Solar Power Systems in Aotearoa New Zealand: Your Choices

In recent years, solar power has emerged as an increasingly popular and viable option for homes and businesses across Aotearoa New Zealand. As the costs of solar technology continue to fall and awareness of the environmental and economic benefits grows, more and more Kiwis are turning to the sun to power their lives.

However, with several different types of solar systems available, each with its own advantages and considerations, it can be challenging to determine which option is best suited for a particular property or energy goal. This comprehensive guide aims to demystify the key solar power systems commonly installed in New Zealand – off-grid, grid-tie, and hybrid/grid-tie with energy storage (ESS) – the energy storage system is almost always battery. By understanding the components, operation, benefits, and limitations of each system type, readers will be better equipped to make informed decisions about their own solar journey.

Whether you’re a homeowner looking to reduce your power bills, a business seeking to boost your sustainability credentials, or a remote property owner aiming for energy independence, this guide offers valuable insights into the evolving landscape of solar power in New Zealand. So let’s dive in and explore the exciting possibilities of harnessing the power of the sun.

 

The Main Solar Power Solutions Installed In NZ

There are several types of solar power systems commonly installed across New Zealand. Each caters to different energy needs, budgets, user preferences and property types.

The three broad categories frequently installed are:

1. Off-Grid Systems – These standalone systems are not connected to the public electricity grid. Instead, the system is designed to generate, store and distribute all the power a property needs, making them ideal for locations without grid access or where installing a grid connection is either not viable or expensive. Off-grid solar systems are also the ultimate in independence, a goal for many people. Off-grid systems typically require a larger array of solar panels, higher capacity battery storage and a back-up generator to ensure a continuous, reliable power supply.
2. Grid-Tie Systems – Grid-tie solar systems, which are connected to the public electricity grid, are the most common solar installation in New Zealand. They use solar panels to generate power during the day, with any excess fed back into the grid for a credit on the owner’s power bill. When the solar isn’t generating enough power, electricity is drawn from the grid as it is for a normal grid-connected property. These systems are cheaper and simpler than off-grid systems, as they don’t include batteries or any back-up power source and grid access provides the benefit of being able to export excess power and import when required.
3. Hybrid Systems – Hybrid systems (also known as Grid-tie with ESS) are connected to the grid but have batteries integrated into the system to store excess solar power. This stored power can then be used during the evening or a grid outage, providing an extra layer of energy independence and security. Some energy retailers are now offering higher export rates to those with batteries who export power during high demand periods on the grid.

The choice of type of system depends on factors like location, energy usage patterns, budget, and desire for independence from the grid. Generally, grid-tie systems are most popular for their balance of cost-effectiveness, economic return and convenience. However, off-grid systems are becoming more viable as battery technology improves, costs decline and grid related charges such as connection fees balloon. Hybrid systems are quickly gaining popularity for the security they provide against grid outages, while still being significantly cheaper than a typical off-grid system.

Regardless of type, most solar systems in NZ are designed to prioritise self-consumption of solar power over exporting to the grid. This is because NZ power companies offer relatively low buy-back rates for solar exports and also often limit the amount you can export. This means it is generally more economical to directly use as much self-generated power as possible. As a result, it’s important to size a solar system based on a property’s actual power usage.

Quick Comparison: Grid-Tie vs Grid-Tie with Energy Storage System (ESS) vs Off-Grid

Off-Grid Solar

Off-grid solar systems are standalone electricity generation and storage systems that operate independently from the public power grid. These systems typically harness energy from the sun using photovoltaic (PV) panels generating DC (‘direct current’) electricity. This can then be converted to AC (‘alternating current’) electricity by passing it through an inverter. AC electricity is what almost all electrical devices are designed to use. Excess electricity is stored in a battery for later use (batteries charge and discharge using DC power so the power still needs to run through an inverter when you come to use it).

An off-grid system must be carefully designed to meet 100% of a property’s energy needs year-round, even during periods of low sunlight. This typically requires a larger array of solar panels and higher-capacity battery storage compared to grid-connected systems. A back-up power source, typically a generator, is usually incorporated into an off-grid system for periods of unusually high power demand or extended poor weather.

The key components of an off-grid solar system are:

• Solar PV panels: Capture energy from sunlight and convert it into DC electricity
• Charge controller (or solar controller): Regulates the flow of electricity from panels to batteries and inverters. They prevent damage to the batteries through overcharging. Most charge controllers also include a maximum power point tracker, or MPPT. Any MPPT controls the voltage output of the panels to maximise the overall power output.
• Battery bank: Stores electricity for use at night, high demand periods or when the solar is not producing enough to meet the loads. Lithium-ion batteries have now generally replaced lead acid/carbon systems due to their superior performance and longer lifespan
• Inverter: Converts DC electricity from batteries or PV panels into 230V AC electricity for use in appliances. Some inverters include a charger, so-called inverter/chargers. These can also convert AC (typically from a generator but it could come from the grid or some other power system) into DC to charge the batteries
• Backup generator: Typically diesel or petrol-powered, these can be turned on automatically or manually when the demands are greater than the PV solar or battery can provide. Once a back-up generator comes on, it will generally be programmed to recharge the batteries before turning off. This allows the system to then operate on battery power rather than constantly turning the generator on and off.

While off-grid systems are generally more complex and expensive than their grid-tied counterparts, they offer unparalleled energy independence and can be the only option for properties too far from existing power grid infrastructure. Sometimes the costs of a grid connection to a site as little as 200 metres from a grid transformer/connection will be so high that an off-grid system is more economical, and there are no ongoing power bills!

Historically popular with remote homesteads, DOC huts, and mobile homes, off-grid solar is becoming increasingly viable for a wider range of rural and semi-rural properties with the fall in equipment costs and improvements in performance.

 

Benefits of Going Off-Grid

There are several compelling reasons why a household or business might choose to go off-grid with solar:

1. Energy Independence: Off-grid solar enables you to generate 100% of your own electricity, giving you complete control over your energy supply. You’re insulated from issues with the public grid like power outages, planned maintenance, or price fluctuations.
2. Cost Savings: While the upfront cost of an off-grid system is higher than a grid-tie system, the long-term savings can be significant. Once the system is paid off, your electricity is essentially free. For remote properties, off-grid solar can also be cheaper than paying to extend power lines from the nearest grid connection point.
3. Environmental Benefits: By generating your own clean, renewable energy, you’re reducing your carbon footprint and minimising reliance on fossil fuels.
4. Reliability: Modern off-grid solar systems are highly reliable, with quality components typically warrantied for 10 to 30 years. With proper sizing and maintenance, an off-grid system can provide dependable power for decades with no ongoing fees or contracts.
5. Flexibility: Off-grid systems can be sized and customised to suit any energy demand, from a small bach to a large commercial operation. They can also be easily expanded by adding more panels and batteries if energy needs grow over time.

Of course, off-grid solar isn’t without its challenges. Higher upfront costs, complexity of design, and the occasional need for maintenance are all important considerations. But for those seeking true energy freedom and willing to make the investment, the benefits of going off-grid can be transformative.

Off-Grid Solar in the Home

Some key considerations for off-grid home solar include:

• Accurate sizing based on household energy consumption
• Quality, durable components from reputable manufacturers
• Backup power provisions for emergencies
• Energy-efficient appliances and mindful usage habits
• Regular system maintenance and monitoring

To maximise the efficiency and lifespan of an off-grid home system, energy conservation and smart power management are key. This can involve using energy-efficient appliances, scheduling power-hungry tasks for sunny periods and monitoring usage with a solar tracking app. Many modern off-grid inverters also have built-in load management features to automatically optimise power consumption.

With careful planning and the right setup, off-grid solar can be a reliable, cost-effective, and eco-friendly way to power a Kiwi home for decades to come.

Off-Grid Solar for Businesses

Off-grid solar is not just for remote homes – with improvements in reliability, it’s also an increasingly viable option for businesses looking to reduce operating costs, improve energy security, and boost their sustainability credentials. Rural farms, eco-lodges or even industrial facilities can often feasibly power their operations with off-grid solar.

The benefits of off-grid solar for businesses are similar to those for homes, but on a larger scale. By generating their own electricity, businesses can significantly reduce or eliminate their reliance on the grid, leading to substantial long-term savings on power bills. The daily power usage profile of a business often also aligns very well with the production of solar PV electricity, allowing relatively more of the power to be consumed immediately and thereby allowing a smaller battery requirement when compared to the solar array – battery still typically being the most expensive component within an off-grid system.

Off-grid solar also provides businesses with a level of energy security, efficiency and independence that can be critical for continuity of operations. With a reliable on-site power supply, businesses are protected from grid outages, brownouts, or other disruptions that can impact productivity and profitability.

Furthermore, making the switch to renewable energy can be a powerful way for businesses to demonstrate their commitment to sustainability and attract eco-conscious customers and investors. With growing public awareness of climate change, many consumers are actively seeking out businesses that prioritise environmental responsibility. An off-grid solar system can be a visible and tangible symbol of a company’s green values.

Specific design is absolutely critical with a commercial application with the system needing to meet the unique energy needs and circumstances of each operation. A large dairy farm, for example, will have very different power requirements than a remote luxury lodge. However, the key components – solar panels, batteries, inverters, and backup generators – remain the same.

Some important factors for businesses considering off-grid solar include:

• Detailed energy audit to accurately size the system based on consumption patterns
• Quality components from established suppliers for maximum reliability and lifespan – you’ll be working the equipment hard
• Adequate battery capacity to ensure consistent power supply during periods of high demand or low sunlight
• Backup power plan for critical operations during emergencies
• Regular system monitoring and maintenance to optimise performance
• Financial analysis of upfront costs vs. long-term savings and ROI

Grid-Tie Solar

 

Grid-tie solar systems, also known as on-grid or grid-connected systems, are the most common type of solar setup in New Zealand. These systems are directly connected to the public electricity grid, allowing them to export excess solar power and import grid power as needed. This two-way flow of electricity provides the benefits of solar while maintaining the convenience of the grid. It also makes it easier to size your system to your budget as smaller systems will just result in the need for more importation from the grid, not a lack of power.

Similarly to off-grid systems, a grid-tie system consists of solar panels mounted on the roof or ground which generate DC electricity. This is then converted to AC electricity by an inverter and used to power the home or business. Any excess solar power not used on-site is automatically exported to the grid, earning the owner a credit on their power bill. Conversely, when the solar system is not generating enough power to meet demand (e.g. at night or on cloudy days), electricity is seamlessly imported from the grid as usual.

The key components of a grid-tie solar system are:

• Solar PV panels: Capture energy from sunlight and convert it into DC electricity

• Inverter: Converts DC electricity from PV panels into 230V AC electricity. This is then fed into your distribution/fuse board to be sent around the electrical circuits in your house for use in appliances, or if there is an excess, back out to the grid

• Import/export meter: Measures the two-way flow of electricity between the property and the grid. As the import/export meter just measures the number of units (1kWh) imported and exported, we often also install an energy meter that allows more detailed monitoring of what is going on at all times
• Grid connection: Allows excess solar power to be exported and grid power to be imported, you’ll generally already have this.

Grid-tie systems are generally simpler and more affordable than off-grid systems as they don’t require large battery storage or backup generators. They are also more flexible, as they can be sized based on available roof space and budget rather than having to meet 100% of a property’s energy needs.

However, grid-tie systems do have some limitations.

Firstly, they typically shut down during a grid power outage for safety reasons, meaning they can’t provide backup power during emergencies. However, some inverters, most notably the Fronius Gen24 inverters, can now be fitted with a so-called ‘PV Point’. This is a power socket which will supply limited power in an outage, provided the PV panels are producing. However, you will need to plug directly into this, it won’t power your household circuits, and it won’t work at night!

Secondly, while this has improved significantly, the economics of exporting electricity to the grid doesn’t always stack up that well. NZ power retailers typically offer buy-back rates between 8c and 17c per kWh for solar exports. As a result, you generally want to size a grid-tie system to maximise self-consumption of solar power rather than large-scale export. Just view the export component as a bonus.

Despite these limitations, grid-tie solar remains a popular and accessible way for Kiwi homes and businesses to enjoy the benefits of solar power while maintaining a connection to the public grid. With a well-designed system and smart energy management, grid-tie solar can significantly reduce electricity bills and carbon footprint without sacrificing reliability or convenience.

Benefits of Grid-Tie Solar

Grid-tie solar systems offer a range of compelling benefits for NZ homes and businesses:

1. Reduced electricity bills: By generating your own solar power, you can significantly reduce the amount of electricity you need to purchase from the grid, leading to lower power bills. This is especially beneficial as retail electricity prices continue to rise. Pay-offs for a well-designed and sized grid-tie system is generally 8-13 years at current power prices and depending on the power usage profile. This is for a system that should last at least 25-30 years.
2. Potential income from solar exports: If your system is generating more power than you use on-site, the excess will be exported back to the grid, earning you a credit on your power bill. While export rates are generally lower than retail import rates, this can still provide a valuable offset to your energy costs.
3. Lower upfront costs than off-grid: Grid-tie systems are typically cheaper to install than off-grid systems as they don’t require large batteries or backup generators. This makes them a more accessible option for those with a limited budget.
4. Flexibility of sizing: With a grid-tie system, you have the flexibility to size your solar array based on your available roof space, budget, and energy goals, rather than needing to cover 100% of your power needs. This allows for a staged approach to solar adoption.
5. Grid backup: By maintaining a connection to the public grid, you have a reliable source of backup power for times when your solar system isn’t generating enough energy (e.g. at night or during cloudy weather). This eliminates the need for expensive battery storage.
6. Reduced carbon footprint: By generating clean, renewable energy, a grid-tie solar system can significantly reduce your household or business’s carbon emissions. This is not only good for the environment but can also be a selling point for eco-conscious customers or stakeholders.
7. Increase property value: A study by Homes.co.nz estimated that a 3kW system could increase the average property value by 4.4% or $35,000 versus comparable properties. Research conducted in Australia suggested increases property price attributable to solar of $6,500 per kWh of installed solar
8. Low maintenance: Grid-tie solar systems are generally very low maintenance, with no moving parts and robust components designed to last 25+ years. Regular cleaning (generally every 2-4 years) is typically the only ongoing requirement.

Of course, grid-tie solar is not without its considerations. The upfront installation cost can still be a barrier for some, although prices have dropped significantly in recent years and sustainable loans with interest rates 0% or 1% are available through all of the major banks. There’s also the limitations in a grid outage to consider, at best you’ll have power from a power socket by the inverter while the sun is shining. This may be a concern for those in remote or blackout-prone areas.

But for the majority of NZ homes and businesses, the benefits of grid-tie solar are clear and compelling. With the right system design and energy management approach, grid-tie solar can deliver significant financial and environmental returns for decades to come.

How Grid-Tie Systems Work

At the heart of a grid-tie solar system is a two-way connection between the on-site solar array and the public electricity grid. This requires a ‘grid-compliant’ inverter, an inverter approved for connection to the grid by the lines companies. A grid-compliant inverter includes critical electronic mechanisms to ensure power isn’t fed into the grid during a grid outage; this could put lines people working on the grid at serious risk by livening wires thought to be not live.

Here’s a step-by-step look at how a typical grid-tie system works:

1. Solar panels generate DC power: An array of photovoltaic (PV) panels mounted on the roof or ground captures sunlight and converts it into direct current (DC) electricity. Panels are connected in series to form ‘strings’. One string, or multiple strings connected together in parallel, are then fed into an inverter.
2. Inverter converts DC to AC: The DC electricity from the solar panels is fed into a grid-tie inverter, which converts it to alternating current (AC) electricity that is compatible with the home or business’s electrical system and the public grid. The inverter also synchronises the solar-generated electricity with the grid’s frequency and voltage to ensure smooth integration.
3. Solar power is used on-site first: The AC electricity from the inverter is first directed to the property’s distribution/fuse board, where it is used to power appliances, lighting, and other electrical loads. This on-site consumption is prioritised over exporting to the grid, as it directly reduces the amount of electricity that needs to be purchased from the energy retailer.
4. Excess solar is exported to the grid: If the solar system is generating more electricity than the property is consuming at any given moment, the excess is automatically exported to the public grid through the import/export meter. This export is measured in kilowatt-hours (kWh) – the same as imported power – and credited to the owner’s electricity account.
5. Grid power is imported as needed: When the solar system is not generating enough electricity to meet the property’s demand (e.g. at night, on cloudy days, or during periods of high usage), additional power is seamlessly imported from the grid through the import/export meter. This ensures a reliable and uninterrupted supply of electricity, even when the solar system is not producing.
6. The import/export meter tracks imports and exports: A bidirectional import/export meter measures the flow of electricity in both directions – from the grid to the property and from the property to the grid.
7. Monitoring and maintenance: Most modern grid-tie systems come with monitoring software that allows the owner to track their solar generation, consumption, and export in real-time. This can help identify any performance issues and optimise energy usage. Regular maintenance, such as cleaning the panels, helps ensure the system operates at peak efficiency.

It’s worth noting that the exact mechanisms and economics of grid-tie solar can vary depending on the tariff structure the retailer provides and the usage profile of the user.

Regardless of the specific arrangement, the basic principle of grid-tie solar remains the same – generating clean, renewable energy on-site to reduce reliance on the grid, while maintaining a reliable grid connection for backup and export. With a well-designed system and favourable utility policies, grid-tie solar can be a cost-effective and low-maintenance way for NZ homes and businesses to take control of their energy future.

Hybrid/Grid-Tie ESS Solar Systems

 

 

Hybrid solar systems, also known as grid-tie with energy storage (ESS) or grid-tie battery backup systems, combine the best aspects of both grid-tie and off-grid solar. Like standard grid-tie systems, they are connected to the public electricity grid, allowing for the import and export of power. However, they also incorporate a battery bank, enabling them to store excess solar energy for later use, similar to off-grid systems.

This stored energy can be used to power the home or business during the evening, on cloudy days, or during a grid outage. As a result, hybrid systems provide an extra level of energy independence and resilience compared to grid-tie only systems, while still maintaining the convenience and reliability of the grid connection.

With the advent of variable export tariffs from retailers such as Octopus Energy, batteries can even be used to take advantage of more favourable export tariffs at certain times of day.

The key components of a hybrid/grid-tie ESS solar system are:

• Solar PV panels: Capture energy from sunlight and convert it into DC electricity
• Hybrid inverter: Converts DC to 230V AC electricity while also managing power flows between solar PV panels, batteries, home appliances, and grid
• Battery bank: Stores excess solar energy for later use
• Import/export meter: Measures the two-way flow of electricity between the property and the grid. As the import/export meter just measures the number of units (1kWh) imported and exported, we often also install an energy meter that allows more detailed monitoring of what is going on at all times
• Grid connection: Allows excess solar power to be exported and grid power to be imported, you’ll generally already have this.

How Grid-Tie with ESS Systems Work

Hybrid systems operate on a “solar first” principle, where the energy generated by the PV panels is first used to power the immediate needs of the home or business, with any excess then used to charge the batteries. Once the batteries are full, additional excess is exported to the grid. When solar production is insufficient to meet demand, the batteries are discharged to make up the shortfall. If the batteries are depleted, power is imported from the grid as needed.

Other demands can also be included into this equation, such as EV chargers and hot water diverters. The user can decide whether, once the immediate household or business demands are met, whether the excess power is used first to heat the hot water, charge the car or charge the batteries.

 

Grid-Tie ESS Benefits

One of the key benefits of a hybrid system is the ability to time-shift solar energy from the daytime to the evening peak usage hours. By storing excess solar in the batteries during the day and discharging it in the evening, homeowners can reduce their reliance on the grid during the most expensive peak tariff periods. Some hybrid inverters even offer “peak shaving” and “load shifting” functions to automate this cost-saving process.

Hybrid systems can also provide backup power during grid outages. Most hybrid inverters automatically isolate the home or business from the grid during a blackout and continue to operate using solar and stored battery power. This can be a huge advantage for those in areas prone to extreme weather events or an unreliable grid. Typically a system will be set to maintain a certain level of battery charge in case of grid outage, e.g. the system might start using grid electricity when the batteries have 65% of their charge remaining so that if there is an outage, this stored power can be used.

Of course, the addition of batteries does increase the upfront cost and complexity of a hybrid system compared to grid-tie only. However, with the rapidly falling cost of lithium-ion batteries and the development of new energy storage technologies, hybrid systems are becoming an increasingly attractive and affordable option.

Summary

Ultimately, the choice between grid-tie and off-grid solar comes down to the individual circumstances and priorities of each project.

Factors like location, energy usage, budget, and desire for independence will all shape the decision – for NZ homeowners and businesses looking for a solar solution that combines the energy independence of off-grid with the convenience of grid-tie, a hybrid/grid-tie ESS system is well worth considering.

With the right system design and component selection, a hybrid solar setup can provide reliable, sustainable, and cost-effective power for years to come, while also future-proofing against rising electricity costs and grid disruptions.