Solar electricity systems, normally called solar (or solar panels, photovoltaics or PV) generate electricity from the sun.

How does Solar work.

Solar panels convert sunlight into electricity. Light energy (photons) hits the solar panels and excites the electrons in the atoms of a semi-conducting material (for example silicon), and the movement of these electrons results in an electric current.

New Zealand has good sunshine hours and solar works across the country. Solar works best in sunny areas such as Nelson/Marlborough, especially when there are high levels of direct sunlight, but some electricity is also generated on cloudy days. Solar generates no electricity at night.

What does a Solar Electricity System look like?

Solar electricity systems usually include:

  • solar panels (sometimes called modules), cables, and mounting or fixing hardware
  • an inverter (or inverters) to convert the electricity generated by the panels into the type used in houses
  • special meters to record how much electricity you generate and sell
  • batteries for grid-connected solar are just coming onto the market
  • for off-grid applications, batteries, back-up generators and other specialist components.

Most houses with Solar will need to buy electricity from a retailer

As solar doesn’t generate at night and it doesn’t always generate enough electricity when you need it, most solar installations in New Zealand are ‘grid-tied’. The house remains connected to the electricity grid and electricity continues to be purchased from a retailer during times when the solar system does not generate enough electricity.

Some households choose to go ‘off-grid’, disconnecting from the grid entirely and purchasing batteries to provide electricity when the panels are not generating enough electricity to meet demand. Although battery prices are falling, this approach won’t make economic sense for most households. However, for new houses facing a high cost to connect to the grid, going ‘off-grid’ with solar and batteries may be cost-effective.

At times solar will generate more electricity than can be used, allowing households to sell electricity to an electricity retailer. The retailer buys this electricity at a ‘buy-back rate’- these vary but are lower than the amount companies charge you for electricity. This means households with solar get greater value out of using the electricity they generate themselves, rather than selling it back to a retailer.

When considering solar, consider the buy-back rates on offer. You may need to switch from your current retailer to access a buy-back rate. The retailer offering the best buy-back rate may not necessarily charge the lowest for the electricity they sell.

For safety reasons, grid-tied solar electricity systems do not operate during power cuts. Off-grid solar is unaffected.




A solar hot water system absorbs the energy from the sun in collector panels located on the roof of your home, and transfers that energy to the water stored in your hot water cylinder. When there is not sufficient energy from the sun to heat the water in the cylinder a booster system (either electric, gas or wetback) is used to heat the water to the required temperature.


  • Well-designed and installed solar water heating systems will meet 50-75% of your hot water needs using the sun’s free energy.
  • When the sun can’t heat enough water to meet your needs, an electric, gas or other booster connected to a solar water heater mean you’ll always have hot water.

Keep in Mind

  • The upfront cost is high compared to other hot water systems.
  • Not all properties are suitable for solar water heating – check with your supplier to find out.
  • If you intend to use an electric back-up, check with your electricity retailer to see if a cheaper night rate electricity tariff is available. If you’re going to use night rate electric back-up make sure you get a large enough storage tank.