A solar tax makes it harder to go green in the short term, but could drive more customers off grid as the appeal of solar power grows
I was astounded to learnt the Hawke's Bay power lines company, a monopoly called Unison, has announced increased line charges for households generating their own electricity. This "solar tax" runs counter to New Zealand's attempts to reduce its greenhouse gas emissions and is one of the most stupid business decisions I've heard of in a very long time.
Around the world, governments from Algeria to Ukraine and dozens of countries between them in the alphabet have been encouraging “distributed energy generation”, like solar panels on houses, to reduce their reliance on fossil fuels and CO2 emissions.
With the government looking the other way, New Zealand’s privatised electricity generators recently moved to deter distributed generation by slashing feed-in tariffs. Feed-in tariffs are the prices power companies pay to buy excess electricity generated by households, farms and businesses and are an encouragement for power consumers to generate their own electricity.
In August 2015 The Green Party revealed that Contact and Meridian had reacted to the growth of household solar power generation by slashing their buy-back rates by 50-72 percent. My mate who installed a solar powered beach-house at Waimarama, only to see his feed-in tariff heavily reduced to the point that any duplicate of what he’d done became uneconomic was an early victim of this trend.
With New Zealand’s electricity generators now partly or fully privatised their focus on profit ahead of New Zealand’s best interests is comprehensible, but these decisions by the generators and now lines company, Unison, are sure to be ultimately destructive to their business models and their profits.
Here’s why.
Some years ago, my family bought a rural bolt-hole in Waimate North. It was an extraordinary property consisting of a huge house constructed from scoria boulders on twenty acres of paddocks and regenerating bush.
It had been developed over many years by a Swedish hippie couple who sold when their relationship broke down. It was very definitely off the grid. The only wire in was joined to the telephone. Water was collected on the roofs and heated by big gas bottles. Warmth came from wood fires. We decided that we needed radio, music, television, lights and a cell phone charger so I purchased a small solar kit.
This consisted of one solar panel, an inverter and three large golf cart batteries. My memory is that this now very outdated system cost less than $2000. This scheme supported eight one hundred watt equivalent light bulbs, radio, the CD player a TV and an essential cell phone charger.
Even on cloudy days, we never ran out of power, and when we sold the property to a friend, he upgraded and extended the system so that more electricity could be stored and appliances like refrigerators, dishwashers and washing machines could be powered. The new owner also installed solar hot water and got rid the big gas bottles.
My electrician neighbour in Waimate built an off the grid house from scratch and as well as a sun-tracking solar array, installed wind generators and put a mini-hydro in the creek we shared. The windmills proved almost useless and mini hydro ended up somewhere in the Pacific Ocean after a flood, but his solar generation was a huge success.
My point is that with the generators heavily reducing feed-in tariffs, and Unison charging extra for properties generating their own power, it will become increasing attractive for consumers to be off the grid altogether, just as we were in Waimate North.
In recent years two developments have made solar energy much more attractive than when I dabbled years ago.
Thanks to massive production in China, the price of solar panels has plummeted from $76.67 cents per watt in 1977 to 74 cents per watt in 2013. At the same time they have become much more efficient.
Alongside this trend has been a huge increase in the efficiency of batteries with the development of lithium-ion technology.This means that not only is electricity much cheaper to generate with solar panels, it is much easier and cheaper to store in large quantities.
The electric car company Tesla, in 2012, advertised the Tesla Model S with a stated range between charges of 426 kilometers, enough to drive from Auckland to Hastings.
A friend, based in China and constructing an off the grid house in Northland, believes that it won’t be long before any home owner will be able to become self-sufficient in electricity for as little as $10,000. This would give many consumers the option of thumbing their noses at their power generators and lines companies. They’d lose their power bills get their money back when they sold their properties.
Unison’s “solar tax” is a very silly move which will lose it customers in the long run. This company is no longer the indispensible monopoly it used to be.