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The NZ Government’s Involvement In The Solar Power Industry

By Kristy Hoare on in Solar Power News In New Zealand

The NZ Government’s Involvement In The Solar Power Industry

Solar Panel Installation In Auckland, New Zealand

New Zealand might be well-known for its gorgeous shorelines and the love for rugby, but solar power is not the first thing that comes to mind when talking about our wonderful country.

Therefore, a frequently asked question we get is ‘What is the NZ Government doing to help encourage solar?’  The short answer is, not much.  The long answer is a short read below.

Are There Subsidies For Solar Power In New Zealand?

Financial incentives such as direct subsidies have played a pivotal role in boosting solar power in many countries worldwide. Unfortunately, there are no subsidies or feed-in tariffs for solar power in New Zealand, and there never have been.  Nor is the current Labour Government campaigning for any new solar policies at present.

Published in Labours 2020 Manifesto they have a mere one mention to solar, which goes like this: 

Labour will investigate regulatory or market barriers to increase the uptake of solar electricity generation.

There hasn’t been any regulatory changes as of the time of writing this article, November 2022.

Launched back in 2007, there was a Government subsidy for solar hot water systems, but this (solar thermal) is an entirely different technology from solar power (photovoltaics).  The incentive granted consumers $500 towards a solar hot water system, which saw a short boom in the uptake of solar water heaters. This subsidy ended in 2012, which also saw the end of many solar hot water installation businesses around the country.

Currently, the Greens Party are campaigning for solar-related policies.  Their first policy is to introduce low-interest loans for solar power, which now seems redundant, given that most banks offer loan interest loans for solar power.  

The Green’s second policy broadly sets out standards and guidelines for introducing technologies such as solar and batteries in building designs.  However, most points in the policy sound overly generic, even vague. Therefore, how well the second policy encourages the uptake of solar power, will depend on its details, which aren’t publicly available.

Why Aren’t There Subsidies For Solar In New Zealand?

For the NZ government, there lies a conflict of interest in promoting solar power. Without beating around the bush, the Government owns a majority share in the large centralised energy power stations, which sells power to consumers on an ongoing basis.  If consumers are empowered to produce their own energy (via solar power), the Government will have reduced income from the energy giants.

Hence, under both Labour and National Governments there has been little appetite for encouraging solar power.

Around 80% of New Zealand’s power generation currently comes from renewable energy sources.  The Labour government does have an ‘aspirational’ goal to become 100% renewable by 2030, their plan is largely to phase out coal-fired plants and boilers.  

Labour don’t have a plan to replace the fossil fuel generation, other than their Lake Onslow project which if it went ahead, it won’t be completed well past 2030, possibly closer to 2040. But filling in the blanks here, I think their plan is to leave it up to the market to replace generation by fossil fuel, which could happen. A large amount of utility-scale solar and wind has been consented, and these projects alone could help New Zealand reach 100% renewable energy within the next 10 years.

Labour Government’s Māori and Public Housing Renewable Energy Fund

The only incentive to boost the amount of solar power in New Zealand has come from the Labour party’s Māori and Public Housing Renewable Energy Fund.

In 2020, the Government announced a trial installation of renewable technology, such as solar panels and batteries, on public and Māori housing with a $28 million fund.

The funding is being allocated to selected projects over 4 years until mid-2024 through multiple funding rounds. 

So far fifteen initiatives have been granted funding for renewable energy projects in the Fund’s first round ($2.8m). 

Update for 2023: The NZ Government has installed a 200kW solar array on Parliament House - a step in the right direction.

Showing 6 comments

Posted by Stephen on 4th Apr 2024 10:05:53

I have an EV (unsubsidised 2nd hand leaf) and will get solar when I've replaced my roof. Subsidies are not needed because these items are already more economical than alternatives. If you can mortgage (a sensibly sized) solar installation, then the savings will more than pay the interest. If you can, then solar zero will put it on for a monthly charge. I reckon you've got a >90% chance that you'll be earning money off that day zero. So make a plan and do it. As for RUCs on EVs now - I'm only saving $1000-2000 per year instead of $3000-4000 in petrol (and even more in maintenance). Second hand leafs still pay for themselves in under 10 years - free car!

Posted by Kristy on 5th Feb 2024 13:18:04

Hi Tony, Yes, this definitely gets in the way of the government supporting solar energy. But they do understand a lot more new generation needs to be developed quickly to electrify NZ.

Posted by Tony on 3rd Feb 2024 08:17:28

Just read that the Government owns the power station that provides electricity, therefore the government can't support solar power as it would be a conflict of interest, cutting their profits from the sales of electricity.

Posted by Mike Friend on 21st Apr 2023 11:22:47

I think it is outrageous that the very people who need access to solar power to reduce their energy bills are unable to afford to install this technology.

Posted by Kristy on 19th Apr 2023 13:29:41

Good point Michael... I wish I could answer your question.

Posted by Michael Friend on 19th Apr 2023 11:23:56

Why isn't the Labour government providing subsidies for solar power installation? It's a case of those who can afford new technologies such as solar power and e cars probably don't really need the savings and those who do can't afford to buy into these schemes!

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