Contact Energy and Meridian’s announcement to significantly lower buy-back rates from solar PV this week has caught the headlines and created a bit of storm. While it’s disappointing that power companies keep shifting the goal posts on buy-back rates, thus complicating peoples’ investment decisions, solar still makes a lot of financial sense.
There’s been a bit of hysteria from people exclaiming the reductions equates to some sort of mortal wound to the solar industry. This couldn’t be further from the truth. While a higher buy-back rate would improve the business case for solar PV, it’s already exceptional without subsidies.
Every week Solar Electric Technology installs systems with returns on investment ranging from 10-20%! Pay back periods are now down to six or seven years, sometimes lower. The most important aspect of making solar PV financially attractive is using the power produced onsite. If this can be achieved the majority of the time, it will work, if it can’t it probably won’t – it’s not rocket science.
There are new technologies such as the NZ made ImmerSUN from Enasolar which work with appliances such as hot water cylinders to make sure they are charging on solar power during the day to minimise the amount of power exported to the grid. Clothes washing, dish washing, and electronic charging can all be done during the day. Solar can be made to work for most households.
Businesses primarily use power during the day and their returns from solar are generally better than for households. Businesses hit the sweet spot of being able to install larger systems, meaning less expensive per unit costs and economies of scale combined with power being consumed onsite during the day.
It would be great if power companies stopped changing their minds every five minutes so better informed market decisions could be made. In the meantime – just cut the power companies out during the day by going solar. Make a sound financial investment and lower your carbon foot print. It’s a win-win.
Interested in how solar cold work for you? Check out our solar PV packages.