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Solar panels and the review of electricity distribution prices

Potential changes in how distribution of electricity is priced could affect households with solar panels and electric vehicles.Distributing electricity from the grid to users makes up around 27% of the average power bill.The Electricity Authority says it expects that the price anyone pays for their electricity reflects the costs of the distribution service they are getting. It says new technologies are challenging that principle. It quotes the example of a household that installs solar panels: “…they can reduce the share they pay of the distribution network costs, meaning other consumers on that network will pay a higher share.”The Authority is looking for changes. “Some good progress has been made by distributors, but price reform is not happening quickly enough and needs to advance with more urgency.”One of the reasons the Authority says changes are required is the growth of solar panel installations. In its paper, the Authority says:

"In 2015, NZIER estimated that just in relation to solar panels alone distribution charges could increase by up to 30 per cent over 10 years. This would add 10 per cent to the retail bills of consumers without solar panels. They effectively end up cross-subsidising others to over-invest in solar panels. The economic cost of this outcome occurring has been estimated to be in billions of dollars.”

The growth in electrical vehicles, and how and when they are charged, is also an issue.One part of the proposal is an annual star-rating of the efficiency of each distributor’s price structure. This rating would be made public.The Authority has published a consultation paper asking for feedback. Submissions can be made up until 19 February 2019.You can find more information here.




Solar installations heading towards 20,000

New Zealand is close to passing the milestone where over 20,000 homes have solar power generation systems installed.

The publication Electricity in New Zealand, recently updated by the Electricity Authority, reports that there were around 18,000 residential connections with installed solar generation at 31 March 2018. Considering the pace of new installations, over 20,000 homes will shortly be generating power from photovoltaic systems.

The installed capacity by 31 March was about 62 MW (up from an estimated 43 MW in mid-2016 and just 8.2 MW in late 2013). As a proportion of total generation it is still very small – around 0.2 percent in 2017.

One big reason explaining the growth of solar installations is greater affordability. The installation cost of solar panel systems in New Zealand fell 75 percent in the 10 years to 2018.

Other sources of renewable energy generation include hydro, geothermal and wind. There is currently around 700 MW of large-scale wind generation available, supplying around five percent of the country’s electricity needs.

Around 85 percent of total generation is from renewable sources, a figure that is steadily increasing. The government has a target of 100 percent renewable energy output (in years with normal hydro inflows) by 2035.

You can download of copy of Electricity in New Zealand here.




NZGBC launches rating for existing homes

HomeFit assesses the health, comfort, energy efficiency and safety of New Zealand homes.

The new service is aimed at New Zealanders who want to improve their property or who are looking to buy or rent an existing home.

An assessor goes through a property, looking at insulation, ventilation, heating and energy efficiency. The assessor considers the property’s performance in terms of providing a healthy warm and dry environment. If it meets certain requirements it gets a HomeFit stamp. Homes with a higher level of performance can get a HomeFit Plus rating. People selling or renting out a property can use the rating in their marketing material and advertising.

The service was developed by the New Zealand Green Building Council with industry input.

As well as the assessment service, there is an online check that people can use as a basic guide to a house and how improvements can be made.

Read more about HomeFit here.