Thursday 6 November 2014

So much for solar in NZ!

Meridian cuts solar 'subsidy'

Further shadows have been cast on the solar power industry after a second major electricity supplier cut its buy-back rate for new customers.

More than 2000 New Zealand households are now using solar energy to power their home. Photo / Getty Images
More than 2000 New Zealand households are now using solar energy to power their home. Photo / Getty Images
6 November, 2014

Meridian Energy will today announce it has cut its buy-back rate for customers generating solar power to nearly a quarter of its existing rate, following competitor Contact Energy's drop earlier in the week.

Users of renewable energy - such as solar or wind - use the electricity to power their homes or businesses, and can sell back any excess electricity to their supplier, to be used on the national grid.

Meridian Energy currently buys solar electricity at 25 cents a unit for the first 5 kilowatt hours generated, and 10c after that.

But today the rate for new customers has been cut to 7c/kWh during summer, and 10c in winter.

General manager external relations Guy Waipara said after Contact Energy slashed its buy-rate by more than half, from 17c/kWh to 8c, Meridian had been left with the most attractive rates in the market.

But solar energy uptake was becoming more popular, which meant it was increasingly important for Meridian to get its rates right to stop encouraging "wrong, unsustainable, uneconomic things to go on".

"We're paying a solar customer three to four times what the energy would cost you to buy from the market, which all comes from say a wind station or a hydro station or a geothermal plant.

"And we really struggled to see the rationale for keeping rates at that level of basically subsidy."

As such, Meridian had dropped its solar buy-back rate to a rate which reflected the cost of any form of electricity on the market.

The summer rate would apply from October to April, and was cheaper to reflect the fact electricity was generally cheaper at that time of year.

Installations of home solar power systems have nearly quadrupled since 2011.

At the same time, the average price has dropped by about 36 per cent - such that a typical system now costs about $10,000.


Meridian Energy currently has about 2500 solar customers.

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