Residential solar and small-scale generation is on the rise in New Zealand, providing households with a range of electricity monitoring and management options and opening the way for a potentially more diverse marketplace.
Recently released Electricity Authority figures show that across the country more than 15,000 homes are generating their own electricity (via solar, wind power and small-scale hydro), with almost 3,300 home owners having installed solar panels this year, up more than 10 per cent compared to the same period last year.
In turn, new opportunities for households are beginning to open up, with the emergence of new market models, such as peer-to-peer electricity trading, providing consumers with a greater range of choices.
Meanwhile, residential battery storage systems, working in conjunction with solar systems, represent an area of great potential, allowing for enhanced household monitoring and management of electricity usage.
“In the last year residential battery storage has started to become a reality in New Zealand,” Electricity Authority Chief Executive Carl Hansen commented. “Meanwhile, the ‘internet of energy’ idea is coming to life and giving consumers the ability to truly control energy use at home.”
Amid the development of new technology, and the evolving energy marketplace, what should consumers keen on tapping into the benefits of small-scale generation keep in mind?
New technology delivers new opportunities
In its recently released Multiple Trading Relationships consultation paper, the Electricity Authority observed that technologies such as solar panels and batteries, along with improvements in data collection and analysis, “are triggering change to the electricity industry and markets”.
“These changes mean consumers are more capable of choosing when and how they use electricity,” the Electricity Authority stated. “Consumers can use solar panels and batteries to participate directly in the market as sellers of electricity and related services.
“At the same time, suppliers are offering innovative products and services that realise the benefits of technologies like batteries and solar panels and take advantage of the improvements in information and communication technologies.”
Certainly, the capacity for households to generate solar energy, and the increasing number of households choosing to do so, is providing consumers with more control and choices over their energy usage, while seeing the emergence of new services in the marketplace.
The growing number of households installing solar panels widens the market for residential battery storage systems, and with battery technology evolving and concurrently falling in price, storage systems are also becoming a more economic proposition for an increasing number of households.
This in turn provides consumers the choice of either storing solar-generated energy or feeding it back into the grid, with smart technology providing for further electricity usage monitoring and management oversight.
For instance, via a desktop or mobile, consumers may be able to actively manage their household usage, monitoring their current and historical usage, and deciding whether to store energy or feed it back into the grid.
New market models
In conjunction with the introduction of new technology, new market models are emerging, reinterpreting the traditional retailer-customer relationship.
Whereas previously households with solar panels had the option of feeding excess energy back into grid under a solar feed-in tariff, an increasing range of options are now becoming available, allowing consumers to play a more proactive role.
“A more dispersed model is emerging as technology and new business models let consumers choose to actively participate and interact with electricity services companies to buy or sell electricity services,” the Electricity Authority stated in its consultation paper. “This model is challenging the assumption that a consumer wants or needs a single retailer to provide all of their electricity-related services at a single location.”
Among the new market models emerging is peer-to-peer trading, which is well established in other industries – with this model allowing for individuals to interact with each other via a digital platform (such as eBay or Uber), providing the facility to both buy and sell goods and services.
Under the peer-to-peer model, options open up for consumers with solar panels, who could choose when and at what price to sell their excess energy, while consumers without solar panels could use a peer-to-peer platform to buy local renewable energy generated by other households.
Employing this concept, P2 Power’s SolarShare peer-to-peer system provides for customers without solar panels to access solar energy, while customers with solar panels can earn by exporting their power, with P2 Power stating that it prioritises local, renewable sources.
“Local people in your community are generating cheap, renewable power on their roofs and in their backyards,” P2 Power states. “They often produce too much power to use themselves. P2 Power lets you buy their excess power directly, so everyone can benefit from green local electricity generation.”
Virtual power plants (VPPs), meanwhile, which are capable of drawing on an array of sources (including small-scale residential generation) in managing supply and demand, are another new market model that has been enabled by the introduction of new technology.
Earlier this year, energy generator and retailer Contact Energy advised that it would run a VPP trial in Wellington, employing solar and battery technology, with it “designed to support Wellingtonians in the event of a natural disaster”.
“In the future, the companies involved in the partnership hope the technology could be used to give customers the choice of sharing stored energy between homes,” Contact stated.
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Keen on renewable generation?
Consumers keen on installing solar panels should consider what sort of value a system will provide over time, looking beyond the upfront cost of a system, and talk to solar experts in determining the best approach for their household.
A good starting point is the Energy Efficiency and Conservation Authority’s Energywise website solar calculator, via which users will need to answer a number of questions, helping to assess the suitability of solar for their household.
When it comes to installing and using a system, Energywise recommends:
- Sizing the system to match your electricity use – with a system ideally sized so that most of the energy generated is used by a household rather than being sold to a retailer.
- Position panels to face the sun, with no shade – panels should face north as much as possible, ideally with no shading.
- Using appliances during the day – increasing the amount of solar electricity used and decreasing the amount purchased from a retailer.
- Maintaining your system – panels should be periodically cleaned, removing dirt and debris, for best performance.
- Using a solar expert to install a system – using SEANZ (Sustainable Electricity Association of New Zealand) members to provide advice, quotes and undertake solar installation work.
Of course, additionally installing a battery storage system will provide further usage flexibility, and, as with solar panel systems, consumers should weigh up the short-term costs and the long-term benefits.
There are a number residential storage systems available, and consumers should consider their individual circumstances, shop around, become familiar with the different technologies and systems being offered, and talk to industry experts in deciding the best way forward.
If a residential storage system is not an economic decision to make now, given the pace of change in the market, this could change in the near future, and it is certainly worthwhile keeping an eye on developments in the market and regularly reassessing the options on offer.