As power prices rise and installation costs fall, more households are considering solar. But the economics depend heavily on your roof orientation, shading, and how you use electricity — and getting the right size system matters more than you might think.
A growing number of New Zealand households are putting solar power systems on their roofs, as the rising price of electricity and the falling price of solar components make the economics more attractive. But have you done the homework before signing a contract?
Households are jumping on solar in growing numbers, though the decision is more complex for renters and those without a home loan.
The Energy Efficiency and Conservation Authority (EECA) estimates annual returns from solar in New Zealand range from 6 to 12 percent in Auckland, 6 to 11 percent in Christchurch, 7 to 14 percent in Queenstown, and up to 10 percent in Wellington — figures that reflect both local sunlight levels and how individual houses are positioned.
Those are notable numbers compared with term deposit rates. But the actual return for any given house depends on factors that are specific to that property.
Is your house suitable?
The ideal solar house has a roof in good condition, oriented between north-west and north-east, with a tilt of at least 30 degrees. Minimal shading is also important — a neighbour's house, a hill, or dense tree cover for part of the year can significantly reduce output and undermine the economics.
"Solar works in virtually all of New Zealand," said James le Page, technical products and systems lead at EECA. "But you might be in the shadow of your next door neighbour's big house or a hill for half the year and all of a sudden the economics don't work out."
Size matters more than you think
A common setup is about 6kW of panels with a 5kW inverter. Some houses, particularly those with electric vehicles or electric hot water, may need much larger arrays.
Mike Casey, chief executive at Rewiring Aotearoa, said some households were not installing big enough systems because their demand for power was likely to increase over time. "They're going with the cheaper option and ultimately then find themselves needing to add more panels later," he said.
Le Page said households should ask installers for a breakdown of how the return on investment was calculated — not just a headline number. "You want to be asking questions of how they come up with those numbers as well."
What to ask before you sign
EECA recommends getting multiple quotes and asking for specifics: the capacity and type of panels, the inverter capacity and type, and the warranties on the equipment. A common mistake is asking for a "5kW system that cost $10,000" without understanding the component breakdown.
"You need to be really digging into the details," le Page said. "You also want to have a breakdown of your return on investment. Quite often with a quote it'll say you use this much power, we expect it to pay for itself and it should scrub out this much of your power bill each month. That's really important."
The houses that benefit most from solar are those that use a reasonable amount of power and can shift usage to when the system is generating — typically mid-morning to mid-afternoon. Having electric hot water, a heat pump, or an electric vehicle makes the arithmetic more favourable.
For households still on gas or a fireplace, the calculus is different. And for renters or those with unsuitable roofs, solar may simply not be practical.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.