Research report
3 August 2018
Are solar panels right for your home?
Before you can enjoy a sun-powered home, you’ll want to find out if solar panels stack up for you.
Photovoltaic (PV) solar panels can seem an attractive option – who doesn’t want lower electricity bills and clean, green energy? However, before you can enjoy a sun-powered home, you’ll want to find out if solar panels stack up for you.
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This report is free thanks to EECA (Energy Efficiency and Conservation Authority).
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DonateIn August 2018, we arranged for four solar installers to assess homes in Auckland, Christchurch and Hawke’s Bay, and provide a quote for an appropriately sized grid-tied system.
Are you solar-suitable?
A PV system for an average-sized house can be installed for under 10 grand. However, how long it’ll take to pay itself off depends on several factors, including:
- how much power the panels generate, how much of that you use, and how much is sold back to the retailer
- the earnings you forgo by not investing the money spent on solar elsewhere or, if you are borrowing, the interest payments you make
- how much power prices and buy-back rates rise or fall over the lifetime of your panels, and
- the lifetime cost of the system, including any repair.
Assessing your property for PV suitability essentially comes down to two factors: the power a system can generate and how much of that power you can use.
How to assess your home
There are online tools you can use to assess the viability of your home for solar:
In both you can input details about your home, current energy usage, and behaviours to find out if solar is right for you – we recommend trying both tools and comparing the results you get, as each uses different assumptions.
When making any assessment, it’s important to note solar PV is a long-term investment, which brings added risk and uncertainty. Over the 20+ year life of the system, there are likely to be changes to interest rates, electricity prices and buy-back rates, and household electricity use that could reduce or increase the actual return provided.
What can you generate?
In the southern hemisphere your panels need to face north to get the best power production. Your roof will ideally be north-east- to north-west-facing, with a 15 to 45° pitch. Falling outside this range cuts down how much power panels can generate.
Look for shading on the roof – think nearby hills, trees or buildings. As soon as panels are in shade, their generation levels plummet. Small patches, such as the shadow cast by a chimney, can be overcome using micro inverters or power optimisers, but these cost. Think long-term as well. How big will the neighbours’ trees be in 20 years? Is there the possibility of taller buildings being put up in your area?
What can you use?
Getting PV panels installed on your roof is only part of the equation. You also need to make best use of the power produced. Selling it back isn’t financially attractive (the buy-back rate from power retailers is 7 to 8¢ per kWh). A better option is using the power produced on your roof during the day.
Power usage peaks in the morning and evening for most households. We use more electricity in the winter, and the peaks are higher too, as we turn on heaters and use more hot water on chilly mornings and evenings.
Solar PV isn’t much help with winter power peaks. The bulk of solar generation is between 11am and 3pm. Solar panels also generate considerably more power in the summer, when the days are longer and the sun is higher in the sky.
To get the best payback from solar PV, you need to use as much of the solar power as possible as it is generated. Some of the power used in morning and evening peaks can be shifted. Using timers to delay and stagger appliances could be one part of the puzzle. Another is switching electric water heating to come on during the day.
However, solar PV becomes most viable if you consume power all day, especially in the summer. That could be because your home is occupied all day, you heat a spa pool, run a swimming pool pump, or have an electric car charging.
Ultimately, getting the best bang for your solar buck requires a home with large daytime power use, plus a behavioural change for your household to bring consumption into line with production.
Typical household consumption & PV generation
Solid line = Power generation
Dotted line = Power consumption
Getting the right size
The ideal solar PV system for your home is sized so you can use most of the power it generates, selling as little as possible back to the grid. You will pay more than three times as much to buy power from the grid as you’ll get for the power you sell. So a large system may be cheaper per watt generated, but it could take a long time to pay off the extra investment.
Installer assessments
The installers all did a good job of assessing our three households. They all checked the latest power bill, asked questions about our household size and behaviour, and noted any major power uses (such as a pool or home office). All installers highlighted that to realise any financial benefits, the household would need to adjust how it used its power.
There was variation in recommended panel array sizes across the board. However, many recommended pairing the panels with a larger-than-required inverter. We think this is a good idea, as it allows the addition of generation capacity in the future (for example, if batteries were to be installed).
Two Auckland installers recommended including a battery now. However, we think the payback time for the battery is far longer than its lifespan. The other installers in Auckland and all of the installers in Hawke’s Bay and Christchurch told us batteries weren’t economical, and didn’t recommend we install one.
Installers at our Hawke’s Bay property all quoted scalable systems. The inverters quoted were either larger 5kW models or micro-inverters. This factored in the pool that was being installed and would allow for more panels to power the pool pump and potential water heating.
One company incorrectly identified our Christchurch property as having too much shading and quickly left after the sales pitch. This particular roof was in full sunlight during the 1pm visit and it’s difficult to ascertain the shading from such a quick look. While it was overly cautious on the installer’s part, it did show care and consideration for our homeowner.
Each company offers several brands of panels and inverters. However, there isn’t a marked difference in their ability to generate power (they range from 270W to 300W per panel). For inverters, the smart choice is a system with monitoring software so you can see in real-time the amount of power you generate and use. This enables you to adapt behaviour to use as much self-generated power as possible.
It’s important to check your warranty. For panels, you want a guarantee of minimum power production levels for at least 20 years. Panels and inverters should also be covered for physical and electrical issues.
All quotes were inclusive of equipment, installation, and any consents or paperwork needed to switch the home to “distributed generation”. The only extra we were warned about by all installers was a charge of a few hundred dollars for an import/export meter, paid to our electricity retailer.
Tier one?
You might see or hear the term “tier one” in solar panel sales pitches. Don’t mistake it for anything regarding panel performance. Rather, it’s a measure of the size and financial vitality of the manufacturer. The only use to you is it indicates the company is more likely to hang around.
The ideal solar PV system for your home is sized so you can use most of the power it generates, selling as little as possible back to the grid.
Solar tech 101
Panels
Panels are roughly 1.6m by 1m with outputs of about 270 to 300W. A 3kW system needs a minimum of 10 panels – for reference, 3kW is about how much power you’d use to run a clothes dryer and an electric cooktop simultaneously.
On a summer day, you’ll get peak production for a few hours either side of midday. Over time, panels lose some of their generation capacity (they’ll usually experience a 15 to 20 percent drop over 20 years). However, you can expect a maintenance-free run over this period. You may need to clean them annually, which may involve a cost for someone to do this.
Inverters
An inverter converts the direct current (DC) electricity produced by the panels to the alternating current (AC) used in your home. For grid-tied systems you’ll need a grid-tie inverter to synchronise your system with mains power and sell electricity back into the grid when you’re producing a surplus. There are different types of inverters:
- A string inverter is a large centralised inverter that’s usually mounted to a wall in your garage or housed outside. String inverters only work as well as the worst-performing panel – if one panel is shaded, it brings down the power generation of the whole array. Power optimisers can improve shaded performance, but they add extra cost to the system.
- Micro-inverters sit on the back of each panel. They make it easy to add more panels because you don’t need to buy a new, higher-capacity string inverter. They can also better optimise each panel’s power production – each panel is independent, so if one gets shaded the others keep churning out at full power. Micro-inverters tend to cost more than string inverters.
Inverters are unlikely to last as long as the panels, and over 20 years you’ll need to replace them at least once.
Import/export meter
Export meters measure how much power you’re selling back into the grid. This is an upgrade over your standard meter.
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