Solar really only makes rational economic sense in New Zealand if you live too far from a network to be connected, except at great expense.

OPINION: The road to solar power in paved with good intentions – renewable, self-reliant, carbon neutral, off-the-grid, free from contractual relationships with power companies.

But in New Zealand the rationale isn't yet compelling - economically or environmentally.

The issue, in essence, is that it costs 7 cents to 8c per kilowatt hour to buy power from the grid, 80 to 90 per cent of which is renewable without subsidy, and rising.

SUPPLIED "We are weirdly very renewable already and not well-placed for solar because we have lower daytime temperatures, short days in winter and comparatively little demand for air-con during the day," Pattrick Smellie says.

Add to that cost of the wires that carry the juice to your house - the cost avoided by having solar PV. Grid and local network plus metering costs, plus retailers' margin brings the cost of power from the grid to around 26c to 30c per kilowatt hour, depending on where you are in the country.

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Solar off the roof costs about 26c to 28c per kwh - massively less than even five to 10 years ago and falling, but still providing little economic benefit over and above buying 100 per cent renewable power from a hydro, wind or geothermal power station connected to the national grid.

SUPPLIED New Zealand electricity is 80 to 90 per cent renewable, including from wind turbines.

This is a New Zealand, rather than a global, phenomenon.

We are weirdly very renewable already and not well-placed for solar because we have lower daytime temperatures, short days in winter and comparatively little demand for air-con during the day.

Solar makes huge sense in Australia - lots of daytime load in office buildings, more stable daylight hours and an absurd amount of sun and daytime heat that people want to avoid.

By comparison, New Zealanders want a bit of warmth in sun-starved winter rather than cooling down in summer.

For this reason, electric vehicles (EV) make no sense in Australia because most of its electricity comes from coal, whereas EVs make enormous sense in New Zealand because we make most of our electricity from renewables and it's very cheap at night, when we would be charging them up.

Aside from all the rational arguments, solar is politically and individually attractive - an example of individuals being able to take back power from the megalithic corporations that supply electricity and a statement of support for carbon neutrality.

Politics/ethics good, but New Zealand economics/cost still bad. A choice for the wealthy or the highly principled rather than people just trying to get through the week.

With these politics in mind, and for about a decade now ending, power companies thought it was good PR to buy back solar PV from micro-generators at a much higher price than it costs them to buy power from other renewables (hydro, wind, geothermal), even though it made no commercial sense to do so for either the power company or the individual generator, once the cost of their solar array was included.

They paid more for that electricity than if they bought it 80 per cent-plus renewable anyway off the grid, and most of the people selling it to them hadn't factored in the true cost of capital of installing PV versus what else they could have done with the same money.

Solar really only makes rational economic sense in New Zealand if you live too far from a network to be connected, except at great expense.

Obviously, some people will prefer the control and the statement about 100 per cent renewable that solar can provide (although most PV installations retain a grid connection because everyone wants to watch TV and have light at night).

Power companies got the pip with overpaying for PV in the last couple of years because lots of people started going solar and it started costing them money compared to the cost of buying most of their juice from sources other than solar PV.

If they left it that way, they feared it would start costing them serious money, and it might even lead to more use of existing gas-fired electricity generation.

The troubles are many. Among them:

* New Zealanders don't acknowledge the significance of the fact New Zealand is already incredibly high in renewable electricity (other countries are in awe) and if we could just phase the shutdown of the Tiwai Point aluminium smelter with the arrival of electric cars, we would massively reduce use of fossil fuels on transport as well;

* The impulse to go solar is politically important and right. In New Zealand, however, the focus should be on replacing transport fuels rather than electricity, which is already very renewable;

* Because this is all very complicated and power companies are self-interested ahead of public-spirited, the average person feels discouraged in their efforts to get with the carbon-zero programme when it comes to solar;

* Battery technology hasn't yet evolved to the point where grid connection is truly threatened, though probably isn't that far off;

* Will the Government and community-owned electricity lines networks write down the value of their wires (and pay their community owners less in dividends) should batteries start to replace lakes as a source of energy storage?

- BusinessDesk

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