A swathe of "middle New Zealand" is enjoying affordable access to solar energy because of a unique funding model involving Westpac New Zealand, NZ Green Investment Finance, and solarZero.
solarZero develops and installs solar energy systems comprising solar panels and smart batteries for homes throughout NZ. Customers pay a fixed monthly fee, but because of the Westpac-NZGIF involvement, don't incur the estimated $20,000 to $25,000 in upfront installation costs they would usually face.
The $10 million NZGIF investment complements Westpac's funding facility to solarZero, through which it is continuing to support the company to grow its business and expand its product offering. It took a unique funding approach through a Green Bond to enable solarZero to set up its service model.
solarZero's smart batteries help reduce NZ's energy demand during peak hours, offers users the ability to export excess power to the national grid, and provides backup energy during power supply interruption. It has systems installed on 5200 New Zealand properties which, as a fleet, have generated 30.5GWh of clean, renewable solar energy over the past 22 months, reducing New Zealand's carbon emissions by 3750 tonnes.
The company says it is providing customers with up to 30 per cent saving on their power bills on average, fixing up to two-thirds of their energy bills, and providing up to 80 per cent of their homes' energy needs.
By making available this funding, Westpac had effectively securitised customers' 20 year supply contracts, thereby providing access to a swathe of "Middle NZ" for whom the upfront installation costs would otherwise have been prohibitive, company chief executive Neil Cowie says.
He claims 30 per cent market share as a result, and says without the external funders, solarZero would have been left with only a select clientele with the ability to pay the upfront installation costs.
"What we effectively do is we install the panels, use our smart battery to store any excess solar and then we deploy it during those peak periods. We save customers money by them not having to use the grid during peak periods — when a premium price is payable — and we are also taking demand off the grid in those peak periods."
Central Otago is one of solarZero's largest markets. A partnership between solarZero and electricity lines company Aurora Energy in the Upper Clutha district involves solarZero installing solar panels and battery storage on customers' properties so they can switch to non-network alternatives when the load on the network increases.
In 2019, Aurora called for registrations of interest to seek non-network alternatives to increase the supply to the Upper Clutha and Wanaka communities. The process was about finding reliable, lower-cost alternatives to building new network infrastructure and ensuring the increase to supply could not only meet current demand but future demand as these regions continue to grow.
Cowie said a key benefit of the arrangement was Aurora's ability to defer expensive network upgrades, thereby providing greater electricity demand flexibility for households.
"Globally, solar, batteries and smart control — which are collectively known as flexibility services — are increasingly recognised as being key to an efficient power system that supports the electrification of the economy. This project is right up there nationally and internationally."
ACC and K1W1, Sir Stephen Tindall's investment company, are key shareholders in solarZero, which began in the 1970s as Thermocell, a solar water heating company that was started by Professor Arthur Williamson and his colleagues from the University of Canterbury.
Under the guidance of founder Andy Booth, the company evolved to become New Zealand's leading solar energy business with offices in Christchurch, Nelson and Auckland.
Cowie said: "Two years ago we were up against naysayers who said solar wouldn't work, that it was too expensive. We've taken that out of the equation — community generation is certainly going to be part of the future of our grid and our renewable energy needs."