I’m maybe a bit biased, being I’m pro-renewables, pro-environment and anti all forms of fossil fuels but I really feel residential solar power is an industry that’s here to stay. Here’s why.
It’s Getting Cheaper
You’re probably aware that solar panel costs has dropped a lot, a mere 99% since the 1970’s.
Whilst we may not see the massive drops we say over the last few decades, its likely solar will keep getting cheaper. Supply chain issues, changing government policies and various wars are currently causing variation in the price but in the long-term economies of scale and new technology will drive that price down.
The panels are getting better at creating electricity!
I know that might sound odd, given its their job, but solar panels are not perfect at making energy. Several different factors, such as the light reflecting off the glass that protects the panels means that on average panels are only 21% efficient. Essentially panels only create 21% of the energy of the potential energy from light.
However, with the ongoing R&D this will only get better. In 1980 they could only create on average 10% of energy! It is expected that panels will continue to get more efficient as the technology evolves and some lab models have reached almost 40% efficiency by mixing different materials.
It can help with our need to electrify everything!
People often talk about needing some kind of miracle new energy to save the world. In my opinion we already have it, it’s called electricity and its pretty awesome. Also, and whether you agree with it or not, New Zealand like many other countries in the world have committed to getting our carbon emissions sorted by 2050. To do that we need to change how we power our lives, because about 40% of our energy from driving around and keeping warm still comes from fossil fuels.
According to the experts to hit our carbon targets we need to:
- Double our clean electricity by 2050
- Have a tonne more electric vehicles on the road by 2035
- Electrify our heating and hot water.
Pointing out the obvious, this means we’ll need loads and loads more clean electricity. We’re pretty blessed here in New Zealand with a large amount of hydro and some geothermal which provides a solid baseload of electricity. That means we don’t need to look at things like nuclear and don’t rely heavily at all on fossil fuels. However, the vast increase in demand for electricity means there will probably be a fair amount of wind power, maybe a little more hydro and thermal (although not much). Mainly though it will be a hell of a lot of solar. Large scale, commercial and yes residential systems.
Power Bills Keep Going Up
Since 2013, our power bills have jumped up by over 30%, and they’re not likely to come down anytime soon. Last year the Commerce Commission agreed to up the revenue limits for the companies that manage and operate the national grid. That means your bill is likely to go up about $10 a month on average. This is expected to continue right through until 2030 although the increase per month may drop during that time. Wholesale prices are also expected to go up for several reasons, including increased demand.
As residential solar can help bring energy bills down these increases will only serve to drive interest and demand in the technology. With payback periods between 6-10 years and systems lasting 25 years+, a possible 19 years of free electricity sounds pretty good doesn’t it.
Electric Vehicles
There is projected to be about 700,000-1,000,0000 EVs on our roads by 2030. That’s quite a few more than the 90,000 we have right now. Obviously, cars cost a lot to run and unfortunately EVs will be the same. As we know solar systems run best during the day and we’ll struggle to maximise all the energy output from them. So, it doesn’t take a genius to work out that we run our solar panels to our EV when we can and that’s going to be a huge saving in energy costs!
Batteries
We’ve been having more wild weather lately, which means more power cuts. If you’ve got solar with the right battery, you can keep the lights on and the fridge running when everyone else is sitting in the dark. Whilst the investment might not be as strong, batteries can also help store the energy for those times when the sun isn’t shining, meaning you can benefit from your free energy then as well! Also prices of these things are just going to keep coming down as they are fundamental to well, just about everything in a clean, electric system.
Supports make the electricity gid more flexible
A flexible electricity grid is crucial because it keeps the power flowing smoothly, even as we add more renewable energy like wind and solar into the mix. These energy sources can be a bit unpredictable depending on the weather, so the grid needs to be able to adapt quickly when supply or demand shifts. Residential solar power is a real asset here, it generates electricity right where it’s used, which takes the pressure off the grid, especially during peak times like those scorching hot afternoons. When you combine home solar with batteries or smart tech, these systems can actually give the grid a hand when it needs it most, helping create a cleaner and more reliable energy future for all of us.
Your House is likely to be worth more
It’s hard to say exactly how much solar can increase the price of your home with so many different factors to consider. However, most studies suggest that they do. An analysis done by homes.co.nz showed that on average house with solar sold for 4.4% more. It’s not an exact science, but it makes sense to me that people would be willing to pay more for a house with that kind of asset on it as people all recognise the value of being able to create your own energy!
In summary there’s a whole load of reasons why it makes sense that residential solar will continue to grow and that’s what we’re seeing in New Zealand. My money’s on that continuing to grow.
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