Electricity prices in some of the North Island's highest - and sunniest - power bill areas are tipped to reduce with the $300 million development of a major solar power generating network on productive farms.
Lodestone Energy, New Zealand's newest and largest solar energy company, will initially build and produce solar energy from five farms spanning 500 hectares to Dargaville, Kaitaia, Whakatane, Edgecumbe and Whitianga.
The first five-farm phase of the privately funded Lodestone venture will produce nearly 400GWh of renewable energy, enough to power 55,000 households, about the number in Hamilton city.
Managing director and 46.8 per cent Lodestone shareholder Gary Holden, said the farms, each located close to a substation to keep interconnection costs down, will plug into those substations and earn the spot or half-hour price, but will also sell to local retailers at a fixed price.
The farms would be "a game changer" for the electricity market.
"These are five of the sunniest locations in the country that also have a very high electricity price that needs to come down. We will have a positive downward pressure on the electricity price."
The first consented development will be at Kaitaia, with construction due to start by late this year. This farm is expected to start producing electricity mid-next year.
"One of the fundamentals of the electricity market is that the local power price is a function of how much electricity is shipped in from far away," Holden said.
"In the Far North for example, at certain times electricity is coming from the South Island so the price there is reflective of power coming that distance. By generating right there on the spot we are able to bring back the cost of bringing power to an area.
"We intend to be a good strong competitor against retail propositions (local people) they've been offered so far."
Consent process work is under way for the other four farms, which are expected to be fully operational by summer 2023-2024, said Holden.
Solar power production, which can be constructed very quickly at a lower cost than wind and geothermal plants, doesn't require water, causes no emissions and pollution, and will be "tucked in behind hedgerows so will disappear on the landscape", so local authorities find them attractive, he said.
The venture will increase New Zealand's solar generation eightfold, injecting sustainable, renewable power into the electricity grid during the day time and helping reduce the country's reliance on fossil fuels, said Holden, a dual Canada New Zealand citizen with a 35 year executive and investment career in the energy sector in both countries.
He is a former chief executive of Pulse Energy and TransAltaNZ, which in the emerging deregulated energy sector post-1995, held the largest retail market share in the country.
Holden said the technology used - a total of 500,000 panels imported from industry leader China - will be the most advanced available today, but the most innovative part of the venture was building one big power plant in five locations while retaining productive land use underneath.
The panels will be 2.3m above ground when in the flat position, allowing farming underneath, and will rotate to follow the sun. They will be placed 10-13m apart so a tractor can move between rows.
"From a distance it will look like they will look like a vineyard or an avocado farm. We wanted to keep the productive value of the land intact."
While the technology is imported, local electricity distribution companies will be involved in the "big ticket" interconnection work, Holden said. Each farm will host between 70,000 and 170,000 solar panels.
Lodestone was founded last year by New Zealand software entrepreneurs Guy and Sue Haddleston, who hold 30.4 per cent of the company, and Holden. Together with 20 other private investors, they will fund the first phase of development to construction, costing $40m to $45m.
Then the company will seek more investor capital and bank funding, probably in six to nine months, Holden said.
The company owns the farms but will lease them to professional farmers and growers, for the best production use for the area.
The raising of the panels meant about 85 per cent of agriculture production could continue after the panels are installed. It also means if the farms are flooded, electricity production isn't disrupted.
Holden said the venture's development manager has just developed Canada's biggest solar farm through his company Greengate.
New Zealand received high levels of sunshine, with above-average solar radiation occurring in most of coastal North Island and the central South Island, he said.
The first five farms were located in the country's sunbelt - between the 34th and 39th parallel - placing them at the equivalent latitude of the Mediterranean and Southern California, where solar generation is common.
"In addition, the electricity market welcomes distributed generation, particularly in areas where demand is growing and electrical transmission is constrained."