Make your own electricity

By Gary Farrow

Another year, another round of power price rises. Kiwis are signing up for solar power in significant numbers and taking the power back.

On average, Auckland has 5.5 hours of full solar electricity production per day. Photo / Getty Images
On average, Auckland has 5.5 hours of full solar electricity production per day. Photo / Getty Images

It's humbling to look up at our sun and consider what an incredible source of power is right above our heads.

According to NIWA, about 1.3 kilowatts of energy reaches each square metre of the Earth's surface in daylight hours when the weather is clear.

New Zealand is currently making use of only a tiny fraction of that energy. However, solar installations are becoming an increasingly appropriate option for the country due to dropping photovoltaic solar panel prices and power prices having jumped by 22 per cent since 2008.

Solar photovoltaic installations enable consumers to generate their own power and save on energy bills - and it's only getting easier for them to make the switch.

"Industry capability has taken off, with more solar system integrators and installers coming on-stream every month," says Brendan Winitana, chairperson of the Solar Electricity Association of New Zealand.

Nigel Morris of Solar Business Services has spent almost 20 years working for solar companies in Australia, and played a significant part in the country's successful embrace of solar power. "Solar has evolved to the point where today, a solar system in Australia can generate power for a household for less than they can buy it - it's as simple as that," he says.

Solar has also proven its worth in larger countries including the United States, Japan and Germany - some of the world's leading consumers of energy. Nearly eight per cent of the electricity in Germany comes from the sun. The aim is to achieve more than 40 per cent in 2035.

Morris says solar energy would work for New Zealand, possibly even more than for other countries, because we can take from the experience overseas and determine what approaches we should and shouldn't take.

"New Zealand is really in a position where it's able to generate low-cost energy and allow consumers to benefit - and, if it's done intelligently, for utilities and government to benefit as well," he says.

"The growth of solar is inevitable," he adds. "It's another year, another round of power price rises. Kiwis are signing up for solar power in significant numbers and taking the power back. Not a question of if- it's simply a question of when."

One of the unexpected, but significant benefits of installing a solar power system is that most people suddenly take a much greater interest in their power usage, assessing the efficiency of each appliance, the cost of their hot water etc.

Having a greater understanding of how efficiently they are using electricity invariably leads to a behavioural change, and further reductions in the power bill.

Myth buster: Solar doesn't pay

It's easy to calculate the return on investment (ROI) from a solar panel system.

Step 1: Figure out how much your power company charges you for electricity - this is usually between $0.25 and $0.27 per kilowatt hour.

Step 2: Ask your solar provider how many kilowatt hours your system will generate in a year. Multiply this by the cost of your power to figure out your savings per year. For example, if you were to install a 3kW system, the system will produce on average between 4 and 4.5kWh per day for every kW of PV panel installed.

NIWA figures show that on average Auckland has 5.5 hours of full solar production per day. A 3kW system is expected to produce between 12 and 13.5kWh per day on average which is up to 4927.5kWh per year.

The current average unit price charged by most power companies is $0.25c per kWh so a 3 kW system should save you up to $1231 per year through self consumption and not having to purchase this power from your power company (4927.5kWh x $0.25c = $1231)

Step 3: Divide the total cost of your system by your savings per year to get your ROI. For example, a 3kw system that costs less than $10,000 should knock about $1100-1200 off your power bill each year, which works out to an 11-12 per cent ROI - or under ten years to pay for the cost of the system.

Note this doesn't factor in power price rises - if power prices continue to rise then pay back will be even faster.

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