exporting to the grid. "This means sizing the solar PV system to primarily meet the needs of the household," she said.

Both Meridian and Contact have 30-day notification periods after which they can adjust their buy-back rates.

Meridian also offers a Solar Shed package for farmers, with loan funding available through Westpac. The feed-in rates are the same, although the company reserves the option to individually price large solar PV schemes.

Brooker said the number of farmers taking up the scheme are confidential, although both Westpac and Meridian are pleased with the level of interest.

The other retailers like Genesis, Mercury, Nova and Trustpower offer about 7 cents or less, and aren't seen as being supportive.

Rogier Simon, the general manager of Tauranga-based solar electricity specialist PowerSmart, said mandated pricing would be of great benefit to the sector.

He said generators and lines companies have different perspectives on distributed generation systems, depending on the nature of their business. Some lines companies support customers at the edge of their network generating some of their own power, because it can cost them more to supply power from the grid than they can charge for it.

Having the right retailer and lines company can make a big difference for business installations. "When projects are large scale they can charge fees to do things like on-site audits. If they are pro-solar they will help you. If not, they can sting you for tens of thousands of dollars."

He said the number of installations is growing between 30 to 40 per cent year on year.

Last month PowerSmart completed a 99 kW system for Marlborough winegrower Yealands, which will produce about 130,000 kWh of power a year. It's about to start a 100 kW system for Palmerston North City Council, which will deliver about 10 per cent of the power needed by the council's administration building and conference centre.

What can the banks offer?

Banks are starting to buy into the vision. KiwiBank offers "sustainable energy loans" that allow homeowners to pay for a solar, wind, small-scale hydro or geothermal power system as part of their home loan. The bank contributes $2000 over four years towards the cost.

Westpac has teamed up with Meridian Energy for Solar Shed, offering 100 per cent finance for dairy farmers for a 10 kW system, repaid over three years.

How long will it take for solar to pay back?

In a recent Herald article Solar City CEO Andy Booth said an average install - a 2.5 kilowatt system, which would meet about a quarter of a household's energy use - costs about $6500. He said a system, which has a warranty for 25 years, typically paid for itself in about 10 to 12 years.

Can new legislation help?

Late last year Green Party energy spokesperson Gareth Hughes released a draft bill that would require the Electricity Authority to set up a fair and simple power purchase agreement with those who want to feed in surplus electricity that they generate. "We will make is easy for people to sell their surplus electricity, from solar panels for example, on their roof," Hughes said.

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