Consumer Watch: Solar deal goes sour

David Fallas will earn less from his solar power. Photo / John McCombe

Daylight robbery, that's what David Fallas calls it. The plug has been pulled on a sweet deal to buy power from homeowners with solar panels because too many people have been signing on.

Six months ago, software consultant Fallas spent more than $18,000 to install 20 solar panels on the roof of his Thames home. Under the plan he signed with Meridian Energy, power generated was sold back to the electricity retailer at the retail price of 31c per kilowatt hour (kWh).

Solar panel systems that generate more than a household can use immediately return the power in the grid, and earn a credit against future power use.

Fallas estimated that during summer his system was generating about 18kWh a day, earning a monthly credit against his power bill of $172.98.

The system could have paid itself off in about nine years. But a month after it was installed, Meridian announced it planned to cut the amount paid for electricity sold back to the company.

Under the plan, expected to be introduced this autumn or winter, solar customers will receive about 25c for every kWh sold, up to a limit of 5kWh a day. Any electricity produced after that will be bought for 10c per kWh. That means only about $80 credit per month for Fallas.

Fallas accepted the "one for one" deal had been generous but said Meridian had overcorrected. "They're going to make a 21c profit [per kWh] for doing nothing. It's daylight robbery."

Meridian general manager of retail Bill Highet said the company was forced to act because so many people were going solar. A year ago, 200 of their customers were using solar energy and that alone was costing the company $110,000 a year.

The number of solar customers had more than tripled to 630 by last week, with another 30 in the process of joining.

"We're in effect buying at a retail price instead of a wholesale price. That wasn't an issue when only a handful of people were using solar power ... we're not wanting to make a big profit, we're simply not wanting to lose money."

Ninety per cent of Meridian's customers did not produce more than 5kWh a day and would not be affected by the change, Highet said.

Those who "covered their roof in panels and then put a few more in the backyard" were seen as business customers, he said.

But Fallas rejected that label. He installed the panels because he wanted to help the environment, and so he and his wife would have lower power bills when he reached retirement age in five years.

The decision to go solar was made after six months of careful planning. "We're only expecting to generate 75 to 80 per cent of our power ... he's got his head in the clouds if he thinks we are a business."

He was now considering spending $6000 to $8000 on batteries that would allow him to store some of the extra electricity generated, rather than selling it back to the company.

Contact Energy also caters for solar customers, but spokesman Shaun Jones said there were no plans to change pricing.

Residential and small to medium businesses using solar panels rated at 10kWh or less are paid 17c for every extra kWh they produce.

Solar power specialist electrician Phil Rumble said systems could be installed for $14,000 to $30,000.