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Is it the right time for Solar Homes?

The Green Party has some great transport policies, and have recently announced their support for the Congestion Free Network as one of those policies. However, I haven’t been as impressed with the Greens’ energy policies (or any of the other parties’ ones, for that matter).

Earlier this year, the Greens announced their Solar Homes policy, aimed at encouraging the uptake of solar electricity. There aren’t any (direct) subsidies involved, but instead the government would offer low-interest loans for solar panels, and the homeowner would then pay the loan off over time as an extra item on their rates bill. As National correctly point out, this is still a subsidy, to the extent that the interest rate is below market levels.

Incidentally, I see Dr Susan Krumdieck is not a fan of the policy either, based on the comments on the Youtube video…

 

There are a number of flaws in this policy, as I see it. Firstly, the desired outcomes don’t seem to be well defined. What is the goal of this policy? Is it about encouraging renewable energy generally, or reducing greenhouse gas emissions? If so, there are more direct ways of tackling the problem. Or is it about solving a perceived market inefficiency, i.e. households are underinvesting in solar because they don’t value the future benefits enough? If so, the policy might be a good idea, but there are market inefficiencies everywhere, and no government can solve them all. Solar may not be the best one to tackle: perhaps we’d get more bang for our buck by focusing on another area, e.g. encouraging active transport for its health benefits, or something different altogether.

I talked to quite a few people about this at the NERI Energy Conference this year, and views were quite mixed. Some people thought the policy was a good idea, and others thought it wasn’t the right time or place. Mike Underhill, chief executive at EECA, is in the second camp, and he spoke on this at the conference, as well as writing a column which was published in the Herald.

 

The Wider Issues

There are some general issues with solar power in New Zealand. It provides power during the daytime, and with more generation in summer. That’s not a good fit with our electricity demand profile: demand is highest in the evenings, and in the winters. This isn’t the case for some countries, incidentally – in hotter climates like Australia, the Middle East, or California, air conditioning use means that demand is higher in summer, making solar a great fit.

The other thing is that solar is relatively high-cost compared to other sources of generation, and isn’t likely to be cost-competitive for NZ. Prices continue to fall, and it probably will be competitive in the medium term, but are we better off waiting a few years until prices are lower? Besides, solar will become more attractive as we develop better ways of storing energy – e.g. electric vehicle batteries (I expect this to be a long-term factor) or pumped hydro storage – and those will also be more viable in the future.

Another important factor is that New Zealand already generates most of its electricity from renewable sources. If we’re switching out other electricity for solar, we’ll get the most benefits from making sure we displace non-renewable sources, not renewable ones.

This doesn’t mean that solar won’t have its uses in New Zealand. Ideally, we could use it in a targeted fashion, to avoid having to make expensive upgrades to the grid. For example, Auckland is growing rapidly, and is a long way away from our hydro resources in the South Island. Solar here could take the edge off that demand growth, and perhaps also reduce reliance on thermal plants like those at Huntly.

Turning to the rural areas, solar may look like an attractive option for remote rural communities, where electricity is expensive. However, it may not actually save that much money. Firstly, unless households can go “off grid” entirely, they’ll still need to pay for the fixed costs of maintaining the grid – but spread over a smaller amount of purchased electricity. And if they do go off grid, they’re shifting those costs onto other people in their communities, who are still connected – that’s a bit unfair on the people left behind. Not to mention that most of these communities have a shrinking population to begin with, and therefore are likely to have a declining demand anyway.

 

The Financials

As Mike Underhill wrote in the Herald column, “the price of solar panels has dropped but it still costs about $10,000 to install a grid-tied 3kW system without storage batteries”. The Greens would lend the money for this at the Crown’s sovereign interest rate, and at 4.1%, the interest would work out to $410 a year. Would households even be able to save more than this on their power bill? I’m sure some could, but I’m sceptical that the average household could, and certainly not if the interest rate was much higher.

As Cliff Turner, an electrical engineer, pointed out on the NERI Hub:

Rather than households investing $12K or so in a PV system, in many cases they would be better investing in a more efficient vehicle, especially for city use. As an example, a Toyota Corolla GX Hatch is priced at $34K (from Toyota’s website) with efficiency 6.6L/100k and if the household was prepared to go to a Prius C at a similar or cheaper price depending on the model they could increase efficiency to 3.9L/100km. Assuming 10,000km pa this would save about $500 pa which is getting close to what the PV system might save in electricity cost. If the premium for a pluggable option was small, then even further fuel savings are possible. This is a better strategy than PV from the perspective of carbon emissions, given that NZ has low emission electricity generation options with good EROI.

I’d agree with those points.

 

Wrapping Up

As policies go, the Solar Homes one isn’t a shocker. But it’s not particularly helpful either. Overall, I don’t think now is the best time for a blanket, nationwide policy like the one proposed. I’d be more interested in a cohesive strategy to wean us off thermal generation, to get us to 100% renewables, which I’ve written about previously. With the Greens’ policy, I’d be inclined to wonder how much solar would simply be displacing other renewables, rather than non-renewables.

The Greens are also advertising a policy called Solar Schools, which, from a quick look, seems like a good idea (and is a better match with solar’s generation profile). However, if it gives substantial cost savings as implied, I can’t see why the Ministry or schools wouldn’t do it themselves, and why it would need a political party to come up with a specific policy to make it happen.

43 comments to Is it the right time for Solar Homes?

  • TedF

    I feel that there is definitely a place for targeted PV home installation, particularly north of the Bombay’s where we have a fairly high carbon generated consumption.
    NSW targeted the production of 50mwatts by pv in 5 years and achieved that in 3 years, http://www.resourcesandenergy.nsw.gov.au/energy-consumers/solar/solar-panels
    What we have done is made a mockery of the cap&trade and the power companies seem to be actively discouraging PV home generation.
    The loss of energy in transmission is considerable and when the new buildings in Auckland are looked at they do not seem to be designed on energy saving principals and air conditioning is becoming a way of life in Auckland where it is not really needed by most standards.
    The government had a goal of 90% renewable electricity by 2030 but that goal seems to have been abandoned. We need to take this commitment and make it shorter as NZ does not seem to take it’s role on co2 production seriously. We need to think about the world we are leaving for a moko’s.
    and we need to be thinking about our co2 production in terms of co2 per capita if we are to take the whole problem seriously.(off message sorry)

  • Agree with most points, but there are three emerging trends which may rapidly change the picture: power-to-gas technology (for seasonal storage), flywheel energy storage (for shorter periods), and electric vehicles. There currently is a disconnect between sunshine hours and demand, which also renders all net-zero-energy house concepts rather questionable. Electric vehicles may be suited to even the demand side somewhat. But: if we were able to store much of the solar energy available in summer over longer periods inexpensively – and a few technologies are on the cusp of offering that – PV was a quite attractive option to consider. Increasing the efficient use of energy is always the most logical first step, and there are vast untapped potentials for this in the building sector, which instantaneously make sense. There’s a lot more to energy efficiency than insulation, LEDs and star-rated whiteware.

    • John Polkinghorne

      There are plenty of emerging trends which could change the picture, including new technologies and simply a declining price of solar. However, the question is whether it’s a good idea to subsidise solar across the country, *right now*, hence the title of the post. And I think we’re better off to put money into something else instead.

  • Because NZ generation is dominated by Hydro we already have a de facto storage system, and one that requires no new infrastructure nor opex cost. Basically every electron that is either not required or replaced by other generation allows water to be stored in hydro lakes. Ergo -> storage of potential energy.

    NZ has good capacity for more wind, geo, and solar, and could stop burning gas for electricity easily (except for the 10% or so of co-generation which is very efficient).

    However this isn’t the big challenge for the country. That is is liquid fuels for transport. That’s the area that needs a major effort. Hence, in part, the efforts of this blog.

    • TheBigWheel

      Patrick, you make a good point. Solar (or wind or other intermittent renewables) and hydro make an excellent mix of clean electricity generation. And what’s more, in general terms, the sun shines more in the north complementing hydro in the south.

      But whilst this is true at a macro scale the problem in the electricity system comes at the local network level. The lines, cables and transformers on your street weren’t designed for PV generators feeding into the network or for that matter EVs drawing 15 A for 6-10 hours. The local network is designed assuming a degree of diversity: your peak demand occurs at a different time of day from your neighbour’s, and theirs from their neighbour’s. With even a relatively small number of PV installations and EV connections, demand patterns could be very different.. especially if they are clustered (the best salesperson for a PV system or an EV is the person who just bought one). So without network monitoring and control (and there is essentially none on the local network today) or monitoring and control of consumers’ electricity useage (and it’s not at all clear yet how that might work, and it raises social as well as technical and economic issues), the local network could melt.. or get a whole lot more expensive.

      And as John points out as and when those who can afford the investment go off-grid the costs of maintaining the network are borne by fewer and fewer customers.

      Another issue arising from John’s post is that while solar / storage may well be “competitive in the medium term” (current modelling shows 3-5 years’ time in Australia? 4-6 years in Germany.. a few years later in NZ? ..plenty of references on http://reneweconomy.com.au/) this is well within the 30-50 year lifetimes of the assets that the electricity companies are installing today, that your lines charges are paying for. Those investments are at risk of being undercooked / overcooked / stranded.

      Obviously if lines charges go up to pay for all this then more people may choose to go off-grid.. so lines charges go up again..

      So policy development in this area is needed, because there are substantial social and economic issues raised by the emerging technologies and consumer choices around (electrical) energy supply and use. Irrespective of whether there are other issues that need to be addressed. The Greens are right to bring this conversation forward.

      You could see a time when the lines companies are taken back into local authority control, and charges based on access, whether you ahve a connection or not.. e.g. wires in the street = sanding charge of $ 1000 per year or whatever. Or maybe the network could be disaggregated in residential areas and operated entirely islanded from the grid. Whatever.. not what we have today. You get the idea.

      Incidentally I also agree that liquid FFs are the main target for NZ emissions reductions. But since the alternative is EVs (or PT, active commuting), this then impinges on the (local) electricity network.

  • Harvey

    Networks have to build for peak demand. Unless you are off grid, a house with solar is contributing to the peak demand (6pm at night), yet not paying their fair share of the lines charges. If solar becomes prevalent, it’s likely the lines charge mechanism will have to change.

    The actual generation by solar is far more expensive than the already clean and green power generation that supplies over 80% of NZ power. This will only increase as current thermal capacity is retired as it reaches the end of its life

  • Nic

    It is not quite correct that peak demand is in the early evening. This is certainly true in the depth of winter, but for most of the year, peak demand is at 9am, and demand remains steady until 3pm or so. This is especially true in the upper North Island. Summer in Auckland, the peak is 10am until 2pm.

    More importantly, pricing brickwalls from 9am to 6pm. Even in winter, when the peak is at 6pm, demand is still at its highest throughout the daylight hours. A grid connected PV system generates electricity when the market price is highest.

    There is also very little in the way of generation capacity in close proximity to Auckland. The entire Waikato hydro scheme has a lower output than the Huntly station. Auckland and Northland are ripe for PV microgeneration.

    You can watch the NZ electricity market live at http://www.em6live.co.nz

  • obi

    I recall when I lived in Australia the news was full of stories of people who had spent a fortune on solar energy systems and (once installed) had worked out that the value of the electricity saved was negligible. Typically the people drew the completely wrong lesson from their financial stupidity… namely that the enormous subsidies should be even greater. And that is in a scorching hot country.

    It’d be great if this was mature cost effective technology and we were all generating our own electricity at home. But the technology obviously isn’t there yet, and the government shouldn’t be subsidising it even if it were.

  • anthony

    http://vector.co.nz/solar
    I work with two guys who have had vector install solar panel and battery systems. It‘s a couple of grand up front and lease to buy scheme, with free power.
    The economics stacked up reasonably without a free loan.

  • Great to see a post on the question of solar/decentralised energy production. If individuals, companies or governments value access to cheap oil at all seriously you kinda have to work this one through, and I’m not sure we really at a point where a way forward is anything like clear yet. It’s a complex issue – I think John has touched on many important points, and the comments add to that again, but I think there is much more again that unravels the deeper you get into this.

    Some discussion fodder, much of it from a project environment:

    – Kara: zero energy houses based on efficiency and PV are well beyond concept-level in Auckland. Respect to Jo and Shay for what they have achieved here: http://zeroenergyhouse.co.nz/
    – there are lots of vested interests in this field, power companies and dependants not least. Beware of propaganda as well as good facts from this source.
    – I see no problem with subsidies, if they achieve a strategic change with long term benefits to individuals and the country that would not otherwise happen. I really don’t expect that the initial construction of our current energy system was truly self-financing on a commercial model given it was built in the post-war government led era and by publicly owned entities, although I don’t know all the facts. Anyone able to amplify?
    – we may have the infrastructure in place to supply other renewables better than most countries, but I disagree with Patrick that there is low OPEX involved in maintaining this. Dams only lasts for so long before major maintenance can arise, and distribution networks take a lot to keep running. There is a reason our bills keep going up, and it’s more than just shareholder expectations and state asset sell-offs, although they don’t help.
    – centralised is essentially very easily disrupted and takes lots of effort to maintain. A systems based on source in the Deep South and main consumption in the north, with limited redundant network capacity, is asking for trouble especially in an earthquake prone country.
    – decentralised is much better in many ways; the key questions are how decentralised, and setting up viable means of sharing and maintaining at a local level if you go to more than an individual property.
    – Patrick is right that transport is a much bigger issue. Green buildings without low-energy urbanism is a big mistake. (Personal rant: I find massively oversized “eco-houses” with fig-leaf PV bolt-ons completely fatuous. Rant over)
    – as commenters have already highlighted, the daily and annual energy pattern is not as simple as often suggested. This also varies from city to city in NZ. It will also change very quickly in the future as energy costs climb. The big advantage of buying your own power supply is really that you lock in future costs to a high degree of confidence. A quick glance at recent annual rises gives you the info you need…
    – to me the big possibilities are in neighbourhood energy models: generating, storing and consuming locally to match supply and demand without excessive transmission losses. This needs land use coordination and cooperation. Europe and the US have some government and commercial providers that have been running for years already. Looks like a tough one in our local context though – I don’t think we can deliver planning for good building forms that well, let alone advanced commercial and technical urban systems that require cooperative development attitudes.
    – embodied energy and the relatively rarified materials in current panel tech is an issue. I’m not a blind technocrat, but I do expect this to improve as better, cheaper, simpler technologies that are already being extensively explored come to market.
    – we have known for along time that energy efficiency is far more effective than adding new generating capacity. We have sooooo far to go in NZ on this front alone it’s ridiculous. Basic passive solar retrofits to existing houses will be a major market in the future. Match this with more efficient cities in terms of transport energy and NZ will be much better off financially, health-wise and in terms of living standards.

    Right, thats far too much already. Thoughts?

    • Yes, lots of people are doing net-zero-energy – but is this a smart way forward, in light of the discrepancy between supply and demand times? My money is on bringing down demand to the absolute minimum, while not compromising health, rather than stopping short of possible efficiency gains, and bolting on PV panels to become net-zero. I believe the Pt Chev house could have gone further on the efficiency road.
      Passive solar obviously requires consistent solar gains to work, which is fine for the little home on the prairie (well, unless the sun isn’t shining at all for a few days in winter) – but in urban environments you hardly ever have the unshaded fassade oriented to true north. We need better concepts than passive solar, and they are readily available, tested and scientifically evaluated for new builds and retrofits alike, have a look at http://www.phinz.org.nz.
      I like the neighbourhood energy models. With fair feed-in tariffs, the grid could be used as a large battery for these – to an extend. With more solar and wind in the power mix we will need to solve storage (making it less of an environmental problem than batteries are, and more affordable), but again: there are good approaches for this not too far away from widespread availability.

      Mac-mansions with random eco-features are no solution at all – but: they are universally promoted in the glossy magazines and win architectural awards – one of my favourite rants as well!

      • Bryce P

        Would be interested in what you would have added / changed to Jo and Shay’s place.

        • A few things. Quality control of the fabric for starters, doing proper energy balancing, and adding a very efficient heat recovery ventilation system. Good indoor air quality is important, and relying on windows for this is treacherous. Plus ventilation heat loss can be curbed by over 90%, see here for more: http://www.phinz.org.nz/faq/why-mechanical-ventilation. Mind you: I am not saying this is a bad house – but it’s not the optimum that’s economically achievable.

          • Bryce P

            I’ll put these comments to Shay and see what he says.

          • Hi Kara. I’m pretty familiar with PassivHaus as a design philosophy. If I might take liberties with what I think is an excellent certification and design approach, PassivHaus is really just taking the passive solar design that I referenced to the max. I subscribe to a lot of the PassivHaus thinking, but it is important to understand it’s relevance to different climates. It is essentially optimised for cooler climates, and from this you have to question it’s relevance in full for Auckland. South Island and Wellington – absolutely relevant I think, but Auckland is much closer to a mediterranean climate. There is a lot more energy available to capture, and much lower losses due to differential temperatures between internal and external conditions.

            I don’t know how well you might know Jo and Shay’s project, but I think it strikes a good balance of “build tight/ventilate right” against working with the ambient energy gains that are possible in Auckland for much of the year. I’d hate to live here in a really airtight box, although that would be my first choice in Dunedin or in the north of the UK where I used to live and work.

            Like I said, I generally subscribe to the approaches that PassivHaus highlights, but I think you need to be mindful of the law of diminishing returns. Not all money spent will give you a worthwhile return, either monetary or qualitative. I’m interested in maximum bang for buck to transform NZ houses, and this is where I’m at in terms of using my own house as a testbed. Details below for those interested. None of this is intended to brag, just to show what is possible with limited effort and a bit of good advice. Also worth mentioning that this is all based on really good work by lots of others – designers and researchers who have provided much of the knowledge that anyone needs. It’s all out there….

            Mercury power bills are about 10kWh / day summer ($90/mo) and were 15kWh/day ($135/mo) last month – admittedly a warmer winter than usual. [The GEM web tool from Mercury is invaluable in understanding what your energy is used for] 9kg gas is c.$35 per 9mo for the hob, wood for the burner was probably $150 last winter, last time we had to buy commercially. For me these are achievable and very acceptable bills for many Aucklanders, with limited home improvement cost.

            __

            1950’s single level in Glen Eden, 100m2 habitable space, 4 beds, 2 baths, weatherboard and clay tile, 2 adults and 2 young kids. It gets pretty cool in our area compared to some other parts of Auckland, and we get the Waitak cloud more than sites nearer the coast. I bought it in good part because the living spaces are well orientated for the sun, but its hardly a solar design. There’s no thermal mass to speak of, and several rooms get little or no direct sun. We get some condensation on single windows, and some of the usual Auckland mould around window frames, but nothing now that is worrying and can’t be removed with once a year cleaning. I think the previous owners had much worse….

            My modifications include:

            – ceiling (Autex Greenstuf R2.2 ontop of existing Insulfluff) and floor insulation (R1.8) under the old subsidised scheme. I was anal on the quality control and had the installer back to refix the floor insulation. Polythene sheet on the ground in the basement – big impact from this in terms of comfort. Original wood floors, no carpet.
            – Main heat source is a woodburner, replaced last year with a modern Bosca unit. I did contemplate a heat pump, but i just hate those things. Kids have a 400W low surface temp electric rad in their room for the winter nights, on a 50% timer pattern.
            – Windows – all single glazed original timber. Added good draught strips all round. Added that cheap heat-shrink plastic “double glazing” film to 3 bedrooms – can be very effective, see Otago Uni or BRANZ research (from memory). Living room has $1500 of lined curtains, money well spent for heat conservation and make the room amazingly quiet for conversation. Bedrooms have v. cheap curtains, but full length and with the original pelmets (important detail).
            – hot water tank is modern but outside the insulation envelope under the house. I researched a heatpump head unit, just not got the cash handy though and would prefer solar HW given the choice. I’ve added another jacket and put armorflex on all pipes that I could get to. A big detail that most NZ houses miss. Showers are 9L heads, enjoyable but efficient. The kids have a bath most nights unless they are particularly naughty… :-)
            – I have looked at Solar HW and would go with this, just lacking in funds. Would go with a European manufactured drainback panel system from Eric Jansseune or EWA-TEC if the cash was available.
            – Lighting is a biggie to get right in my view, easily underestimated. Ours is almost entirely CFL or LED retrofit bulbs, including on pre-existing dimmer circuits such as the lounge. Anyone who says efficient lighting is not attractive has not looked recently. External lights are on daylight sensors, 3 on all night with 2-3W LED’s. 2x 150W Floods are on movement sensor a very short timer. The only ‘trad’ bulbs are in the two bathrooms, where their heat loss contributes to keeping things dry.
            – Washer is about 8 years old, likewise the dishwasher. Both get run on sensible cycles, full. Clothes are all dried outside under cover, fold-down rack outside the washer location to make life easy.
            – we’ve got a flat screen telly, broadband and wifi, and i love my stereo. Wifi stays on but anything that can sensibly be turned off when not needed is. Breadmaker, oven, microwave get regular abuse. Fridge/Freezer is an ancient F+P, recently resealed. We don’t use a dehumifier any more, see next. Hob is gas, on a 9kg that lasts about 9 months.
            – Ventilation is most definitely a key mod. Kitchen had a hood properly vented. We removed downlighters when we moved in, together with those ridiculous holes in the ceiling above the shower that people used to pretend was good ventilation. Showerdome in the ensuite, but no use without a fan. Added two regular extract fans, one in each bathroom, and recently added backdraft shutters, which has made an enormous difference to comfort in the bathrooms. Man, the kit available in NZ is shockingly poor on this front….. I toyed with HRV as well as a home/custom made ventilation or imported options, but ended up deciding it was not worth it for this type of property once the basics were covered with simpler options.

          • Tim: there is ample research on the benefits of Passive Houses in warmer climates; the keynote speaker at next year’s South Pacific Passive House Conference http://www.passivehouse.org.nz will be Bronwyn Barry from Passive House California, as just another hint. But it is a common misconception to assume Passive House is only for colder climates. There are in fact Passive Houses working very well in Indonesia and Dubai! Have a look at my doctoral thesis to see what kind of indoor air quality to expect with window ventilation in NZ houses: https://researchspace.auckland.ac.nz/handle/2292/21764. In a nutshell: it’s not looking good. Kate de Selincourt http://www.katedeselincourt.co.uk/natural-ventilation-does-it-work/ and a few other researchers come to the same conclusion. Measured! coefficients of performance for efficient HRV are regularly well above 10; measured COPs for air-to-air heat-pumps in contrast are more in the area of 2-3, without the benefit of constant fresh air. About living in an airtight box, have a look at Elrond’s blog: http://elrondburrell.com/blog/passivhaus-hermetically-sealed/
            Ask the owners of Auckland’s two certified Passive Houses (which are incidentally also net-zero-energy): the one thing they would never ever wanna live without again is the ventilation system! http://passivehouse1nz.blogspot.co.nz/ http://idealhousenz.wordpress.com/
            You’ve done well with your retrofit, and I congratulate everyone who attempts to do better than typical with their houses. I do understand the economics of decision-making quite well, and not every house has to be a Passive House! It is however possible to build Passive Houses within tight budgets, as a number of projects have demonstrated. Here’s one that was build quite economically near Raglan: https://www.facebook.com/passivehousenz
            Retrofitting to Passive House standard however is usually rather expensive, but there are about 20 projects which did this, nonetheless. Another Passive House retrofit -on a tight budget – is happening in Melbourne as we speak, which will be the first in the Southern hemisphere.

          • TimR

            Will definitely check out, thanks for the rich information sources. Good to see so much research on applied methods going on locally.

    • MFD

      “embodied energy and the relatively rarified materials in current panel tech is an issue”

      Please provide some supporting data for these claims and some indication as to what constitutes an “issue” because, frankly, it looks far-fetched to me. Rarified materials? What materials? Embodied energy? How much?

      • Steady on, no need to get shirty… Perhaps I should have been more precise; I don’t think embodied energy is a problem for PV, but it’s worth understanding. No policy or advice should be encouraging gratuitous installation of kit if it does not stack up in terms of embodied energy or CO2 savings (often closely related of course).

        Embodied energy should be a consideration for every building component, or construction project for that matter, transport included. Also, while current panel technology is simple silicon for the most part, I believe there are more ‘rarified’ options around or under investigation, using less common materials than can produce a more efficient energy conversion, hence the reference. Happy to have someone closer to this comment.

        There is actually lots of research into the embodied energy question for PV. The most relevant data I have found to date is by Moore, 2008/9, which paints a pretty good position for PV. You can find an abstract here:
        http://www.lcanz.org.nz/sites/default/files/lca_decision_support_4_moore_a.pdf

    • Neil

      Hi Tim, a great reply. It has so much meat that it should be a stand alone posting. One additional item would be to point out the difficulty in switching on backup power when a fast moving frontal system suddenly cuts most PV generation.

  • Richard Watts

    I think the policy has 3 main reasons to implement.

    1. They want to ‘poison the well’ for the asset sales. If they cut electricity consumption by an appreciable margin they can buy back the power stations on the cheap as the share price will tank. Essentially if they do it right they can give people solar, and get back the assets for less than they were sold for.

    2. They can offset the consumption of hydro resources, and with heat pumps becoming more prevalent I would say that our summer consumption will probably trend upwards. Also the CO2 savings from offsetting thermal.

    3. A lot of things in NZ are expensive compared to international standards. By massively increasing importation of solar panels they can drive the cost down to something comparable to what people pay in places like the U.S.A. I wouldn’t be surprised if that $10k solar install becomes an $8k solar install within a year of implementation (if they implement it) because of lower parts/labour costs. This follows the model of the insulation industry that setup in response to their subsidy.

  • nemisis

    Is it the right time to subsidise??? yes it is for a lot of people. I support the new technologies by buying a hybrid,and my next car is a plug in. After years of massive power price increases we are cannon fodder for the power company monopoly structure. The subsidies will give a bit of balance and control back to the consumer ( who originally funded the whole system to start with ) The government and the power companies have a vested interest to not have solar. By the way if transport is the best way to get efficiency then why not charge your car while it sits in your work carpark or if you are PT ing then charge it in your garage at home. Trucks,buses and trains can charge from their roof while driving and top up at their depots between runs. Either way the subsidies will help the shift and to fight the rear guard actions of the vested interests.
    I also do not want to see unnecessary dams in pristine areas,geothermal in virgin landscapes and worst of all windfarms blotting the landscape. It wholly makes sense to generate where the highest use is and the natural environment is already highly modified. By taking a look at the bigger picture we get a better result . Efficiency shouldnt be the only driver,we need to guide this by reaching an agreed position taking into account all factors

    • Harvey Specter

      What power company monopoly. There are 5 generators and over 20 retailers. transmissions is a monopoly, distribution is a regional monopoly but the Gentailers are an oligopoly at the most and the comcom makes sure there is no collusion.

      • I call BS on this market model. We have no choice but to accept their prices, which keep going up despite demand falling [down 1% over the last year]. This is a classic rentier system. Only those with their own generation or who choose to live without electricity have any choice [and that's nuts- it's mighty useful stuff]. Now we have to pay more for vast corporate salaries and, worse, all that marketing tricking us into the idea that one company is better than the other.

  • Guy

    Much as I am keen on PV as a source for power, it is still not answering the key questions. The biggest single source of power consumption in residential homes is the hot water system. It’s also the only part of the system that has a storage mechanism built right in. I haven’t read the Green’s announcement yet, so not sure if they cover it, but the part that pays it’s value off the quickest is Solar Hot Water heating, and is the most logical thing to implement in NZ. It’s a simple step to make: that all new NZ houses should have Solar HW, and can even be all NZ made rather than having to import the PV panels from China or Europe.

    • Neil

      Do you personally have a solar hot water system? My parents did and the maintenance costs were so high it exceeded any electricity savings.

      • Mr Plod

        What sort of system, Neil? We’ve had no trouble with a tube system that’s been in eight years.

        • Neil

          A tube system with much piping and a pump. The piping developed leaks and the pumps required regular replacement. The system was installed about 20 years ago.

          • Guy

            Yes, well, things have certainly moved on since then. Twenty years ago? Would you judge a new car today on the experience of buying a 1994 Lada? No. It’s a very different beast. Modern solar hot water heating uses evacuated tube technology, totally different from the low tech versions from a few decades back. It works well. No issues on the houses I have specced it for.

            There are some contries in the world where Solar HW is routinely used. Crete is one such place – because it is an island, with a million people, and no decent source of power (I think large diesel generators but there is no water and so no hydro possible), then every single house now has a solar hot water system. Not fancy versions, all low tech, but it means they have removed the thermal load of water heating from their system. Yes, they have lots of sunshine, but they also have a poor economy – and this system means that at least they don’t have to pay for HW heating bills. When I was there a couple if years back, I saw lots of SHW, but not much PV, whereas wealthier economies like Germany had PV everywhere. I’m presuming that Aucklanders like hot showers the same as everyone? The payback period for SHW is about 3 years – but about 10-20 for PV.

          • Yes I have had an evacuated tube system for six years now. It has been up there generating piping hot water flawlessly since it was installed, doesn’t need sunshine either, on overcast days it’s still really effective. Hot water systems are a no brainer, PV is a more finely balanced equation which can be tipped into sense or not by regulation detail or subsidy.

            It depends how much we as a nation see value in distributed generation and what burdens/advantages this has on the whole grid etc.

    • Bryce P

      We had an Econergy hot water heat pump installed at our previous house. Approx same efficiency as solar. Had zero problems over the 3 years we were there.

      • Neil

        Heat pump hot water should be mandatory for all new houses.

      • NCD

        My current plan is to put in a heat pump hot water system, and then PV to drive it- by removing the only large load on the system we only need 1.2Kw of PV to power everything, including hot water, and when you have to heat water at night, you still get the efficiency of the heat pump….

  • Mr Plod

    Great to see this debate being kicked off, even on TransportBlog so well done Patrick for trying to keep everyone on message.
    That said I’m a fan of solar water heating versus PV. Our house has had solar water heating for eight years with negligible maintenance costs just tube cleaning once every three months. That combined with double glazing windows, careful attention to insulation, moving to time of day metering and adjusting behaviours to match means we pay the same for power as we did before the solar went in despite eight years of price increases in between.
    North of the Bombays solar water heating should be required on all new houses and any renovation that touches the kitchen, bathroom or laundry. The objective is to reduce transmission losses as NZ’s center of population drives relentlessly north.
    I say this based on PV experience as we have just replaced a 35yr old 1st gen solar PV panel we installed on a holiday house in 1979. Both solar water & PV technologies are proven and the boom in installations around the world has bought the price down; there’s no excuse, get out and do it without waiting for a government subsidy. It’ll make you feel good to laugh at power price increases.

  • So here’s where I link to this again, a year old but still good: http://theconversation.com/summer-on-the-nem-12635

    Solar PV uptake by ordinary Aussies is doing serious damage to Big Coal’s rentier business model, which explains why Abbott and co are desperate to unwind it.

    More here: http://reneweconomy.com.au/2013/people-power-rooftop-solar-pv-reaches-3gw-in-australia-99543

    “The solar market is having an impact on incumbent fossil fuel generators, and network operators. That’s because solar reduces demand from the grid, and also takes away revenues on what has traditionally been the most profitable part of the day for generators.

    Queensland state-owned generator Stanwell Corp blamed solar for most of its woes, the decline of base-load generation and its inability to return a profit from generation last financial year. As Hugh Saddler remarks in another story today, some of its generators are operating at less than 50 per cent capacity. Many industry experts suggest solar is having such an impact on electricity markets that it is causing a near equal amount of fossil fuel generation to be mothballed or closed.

    The Sunwiz report says that the solar market has contracted from its giddy, FiT-inspired peaks in the middle of 2012, but it is now stable. However, profitability for industry players remains a challenge, although the customer is benefiting. The months of October and November both recorded around 75MW of installations.”

    On the basis of those claims can anyone seriously claim that distributed PV isn’t positive for the whole planet? And even a relatively modest uptake here, along with Geo and Wind could quite quickly price all non-co-gen thermal generation into mothball. Freeing up our gas resource for other uses, or even export.

  • mfwic

    The EECA website says “Due to the lack of national benefit, there is no good imperative for a government subsidy or support for solar energy technologies like PV. EECA will continue to provide independent information about solar PV for consumers so they can decide if PV is right for them.” http://www.eeca.govt.nz/efficient-and-renewable-energy/renewable-energy/solar-energy-in-nz
    If you have the $10k for a pv system you might do better paying it off your mortgage, that way you get $670 pa after tax which is like earning an extra $1k.

    • TheBigWheel

      Much of the EECA website data relating to solar is years out of date and relates to a time when PV panels (and systems) were substantially more expensive than they are now. Besides, they have a very narrow brief.

    • ‘If you have the $10k for a pv system you might do better paying it off your mortgage, that way you get $670 pa after tax which is like earning an extra $1k.’

      When I last looked at this [6 years ago] That’s what I decided. But the calcs then certainly suggested that for anyone without a mortgage and likely to stay in the dwelling for a good few years PV is a way better investment than money in the bank or a likely share market return.

      Worth adding that since then electricity prices have certainly gone up, and PV install costs should have down. Perhaps someone might want to look at it again…?

      “Due to the lack of national benefit…”

      Interesting, do they mean “Due to lack of benefit for power companies…”?

    • David M

      we have had a 3Kw PV grid tied system installed March last year (18 odd months ago) this has saved us $1300 dollars in the first full year of operation over the previous years power bill. (has excessed above the 10% return from investment that was estimated in the PV documents). lots of interesting points listed about the countries infrastructure etc but personally for us and for my family it is saving as so much money each and ever month compared to before it was installed. I would recommend installing a PV as the savings are a lot more than the saving that we would have got from the a smaller mortgage. more money in the pocket at the end of the month to spend on family rather than on bills.

      • Harvey Specter

        Good to see you are getting a personal benefit but is there a national benefit?

        How much of that $1,300 saving was due to line charges?
        Given lines have to build for peak supply, not average supply, have you reduced your peak grid electricity use?

        PS. Not a personal attack. Just pointing out why the Government (aka the Greens) shouldn’t be subsidising PV installation unless it is targeted to specific areas (ie. schools makes sense as might some remove Northland communities).

        • David M

          I have never broken down the figures to work out the percentage charged for each different charge and associated costs.

          economical we are much better off as a family without any subsidising on our system, and we use a lot less resources. financially it stacks up very well. in my experience having a subsidy usually means more people take up the idea sooner, because of the marketing and publicity but I have also experienced that accredited firms with some form of subsidy are usually about the same cost above a firm that isn’t entitled to have the subsidy.

          marketing on just the benefits would be a lot better and a less waste of money.

  • TedF

    Thank you for the links, particularly to the link Energy Market Services. Could someone explain to me the relationship of $/MWh price and the KWh price we pay?
    Has anyone any ideas on the new power co that is setting up with offers of lower KWh price and higher line charge (40c/day) with the options of you taking your power at the current spot price to reduce your power charge?

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