Nov 9, 2024
The Post
New Zealand: Please put your rooftops to work

Our rooftops are largely designed to shelter us, writes Mike Casey in The Post. But they could be doing much more than that. So why is New Zealand's rooftop solar adoption low? And what can be done to speed it up?

One of the perils of getting solar at your own home is that you can’t help looking at all the other rooftops without it.  

All that energy from the big nuclear fusion reactor in the sky beating down on Earth relentlessly and millions of potential power plants - from subdivisions to supermarkets - missing out on the cheapest electricity humans have ever created. To solar enthusiasts like me, it always feels like a massive waste.

So why is rooftop solar still relatively rare in New Zealand, despite plenty of talk about it and almost universal positivity from those who have it?

One of the main reasons is that New Zealand is one of the few Western nations not to have subsidised rooftop solar, so anyone who had panels in the past was basically paying an environmental premium for them. It’s only recently that it has become the smart economic option even without subsidies.

New Zealand has benefited from the subsidies other countries have rolled out because the global solar industry has grown so quickly and economies of scale have brought the price down significantly for everyone. As a result, financed rooftop solar is now cheaper than electricity from the grid and we are seeing the fastest growth ever in New Zealand, albeit from a low base.  

There are around two million occupied homes in New Zealand and approximately 60,000 of them have rooftop solar (or around 3% of all homes connected to the grid). It took New Zealand over seven years to reach 30,000 and just three years to do the next 30,000.

Compare that to Australia, which heavily subsidised solar, simplified the installation process, and invested in robust workforce training for installers. It is at around 35% solar penetration, with many neighbourhoods well over 50% and some edging towards 80%. Australia now has the lowest cost solar in the world - even though the subsidies have reduced significantly over the past ten years.

New Zealand solar installations are significantly more expensive than Australia’s and that’s in part due to additional compliance costs. Average New Zealand solar installations are also about half the size of Australia’s, which is probably due to a combination of those higher costs and lower export limits. The good news is that the Government plans to overhaul over 400 outdated standards and match our settings with those of Australia or other trading partners. This sounds boring, but it is a big deal for the sector and if these long overdue changes are made quickly it will definitely help reduce the costs for homes and speed up adoption.

A pervasive belief in New Zealand has been that rooftop solar isn’t suitable or necessary, either because it’s not sunny enough or because we already have a renewable electricity system. New Zealand has similar solar potential to the state of Victoria, which is at around 30% solar adoption, and has more than Germany, where rooftop solar grew by around 30% year on year (not including the over 500,000 small ‘plug-and-play’ solar panels on balcony railings and in back yards that can power fridges and laptops).

While our grid is highly renewable, electricity needs to be transported on all the poles and wires, with various middlemen taking a cut along the way. There are a lot of executive BMWs between the water that flows through our dams and the households that receive that energy. The reason rooftop solar is now the cheapest form of electricity available to New Zealand households is that it is generated where it is consumed and avoids those delivery costs.

Even if we put a magical power plant in the middle of the country that generated free electricity, it would still be cheaper for customers to have rooftop solar - because of all that delivery infrastructure. And that’s why it’s important to distinguish between rooftop solar (which is cheap for customers) and solar farms (which is more expensive for customers because it needs to be transported).

The price of grid electricity and fossil fuels is expected to keep rising, but the sun doesn’t raise its prices and it doesn’t charge you to land on your rooftop. Rooftop solar basically locks in the price of electricity for decades by paying for it upfront, but those upfront costs are still the biggest barrier to uptake, even though it is cheaper over the long run. If you have the capital, rooftop solar is an economic slam dunk for most homes, and it is still almost half the cost of what you are paying for grid electricity if you can add it to your mortgage.

It works particularly well for those with electric vehicles because fuelling your car with the sun is the petrol price equivalent of around 30c per litre (and it also removes the biggest chunk of a household’s emissions: petrol and diesel vehicles).

Not everyone has access to finance, however, which is why we are advocating for Government-backed, low-interest household electrification loans to pay for rooftop solar and heat pumps, rather than subsidies. These loans would be tied to the property and the Government could recover its costs.

Most people putting solar on their rooftops probably think they are too small to have an impact on the energy system. But, academics from Auckland University of Technology recently pointed out that the 14 biggest rooftops in Auckland would be equivalent to New Zealand’s largest solar farm. The rooftops of 167 schools and supermarkets would also provide the same amount of energy, and be much closer to the point of consumption.

A map of Auckland marks the sites of the city's 14 largest buildings, which have a rooftop area equal to the largest solar farm.

Rewiring Aotearoa’s research suggests that if a 9kW solar system was added to 80% of our homes we could generate around 40% more electricity than we do today and if mid-sized systems were added to buildings on our approximately 50,000 farms we could generate 60% more electricity. Those rooftops alone would double our current renewable electricity generation, which is what the Government is pushing for with its Electrify NZ policy, while household batteries - which are also growing steadily in popularity and dropping in cost - will help the country deal with its peak demand problem by storing cheap solar for when it’s most needed.

A lot of individual homes, farms and businesses add up to a lot of extra generation - without the expensive resource consents, grid connections and land leases that big power stations need - so the Energy Minister should be very interested in increasing that and removing any barriers slowing down the ability to deploy rooftop solar.

Humans are herding creatures and the rate at which uptake will increase now that solar is the most economic option is also a function of how fast people's thinking changes. Generally, we hang on to old ideas for a long time, and it basically takes someone's neighbour to do something before they adjust their views on it.

A recent study quantified how important this ‘neighbourhood effect’ was in Australia and it led to “an extra 15-20 solar installations per postcode per year, on average. Scaled up, that means about 18% of new solar installs come from the neighbourhood effect”.

I can see this happening in New Zealand. A few of my rural neighbours are now looking at installing solar or getting electric vehicles (my conservative dad has already done it) and you can see pockets of rooftop solar on certain streets around Central Otago where the neighbours have obviously been talking. This is how technological change works, and Rewiring Aotearoa is doing everything it can to speed that process up because swapping fossil fuel machines for electric equivalents and running them with renewable electricity is one of the only ways we will avoid the worst impacts of climate change.

Our rooftops are largely designed to shelter us. But they could be doing much more than that. So don’t waste your space. Now is the time to put that roof to work.

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