What is solar PV?

Solar PV systems convert sunlight into electricity. Light energy (photons) hits solar panels, which are usually placed on a roof facing the sun.

The photons excite the electrons in a semi-conducting material (such as silicon), producing an electric current. Solar electricity systems are also known as photovoltaic or PV systems.

Benefits — one side of the equation

The cost of installing a solar PV system has been falling for many years. If it doesn't stack up for you now, it may make financial sense in the future.

  • They're better value if you're at home during the day. Using appliances (washing machine, dishwasher, vacuum cleaner) during the day uses the electricity you generate.
  • They can charge your big power-users. Hot water, electric vehicles, swimming pools, spas and hot tubs can all be connected to your solar PV system.
  • You can sell excess electricity to a retailer. However, you earn less than you’d pay to buy it from a retailer.
  • Solar panels still work on cloudy days. They perform best in regions with high sunshine hours (such as Nelson/Marlborough), but they work across the country.
  • A long-term solution. The life expectancy of a solar panel is 25 years, with minor maintenance.

The other side of the equation

These factors can make a big difference to whether solar electricity is the best investment for you.

  • They don't generate electricity at night, and produce less in the winter. To use electricity after dark, you’ll need to buy it as usual or install a battery system at additional cost.
  • Interest can impact viability. The interest charged on money borrowed to buy solar, or interest lost on savings used, has a significant impact on the financial viability of solar.
  • Buy-back rates are lower than the cost of buying electricity. This means you get better value from using your solar electricity than selling it to a retailer. You’ll need to shop around to find the best deal.
  • Electricity prices may change. This may reduce the financial value a household gets from solar.
  • The amount of electricity generated reduces over time as the panels degrade. Check solar panel warranty details before you invest.
  • You will likely need to replace the inverter. While the panels should last 25 years, the inverter likely will not.

  • Grid-tied

    Most New Zealand houses with solar panels stay connected to the electricity grid. They pay for electricity when the solar system doesn’t generate enough electricity – like after dark.

  • Off-grid

    Installing batteries means you can store electricity for use when your panels do not generate enough. Battery prices are falling, but it still won’t make economic sense for most households.

Assess the value of installing solar panels on your home

Use our solar tool to assess the estimated financial return of solar electricity for your house, based on a number of assumptions explained in your final report. You’ll need a recent electricity bill and 10-15 minutes.

Use the solar tool(external link)

There are other ways to have a bigger impact

Our electricity system is already highly renewable, with about 80% from sources such as hydro, geothermal and wind. This means switching to solar is likely to have a lower impact on greenhouse gas emissions than in other countries.

You will probably reduce your greenhouse emissions more effectively by switching to an electric or more fuel efficient vehicle, or being more energy efficient in your home.

Efficient energy use

Electric vehicles

More information