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Energy retailers; Why don't they buy solar power at a good price?

By Kristy Hoare on in Solar Power New Zealand

Energy retailers; Why don't they buy solar power at a good price?

One question we are asked almost daily is "Why don't New Zealand energy retailers pay a better price from solar power owners?". Right now, the average buy back rate for solar power is between 8 and 10 cents, roughly the wholesale price for power.

Remember, solar power that is sold back to energy retailers, is clean and green, and it is made close to where the power will eventually be consumed (i.e. doesn't experience power loss travelling from the south to the north island, and doesn't incur extra transmission costs).

The current New Zealand Government, unlike many other western countries or regulating bodies, has not enforced a fair price for buying solar power from consumers. Therefore, energy retailers have the freedom to charge what ever they like.

The Green Party tried to introduce a fair price for solar power, but this did not pass in parliament.

A large part of the reason why distributed solar power doesn't get sold at a fair price is because of the hours at which it is being sold to the grid. More often than not, it is during the middle of the day when there is not a high amount of energy demand.

Buy back rates are also affected due to overall demand for electricity dropping off in New Zealand over the last few years. And its not surprising, when the NZ Government has such close ties to the energy industry, why would energy retailers want you to be producing what they are trying to sell you?

This will change once more people have battery units installed in their homes. This way, they will be able to store their solar power rather than export it straight to the grid. Energy retailers will pay a much higher price to be able to tap into your power at times when power is in high demand. You can also have the ability to set the price at which you are happy to sell to the grid, otherwise you may as well keep it for yourself. Indulge in all of the guilt free renewable energy you have created, sticking it to the man never felt so good.

If the energy retailers aren't going to pay you what your power is worth... keep it, install a LG Chem lithium-ion battery pack (now available in NZ with similar specs to the Tesla Power Wall), or put timers on your appliances to make sure they turn on when the sun is out. As a last resort, or a first resort if you have the means, go off the grid completely.

There's only so much we can take as large companies try to control us and force us to spend our hard earned cash on the worlds highest electricity bills.

Showing 2 comments

Posted by Nicky. on 13th Aug 2016 20:15:05

The surplus PV power you send back to the grid and get paid about half price for goes no further than to your nearest neighbours, who are of course charged full price for it. The retailer thus enjoys the profit from your investment, for doing nothing more than sitting back.

Posted by Ian Williamson on 14th Jul 2016 12:15:50

While I would like to be paid a higher rate for feed in tariff it is clearly not in the power retailers interest to do so.
If the retailer is buying power from the grid at 5-10 cents/unit to sell to you with all the other charges from lines companies, electrical authority and some margin added to it, why would they pay you 30 cents as they were for a while. NZ has 80% renewable power and there is less incentive to add more compared to UK who have only about 45% renewable. Even in the UK now most of the feed in tariffs have been stopped or seriously reduced for all but industrial sized installations.
The feed in tariff is unlikely to increase -ever.
You are better off to just use all your solar power yourself and /or store it in some form like hot water which is cheap and requires no grid connection therefore no additional "tax" from the lines company.
Battery systems are good but not cheap enough yet for a realistic return on investment if you can't install them yourself. This will improve.
As the average number of years a NZer lives in a house is only 7 years the payback needs to be better than that to have some years "free" to reap the benefits.

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