PV uptake in New Zealand has increased dramatically since 2013, is now averaging about 1 MW a month, and has reached about 11,000 systems (45 MW). This is shown below using two different data sources, where the MBIE data from 2014 onwards was based on projections.
As occurred in the Australian market, uptake has mainly been by households (about 78% of installations), followed by small to medium enterprises at 9%, industrial at 7% and commercial at 6%.
Also as occurred in Australia, a greater proportion of households in regional areas install solar compared to their city counterparts.
This increased uptake has started a backlash from incumbents, with discussion about the costs solar is imposing, restrictions on uptake, ‘solar tariffs’, and so on. ITP Renewables was commissioned by a collection of individuals and businesses (coordinated through the Sustainable Energy Association of NZ, SEANZ) to write a report on the impacts of solar PV in NZ.
Although 80% of NZ electricity is from renewables, resulting in an average emissions intensity of 0.14 tCO2-e/MWh, the installed PV largely displaces open cycle gas turbines (OCGT), which are the predominant marginal generators (in NZ, wind, geothermal and hydro are considered to be baseload).
The currently installed PV systems are expected to generate about 53 GWh in 2016, and so avoid the production of 29,000 tCO2-e with a value of around $NZD 560,000. This value is based on the current spot price for GHG emissions in the NZ emissions trading scheme, which has been operating without controversy since 2009.
Of course, the uptake of solar in NZ has been much slower than in Australia, in part because of the lower insolation but mainly because of the lack of government incentives. The currently installed capacity in NZ is 9.2W per capita, whereas Australia’s is 190W per capita.
This all means that NZ is in a unique position, in that solar uptake is starting to take off at a time when batteries are becoming financially viable, and other technologies such as the Power Genius, a NZ invention which enables diversion of loads to soak up PV generation, are coming to market.
The figure below shows the APVI chart of PV uptake in Australia, with the equivalent installed capacity for NZ, and the installed capacity at the same watts per capita as currently in Australia. Although NZ is unlikely to have the same absolute uptake as Australia, the figure does show there is significant scope for increase.
Of course, as occurred in Australia, the reaction of most of the incumbents has been to try to maintain the status quo (rewind about 5 years in Australia) rather than try to benefit from the new technologies (as many, but not all, incumbents in Australia are focussing on now).
There has even been the usual reports attempting to claim that PV will impose unfair costs on other customers and even increase GHG emissions. Such reports miss the point that the customers who take up PV will likely be the same customers who take up batteries, which can be used to flatten the demand profiles and therefore network costs for all.
Opposition to PV also ignores the widely observed consumer technology adoption curve (below), illustrating the typical trajectory. As it has done in other countries, this trajectory is likely to be followed in NZ for PV, battery storage, energy efficiency and DSM. Uptake is being enhanced by availability of management via mobile apps.
The NZ Ministry of Business, Innovation and Employment recently modelled a number of scenarios, including one termed the ‘Disruptive’ scenario, which has the highest uptake of PV, and concluded that “Solar and battery systems reduce the evening peaks by around 490 MW in 2040 and 800 MW in 2050” – which is about 40% of the rated PV capacity in those years.
The simultaneous uptake of batteries in NZ will also mean that PV continues to offset OCGT electricity (rather than ‘eating down’ into the contribution from existing renewables), and as a result emissions would be reduced by an estimated 8 million tCO2-e, worth $NZD500 million, between 2016 and 2040.
It remains to be seen how quickly the NZ electricity industry and regulators will recognise and benefit from the opportunities that PV, batteries and the host of new energy technologies have to offer.
Rather than selectively penalising new technologies, specifically PV, the focus should now be on how to make the most of the coming opportunities driven by increased customer choice, and in enabling the existing electricity industry to transition to the ‘new normal’.
Integrated distributed energy systems present a significant opportunity to provide broad-reaching social benefits. Leasing options and solar PPAs can help overcome the capital cost barrier. Community-owned systems are proving popular for renters or people who have little solar access. Government housing is a prime opportunity for lower income households to reduce their costs, and of course, the interest in PV presents the perfect opportunity to also implement energy efficiency and load management options.