We are hearing the message that solar panels don’t save money and are not worth on the EECA web site. They refer to this consumer report: Sunny Money – Are grid-tied solar
photovoltaic systems a good investment?
If you’re considering solar you may want to mull over this piece that was emailed to me :
I know of at least one person who has been put off from installing solar PV because of this article. But you can’t blame politicians if they are quoting Consumer magazine.
I haven’t calculated our solar PV economics recently. Our system has been in place for over 2 years. Initially (first year) we were on a zero sum costing (1 for 1 payback, and we generated a cash surplus). But then Meridian changed the rules to the version described in the consumer article. As a result we have very slowly gone backwards for the last 1.5 years – i.e. our average monthly cost is slightly higher than our average production, but we have not yet worked off the credit that we built up with Meridian. So we have not yet paid any cash for electricity since the system was turned on. With an optimised use strategy in place (i.e. turn things on when generation is at max – usually middle of day) and an energy efficient retrofit of a house, solar PV should be operable at break even. That means the only cost is either cost of borrowing, or opportunity cost of alternative uses for the money spent. Consumer got its story wrong, because it did not take into account how people optimise their house efficiency and use of electricity when they install solar PV. However, it was right to point out that electricity companies can change the rules without consulting, and that affects the payback and value calculations.
Batteries are becoming much cheaper and the technology more reliable. As power companies change the rules to protect their cash flows, people with solar PV will be incentivised to instal batteries and withdraw from the power grid. The argument that installing solar PV on a micro scale simply shifts generation capacity – because solar PV installers still need electricity at night – is political hype. The main grid battery is water in the dams, and solar PV allows more of that water to be held back, reducing demand for the last-ditch requirement to turn on a gas generator. With enough installed solar capacity, the need for the gas generator will fade to zero. In fact, we already have much of that capacity available at Manapouri – suggesting that the best place to instal solar PV is Northland and AUckland. It is pretty much accepted that the alumium smelter is going to die, despite the taxpayer covering ever more of the costs of keeping it running.
Line charges, gst, etc all remain the same in our power bill, although all are charged on a kwh basis so are linked to the production vs use tradeoff. Our system has covered all of these costs succesfully, at an installation cost of $9500. The system is guaranteed, so there are no maintenance costs (I am not sure how long that deal lasts – we have had one minor breakdown that was almost certainly caused by power supply issues from the grid – it was not a fault with our system).
We have no swimming pool, spa pool, electric car or large freezer. These are big electricity users, and if we acquired any of them, we would have to up the size of our solar array to maintain our break-even status. They are a key cause of the average household use normally reported and on which Consumer based its calculations, of about 8000 kwh per year. The use by our big old house with 4 people is 3800 kwh per year (we use a wood fire for heating, and wood costs us about $240/year).
Dr Ian G. McLean
Thanks for the article Ian – it is food for thought.
Might just spark something in you.