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SEANZ clarifies benefits of solar to low-income earners

16 March 2018 1pm

SEANZ clarifies benefits of solar to low-income earners and NZ electricity sector

The Sustainable Electricity Association NZ (SEANZ) today moved to clarify the impact of solar and battery storage on low-income earners and to reiterate the financial, social, and environmental benefits to all kiwis of a hastier transition to smart distributed energy technologies contained in an earlier report.

The organisation was responding to comments made by the new Energy Minister Megan Woods at the Downstream Energy Conference this week that “solar panels and distributed generation mean that more people who can afford to are able to draw less electricity from the grid, pushing the price of electricity up for everyone else”.

SEANZ commissioned an independent report* in 2016 showing that:
• The uptake of solar PV had a negligible increase in the cost of delivering electricity,
• Had broader societal benefits,
• Had financial benefits for all other households via longer-term reductions in peak demand, network size and GHG emissions.

A number of SEANZ members operate business models that offer solar and solar/battery storage packages with no or minimal upfront costs, enabling low-income earners to save substantively on their power bills.

SEANZ Chairman Brendan Winitana said “The myth that solar is only for the well-heeled is simply out-of-date. We have data that shows the median income of households installing solar on no money up front plans is $75,000, lower than the national median household income. These households are saving beyond 35% off their monthly power bills.

“The view that blames the rising cost of delivered electricity on the uptake of solar PV has also been well and truly dispelled. Solar water heaters, insulation, and other energy efficiency measures have had a far greater impact on demand than solar PV. In fact, according to MBIE data, average household electricity use has been declining since 2009, which is three years before solar PV uptake had a noticeable effect.

“That these myths persist in the face of contrary evidence raises the importance of having relevant and up-to-date data and advice circulated by government agencies,” said Mr Winitana.

At current levels of solar PV uptake, the reduction in income to lines and distribution businesses from avoided network charges is insignificant relative to total revenues. In 2016, this was around $2.3 million or 0.2% of the maximum expected revenues set by the Commerce Commission for lines and distribution businesses subject to default price-quality regulation in the same year ($1.16 billion in 2016).

Solar PV presents the perfect opportunity to implement the energy efficiency and load management options that not only provide direct benefits to the households concerned (both financial and quality of life through improved housing stock), but also by flattening the load curve there are significant benefits to lines and distribution businesses, Transpower and New Zealand as a whole.

“By 2040 New Zealand solar households could have saved between $NZ 1.35 - 3.4 billion and the benefits are not restricted to just solar PV owners,” Mr Winitana said.

By 2016, solar households had already saved the country NZ$ 860,000 in avoided greenhouse gas emissions. MBIE modelling shows that solar installed with batteries will become the norm and that avoided greenhouse gas emissions costs could save New Zealand an estimated NZ$ 0.5 billion between 2016 and 2040.

“The Government must now focus on how to make the most of the coming opportunities driven by increased customer choice, and customers seeking control of their position, rather than by selectively penalising specific new technologies. Maintaining the status quo will likely leave customers with a legacy of sunk costs which they will have to pay for, locking New Zealand into old technology and old business models,” said Mr Winitana.

An independent report commissioned by SEANZ members. Download:


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