Solar costs handed on

Residential solar power systems have become popular as their price has dropped. Photo / File

Conventional homes pay for solar users

Homeowners who install solar panels to cut their power bills are pushing up prices for everyone else, lines companies say.

Residential solar power systems have become popular as their price has dropped, with systems being installed for about $8000.

Most systems work as a grid-tie, meaning on sunny days the household's electricity comes from the panels. If they generate extra power, it can be sold back to the electricity grid for up to 25c per kWh. For most, being completely "off-grid" is prohibitively expensive but solar panels can create savings of up to $1000 a year from power bills.

But lines companies say that means those households aren't paying their fair share of the cost of running the electricity network.

"People with solar still use generation and networks as much as people without solar," Mark Gatland, chief executive of Northpower, said.

"In winter, especially in the evening, in peak periods, solar isn't doing anything for anyone."

He said the cost of providing renewable energy, as much of New Zealand's power is, was largely the cost of installing the plant.

"We still have to build that hydro or geothermal station and still have to build the network to supply these people.

"Until you go completely off-grid, you're still using as much but paying an awful lot less."

Chief executive of the Electricity Networks Association, Alan Jenkins, agreed there could be an imbalance.

"If, over time, demand in a network drops because of widespread solar use, then the costs of the network will still need to be recovered, presumably from its remaining connected consumers. "

Vector spokeswoman Sandy Hodge said the company was keeping watch on how other countries were tackling it, she said.

"We haven't seen one model developed that's working, with such an early, nascent business, it's difficult to see what way to go. "

Electricity industry commentator Geoff Bertram said the lines companies made large profits and there was no need for power prices to increase to offset the effect of solar panels being installed.

"Lines companies will whinge and moan saying how terrible it is but you can tell them 'have a nice day'. These guys are creaming it."

He said it was an incentive for lines companies to get into offering solar panels themselves, which Vector is doing.