Is solar right for your home?

Solar is the cheapest source of energy a New Zealand household can use. Explore how solar can keep your power bills down, and whether it's a smart investment for your home.

Benefits of solar

• Save money on power — Solar panels generate free electricity, so you’ll spend less on power and be less affected by rising energy prices.  
• Power your high energy users — Hot water, electric vehicles (EVs), swimming pools, spas, and hot tubs can all be powered by solar.
• Increase your resilience — Generating your own power makes you less reliant on the electricity grid.
• Receive a good return — Solar panels will provide a decent and reliable return on investment for many New Zealand homes. In the right circumstances, they can pay themselves off in as little as 7 years and then deliver free energy for the next 20.

Getting the most out of solar

Solar performs well across New Zealand, even on cloudy days. These factors will help you to get the most out of it.  

• Mostly using electricity during the day — Solar panels only generate electricity when it’s daytime, so using as much solar power as you can during the day will improve your return on investment. After dark, you can buy electricity from the grid as usual, or use what's stored in a battery if you have one. 
• Mainly running electric appliances — The more of them you use, the greater the savings from installing solar. Hot water and heating are major contributors to power bills, so if you use gas or firewood, consider switching to electric appliances ahead of going solar. 
• Having a suitable roof or outdoor area — Solar panels perform best when facing north with minimal shading, and a tilt of 35° or more. It’s helpful if your roof is in good condition, as the panels could be up there for 25 to 30 years. For homes with enough outdoor space, panels can be mounted on the ground instead.

How much solar costs 

Prices for solar systems have gone down over time, making them more affordable than ever. The installation cost depends on: 

• the specifics of your home, such as access to the roof 
• the size of the solar panel system you want 
• whether you include a battery for storing electricity.

Panels and installation

For a 5-kilowatt (kW) solar installation, expect to spend around $10,000 (including overheads and GST). 

Smaller systems of 3–5 kW can work well financially for typical New Zealand households. This size can produce up to 90% of the energy needs for an average 3-person household with all electric appliances, people at home during the day, and no EVs (EECA analysis). 

If you’ve got an EV and can charge it during the day, a larger installation is likely to be worthwhile. 

Optional battery for storing electricity 

The cost of installing a battery varies depending on its type and capacity, but is typically between $5,000 and $15,000 (incl. GST).  

With a battery, you can store energy to use at night, reducing the need to buy it from the grid.  

You can also use your stored electricity during a power cut if your installation is configured for this purpose. 

Financing options for solar

Most New Zealand banks offer low-interest financing options and home-loan top ups for 'green energy' projects like solar panels. 

How you choose to finance your solar panels makes a big difference to the financial viability of installing them. In short, the higher the interest rate, the longer the payback time. 

For homeowners, there are zero interest (or very low interest) green loan options available on top of a mortgage. This type of loan can often be paid off well before the warrantied lifespan of the panels.

Make sure you understand the terms and conditions of any finance provider and get independent advice when needed.