Political parties across the spectrum are turning their faces to the sun this election in search of ways to give New Zealanders some relief on their power bills.
Both National and Labour have promised low-interest, long-term loans that are repaid through rates, and Labour’s proposal goes one step further by offering loans through lines companies. These would be paid back through power bills and underwritten by the Crown.
The Greens have proposed zero-interest clean-energy loans to install solar panels and batteries for up to 90 percent of homeowners.
Managing editor of Newsroom Pro, Jonathan Milne, says the idea behind the schemes isn’t new.
“This is a scheme that’s actually been designed from outside Parliament and outside the bureaucracy in Wellington. It’s called a Ratepayer Assistance Scheme and it was put forward by councils around the country.
“There’s 67 of them plus the regional councils and they’ve been trying to look at ways of helping keep ratepayers afloat through difficult times and rising cost of living. And also to pay for small-scale infrastructure, [which] could be solar panels or batteries or insulation in your roof.”
Designed by Local Government New Zealand, Local Government Funding Agency, Rewiring Aotearoa and other high-powered consultants, the scheme has three parts to it.
The first leg is the low-interest energy loans, and the second is allowing homeowners to postpone paying their rates until they sell their home.
The third part is allowing developers to delay paying their development levies so they can be paid over time or passed on to whomever buys the property.
Political parties have only campaigned on the first leg though, and Milne says that the scheme needs all three to work. “By having all three of those legs it really gives the scheme scale. It means that you’ve got a whole lot of money going through it.
“The people who’ve designed it think it needs to be worth about five billion dollars to make it cost effective, otherwise just the start-up costs of setting up the infrastructure and designing the loans agreements and … maybe hiring one or two staff, that initial start cost just won’t be cost-effective unless it’s got that big scale, that five-billion-dollar-scale.”
Milne says Local Government NZ went to the Government in 2022 about the plan but hadn’t made much ground until now.
So why are politicians only now running with part of the ratepayer assistance scheme?
‘The cost is coming down for solar panels and for the batteries, which really gives it extra bang for its buck,” says Milne.
“We’ve seen a couple of dry winters where power prices have soared, we’ve seen a slowdown in gas and increased reliance on expensive imported Indonesian coal.
“It’s all looking a bit messy if you’re buying your power off the grid at present.”
But how soon would you see a difference in your power bill if you installed solar panels?
Nirmal Nair from the Faculty of Engineering and Design at the University of Auckland says homes would notice the savings immediately.
“It would be instant because then you will be consuming your own power. After seven years you might have recouped your cost,” he says.
Along with saving money, solar panels allow homes to have added electricity security during bad weather, says Nair.
“Suppose there is an outage for three days or because of a storm or something like that, if you have solar and battery together then until the grid comes back again, you could be a little bit sufficient.”
However, investing in batteries may not be the best option for everyone.
Nair says just investing in the solar panel system first is a good place to start before looking at batteries, which cost upwards of $7000.
“You don’t need a battery in Auckland or Wellington or Christchurch, but if you’re in some rural place which has a lot of these tricky weathers … in that special case you might make that extra investment.”
Despite all the campaign promises, there may be a hitch: Milne says our lines might not be built to handle power being fed back into the grid.
“What we’re asking it to do now is to have a little generator, a little Huntly power plant – or should I say, a little solar power plant – on the top of every one of our roofs and to feed both to our own homes which is okay, which is easy, but also to feed back into the grid,” he says.
“So, if I’m generating more power off my roof than I need at a time of day, then I can sell it back into the grid. And that’s both a pricing problem, making the finances work, but it’s a technical problem as well.”
Milne says a report done by the Security and Reliability Council, which is the watchdog of Transpower and the Electricity Authority, says there’s worry in the sector.
“It’s done this public-facing report for the first time and it’s also been having backroom discussions with the Transpower and Electricity Authority and there’s quite a lot of concern about the rate at which they can do this work and whether it’s going to work.
“The Security and Reliability Council has warned of catastrophic consequences if the electricity sector can’t adapt to this two-way power system, to this dispersed power being fed back into the system. And the companies, Transpower and the Electricity Authority, they’re worried.”
Check out how to listen to and follow The Detail here.
You can also stay up-to-date by liking us on Facebook or following us on Twitter.
