Before investing in solar power, your due diligence is needed! In this article we explore this in detail.
What’s the cost of a basic solar set up?
There was a time when solar power was a luxurious indulgence rather than the more affordable and viable option it is now. The price of setting up solar power at home reduces every year as more and more Kiwi homes boast these sun soaking panels.
The Electricity Authority estimates the average set up for a 4.4kW installed system with around 10-11 panels to be around $12,000-$13,000. In the last 10 years, the price to a consumer of a 3kW system, for example, is now less than a quarter of what it was. What you spend on your system will be dictated by the size of your home, energy requirements according to household use and roof profile and coverage.
As a rule of thumb, a couple who are home most of the time and want an entry level system can expect to budget for under $10,000. From here, the price climbs depending on family habits. A small family may invest $12,000-$15,000 with larger systems costing $20,000+ with the added benefits of daytime power storage and sales of units of power back to the grid.
What about maintenance?
The lifespan of a solar power system is around 25-30 years and during that time you’ll likely need to replace the inverter. The yearly cost of maintaining your solar power system is surprisingly affordable. Generally speaking, the ongoing maintenance relates to the roof panels. Keeping your roof panels clean and free of dirt, leaves, and debris makes sense – as this allows them to absorb the sun’s rays at maximum capacity. It’s recommended you do this once or twice a year. Afraid of heights? Look for companies who specialise in this kind of work in your area. Charges can range anywhere from $150-$400 a year depending on the size of your roof and the frequency and depth of cleaning required.
You may be able to reduce this cost if you regularly prune mature trees that grow close to the house and drop their foliage. Homeowners in coastal areas may find salty air, sand and even flocks of seagulls and their collective cargo of droppings create a need for more attention than panels that are further inland. Heavy rainfall can help wash down the panels to keep them clear, but this can’t be relied upon. Like any live electrical asset, it pays to have a qualified electrician inspect the components from time to time. They’ll ensure your system is performing as designed, not at risk of failing or damage, and that nothing is undermining performance.
How much power can you generate off solar power?
Whether you want to cut the overheads of your monthly power bill or cut ties with the grid altogether, the power generated from your solar power system is a scale that’s based on a few factors. The rule of thumb is that a solar panel sizing is measured in watts (W) or kilowatts (kW) while the output is measured in kilowatt hours (kWh). There are external factors that will influence how much solar power a panel will generate, including:
- The tilt and angle of your installed panels and how they are oriented.
- The intensity of the sunlight in your part of the country.
- The number of daylight hours.
- Cloudy days vs sunny days in your area.
- Anything in the environment that may shadow or intrude over the panel.
Your average daily production will mostly depend on where you live in New Zealand, but as a benchmark, a 1 kW solar panel will generally produce 4 kW of electricity per day.
A typical 4kW system will produce 16 kW of daily power with a margin of error for weather and location. For example, in Australia the kWh output of a panel in Hobart is 14 kWh and in the outback of hot and dry Alice Springs it’s 20 kWh. The good news is this kind of regional difference isn’t so wide in New Zealand.
Calculating the time to repay your investment
Harnessing solar power for your home is a competitive venture that may have a better return on investment (ROI) than other financial investments. This is because the savings in the long run, by switching to solar power, can be offset against the initial outlay of installing the system.
You can do the maths by grabbing a power bill and then jumping online to determine with a provider the initial cost based on your household needs. This will then inform the overall cost and time needed to repay it.
The industry has been operating long enough now to accurately predict a cost benefit analysis that your solar power system will have paid for itself in seven to eight years. With an approximate 25-year lifespan this means that after eight years, the ongoing power being generated is clean, affordable and already paying for itself.
There’s a number of ways to finance the initial outlay, from a mortgage top up to personal loans, and there’s talk of local body authorities offering subsidies.
Choosing high quality solar panels and inverter
There’s a saying that the bitterness of poor quality remains long after the sweetness of low price is forgotten. To ensure that your solar system has the best chance of lasting (as it should) for at least 25 years on your roof, the quest to secure the highest quality panels and inverters starts with some necessary homework. Being blindsided by a system failure after five years because you chose cheaper panels and inverters will sabotage the goal of having your system pay for itself in savings on your annual power bill.
Of the three types of panel – monocrystalline, polycrystalline and thin film –monocrystalline is slightly more efficient and therefore considered the highest quality and most sought after. Because of its higher efficiency, monocrystalline generates more solar power within a smaller roof size. Film panels, whilst set at a lower price point are not as efficient – yet. Make it your mission to learn more about the difference between the standard and newer half-cut solar technology. The half-cut size is pricier but performs better and more efficiently in shadier areas.
Choosing an inverter requires careful decision making too. The inverter converts DC to AC electricity from the solar panels and is key to the whole system. If it fails, everything shuts down.
There are two main types of inverter: string and micro-inverter, each having their own attributes. There’s a general industry consensus that investing in a higher quality inverter yielding more AC electricity is money well spent for economies of scale.
String inverters have been around a lot longer than micro-inverters, and in addition to delivering a more efficient 94%-97% of power, they adapt better to solar panel configuration and are more economical to run.
A good string inverter can set you back around $1,000-$2,000 whereas microinverters usually start around $1,400. Micro inverters harness only one panel to send converted AC electricity back to the switchboard. They run quieter because of the way they’re set up and they maximise output on each panel, which makes shade less of an issue.
The benefit of battery storage
The 16th century proverb “make hay while the sun shines” is an apt analogy for battery storage in your solar power system.
A Kiwi household will draw on more power at optimum times of the day based on their usual routines and habits. Most of us are heavy users at two times of the day, when there’s less sunlight – mornings and nights. The AM rush hour involves hot water for showers, breakfast prep, hairdryers, lights and heating. At the end of the day, cooking meals and heating is a big drain on power too.
Having battery storage makes sense to retain the power created during sun-heavy daylight hours. You’ll then be able to access it at high usage times.
Currently a third of New Zealand solar powered homes include battery storage in the system and this is growing as the technology improves and the prices come down.
Sell your excess solar power
But wait there’s more! The reciprocal relationship between you as a solar powered homeowner and your power supplier has been growing at pace for the past decade. As residential solar power systems become more efficient and generate more power than a household needs, you can sell your power back to your retailer.
The advantages of this are a saving on your monthly bill along and contributing excess power to the grid. A wholesale buy-back rate of around 13 cents per kWh can make a significant dent in your power bill and is easily monitored on the mobile app or from your desktop account to show you how things are tracking. Find out more about how the discounts and buy back rates work.
Learn more about solar power
Visit our comprehensive Solar Power guide to learn more about using solar power in New Zealand - and whether it might be right for you.