knowledge article

How Do Energy Companies' Buy-Back Tariffs Affect The Overall Value Of Your Solar System?


By far the most effective way to benefit from your domestic Solar energy System is by using the power when it is produced.

For the majority of Kiwis that means between 10am and 4pm – and that's not necessarily the times when many households would usually be consuming their peak amounts of power.

That's why there are a number of alternatives to help ensure you don't let all that clean, free Solar energy go begging:

Solar buy-back rates: This is the amount of money that energy retailers are prepared to pay to return your excess power to the grid.

Battery storage: This is a way to store your excess generated Solar power for use in the evenings, overnight and early mornings.

Adapt your lifestyle: Many people who move to a domestic Solar System realise quickly that it doesn't take much of a switch in lifestyle to consume power during the day rather than night… especially when it comes to, say, heating a pool or powering a home office.

Appliance controllers: Harrisons has a number of products such as a hot water timer or a power diverter which help direct energy to where It's most profitable to you during generating hours.

Of these options, one of the most frequent questions we get at Harrisons Solar is around energy retailers' buy-back rates and how to get top dollar for your excess power.

Quite simply, most big name retailers have settled at around the 8c per kWh mark – which isn't going to help pay off your Solar System particularly fast. There are, however, some smaller companies such as Ecotricity, Flick and P2Power that are trying something a little bit different in terms of rates (P2Power offers 16c per kWh for the first 50kWh each fortnight, for example), so it does pay to shop around a little.

Harrisons technical advisor Cyril Marychurch says the key decisions when it comes to creating and running an efficient and cost-effective Solar System are around ensuring you absolutely minimise the amount of power you export because it is never going to come close to matching the cost of importing power off those same retailers.

“You want that export figure, ideally, to be zero,” Cyril says. “The big players in energy retail have strangled the market for so long that there hasn't been that much of a change in buy-back rates for a number of years.

“There are these smaller, boutique companies who are trying to get under their skin by coming up with a slightly different game so I am advising clients to keep shopping around and look outside those big players.

“But the big story is to try not to export at all. It's around matching the size of your System to the amount of power you can consume during the day and, if you are over-speccing purposefully, then look to see how you can cram as much of your power usage into the day by, for example, automating how you heat your hot water.”

One of the key factors in how Harrisons operates when it comes to selling Solar Systems is in the importance we place on matching individual households' needs to specific Systems.

A good example of this is in how we calculate the return on investment for any given Solar System and how any buy-back tariff impacts that value. For example, we'd rarely look to install battery storage simply as a way to compensate for low buy-back tariffs – but it remains one of the many tools a household can use to maximise their return on a Solar System.

If you are looking to install a domestic Solar energy System to generate free, clean power to your home and want information on how to maximise your return on investment, or you're keen to have one of our experts carry out a free, in-home energy audit and consultation contact us on 0800 00 33 54 or check out your nearest Harrisons Solar franchisee via the website and we'll arrange to visit at a time that suits you.

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