Solar Energy vs Traditional Energy Cost Comparison

At the forefront of sustainable energy solutions, home solar systems have undergone a remarkable transformation over the years. In New Zealand, the cost of renewable solar energy has reduced significantly, making it more accessible for both homeowners and businesses.

Read on as we compare the cost of solar energy vs traditional energy to discover why more and more Kiwis are switching to solar. 

The Cost of Traditional Energy in New Zealand

Towards the end of 2023, the average NZ household consumed around 7,000kWh annually. The average cost per kilowatt-hour (kWh) is around 33.74 cents, translating to an annual power bill of about $2,362, or $197 per month.

However, it’s important to remember that traditional electricity costs can vary considerably across different regions in the country. For instance, some residents may face higher power bills than the national average, while others may have lower bills. For those facing higher energy bills, investing in solar power can effectively mitigate these costs in the long term.

Average Expected Cost of Solar Energy Systems

The cost of solar power systems in New Zealand is depend on the system size and the roofing infrastructure upon which the system is installed. Adding a battery also increases the overall cost, but this is optional.

After the initial investment to install solar, monthly power bills reduce significantly and the ongoing rises in the cost of electricity is mitigated.

Factors Influencing Solar Panel Costs

Type of Roof

Investing in solar panels is an economically smart choice, with the final cost influenced by a few key factors. Notably, the type of roof plays a vital role in determining installation ease and expense. Tile, bitumen, or shingle roofs may necessitate extra mounting components, while metal roofs offer a simpler, more cost-effective installation process. Overall, the versatility in installation options across different roof types ensures that solar panel installs can be tailored to suit various budgets, making it an accessible and favourable option for eco-friendly energy.

Switchboard Upgrades

Upgrading the switchboard may be recommended to be able to install solar system depending on the state of the current switchboard, switchgear, and caballing within the home. This could incur additional costs. The following factors may determine the need for a board upgrade:

• Is the board in a suitable location? It shouldn’t be positioned too high.
• Is the board made from asbestos? In some cases, older boards require drilling; if the board is made of asbestos, it needs to be upgraded beforehand.
• Are the cables suitable for use and supply? Some older properties still have “VIR” cables; these are non-compliant and should be replaced.
• Sometimes, if the board is compliant but has no space to add circuits needed for solar, we may require a bigger board to be installed, or we would install a sub board which is an additional board.

Travel Costs

Travel costs are also a consideration, particularly for installations in remote locations, where additional charges may apply if the installer has to travel far from their base.

Understanding the Return on Investment of Solar Panels

The viability of a solar power system in New Zealand becomes evident when considering its return on investment (ROI), which typically ranges between 10% to 15%. Given the persistent upward trajectory of electricity prices, this ROI is poised to escalate annually.

The Future of Solar Power Costs in New Zealand

The future trajectory of solar energy vs traditional energy costs in New Zealand suggests a tempered but consistent trend. The notable sharp decline in solar prices observed in the previous decade may not reoccur at the same pace due to stabilisation within the solar industry. However, potential buyers can still expect incremental reductions or a stabilisation in prices over time.

Technological innovations persist in enhancing solar system efficiency, albeit with gradual improvements rather than revolutionary leaps. These advancements, like improved panel efficiency and better energy storage solutions, contribute to the steady progress in making solar power more accessible and cost-effective for consumers. While the dramatic price drops of the past may not replicate, the evolving landscape of solar technology and its increasing adoption continue to shape a promising and financially viable future for solar energy in New Zealand.

Make the Switch to Solar with Lightforce Solar

The current costs of solar energy vs traditional energy paints a promising picture of a future with a cleaner and greener energy system in New Zealand. 

If you’re interested in switching to solar, get in touch with the team at Lightforce Solar. With over a decade of experience, we can help you set up solar panels for your home and provide support for the life of your solar system.