If you generate more solar power than you are using, you may be able to sell the extra electricity generated back to your electricity retailer.
What is a Buy-Back rate?
The amount you are paid per unit (kWh) of electricity exported is referred to in New Zealand as the ‘buy-back rate’, and there will be a written agreement between yourself and your power retailer which sets the terms and conditions for the buy-back.
This may be referred to as a ‘buy-back agreement’ or a ‘distributed generation agreement’.
You may also hear the buy-back agreements referred to as ‘export tariffs’ or ‘feed-in tariffs’ which are similar arrangements overseas.
How much is my Buy-Back rate?
There is no New Zealand regulation setting the value of the excess energy you produce, or the minimum solar buy back rate you will receive. The rate and terms of the buy back will depend upon your power retailer, so it’s worth checking what your preferred power retailer will offer and shop around.
Historically, you may have received a separate payment from your power company for energy exported. Some retailers also required you to raise an invoice each month in order to get paid. However nowadays the exported energy will most likely appear as a credit on your electricity bill.
Below is a list of current buy back rates on offer, plus additional information you need to consider when assessing buy back options.
If you would like to add to the table or suggest any additional information that may be useful to others considering solar, please drop me a line.
2017 Solar Power Buy Back Rates
|Retailer:||Buy Back Rate:||Max Size:||Export Meter:|
|Contact Energy||8¢ / kWh + GST||10kW||$125 incl. GST|
|Genesis Energy||8¢ / kWh + GST||10kW||$100 incl. GST|
|Mercury Energy||Mercury Solar: 12¢ / kWh + GST fixed for 36 months.|
Standard: 8¢ / kWh + GST
|10kW||$135.00 incl. GST +|
|Meridian Energy||8¢ / kWh + GST||10kW||$100 incl. GST|
|P2 Power||Premium: 16¢ / kWh + GST for the first 50 kWh each fortnight (wait list applies).|
Standard: 8¢ / kWh + GST
|Trustpower||7¢ / kWh + GST||10kW||$155 incl. GST +|
How Important are Buy-Back Rates?
The importance of the solar power buy-back rate will depend upon your system setup. More specifically, the generation profile of your solar setup relative to your energy consumption.
If you are expecting to export a significant portion of the power you generate, then you should spend the time to get a good buy back rate. The buy-back rate in this instance may make or break the economics of the solar installation.
If you are expecting to consume the vast majority of your generation, which is true for solar systems with the best economics, then the buy back rate will be of lesser importance than selecting the right power retailer.
Below are two examples of two solar installations I have been involved with. For one installation, the buy back rate was quite important. For the other, not so much.
Residential Solar Installation – Napier, NZ
The first is a residential installation, where the homeowners are out during the day. What is obvious is that during the peak of summer, the solar generation greatly exceeds the household energy consumption.
In this instance, the homeowners would be exporting the majority of their generation during the day. So the solar buy-back rate was important.
Commercial Solar Installation – Wholesale Bakery – Kapiti Coast, NZ
This second installation was a larger solar installation on a seven-day a week commercial bakery.
I sized this system through reviewing 24 months of historical consumption, aiming to minimise power export and maximise solar installation economics.
The buy-back rate was of minimal importance. So much so that the optimal power retailer we selected did not even offer a solar power buy back rate.
Your retailer terms may specify that they will only pay the GST component of the buy-back rate if you are GST registered. You may not be paid the GST component if you are not GST registered. Dependent upon your individual setup, this may be quite important to the economics of your solar installation.