Grid-connected systems allow you to use electricity you generate yourself, alongside electricity from the grid. When these systems don’t meet all your electricity needs, or you aren't using all the electricity you’re generating, the grid provides a back-up which acts as a battery. These systems are also called grid-tied, or grid-interactive, and can use one or a combination of any micro-generation technologies.
Reducing carbon emissions
If reducing the carbon emissions of your energy use is important to you, changing your transport choices will have a bigger impact than installing a grid-connected generation system.
Nearly 80% of existing electricity generation in New Zealand is from renewable sources, such as geothermal and wind. This means the carbon emissions of our grid electricity are very low, so generating your own renewable electricity won't significantly reduce your carbon emissions.
Costs to install and run a grid-connected system
If you’re thinking about using a grid-connected system to reduce your energy bills, it’s important to do your sums carefully. Grid-connected systems are long term investments and for most households are unlikely to pay for themselves. Usually there are easier and more cost-effective ways of reducing your energy costs, like turning electrical appliances off when they’re not needed, using energy efficient lighting and appliances, or making sure your shower is efficient.
When you’re working out the set-up cost of your grid-connected system, make sure you include:
- the full cost of installation
- equipment such as:
- inverters (and any replacements needed over time)
- company connection costs
- inspection fees and building consents (if applicable).
A grid-connected system will be most cost-effective if you’re using all or most of the electricity you generate yourself, because this offsets electricity at the full retail price, which is much higher than the price your retailer will pay you for buying your electricity. For a solar PV system, that means using electricity in your house during the day when the sun is shining and your solar PV system is generating the electricity.
If you’re thinking about a grid-tied system, look for an electricity retailer that offers both a competitive retail electricity rate and buy-back rate (what they pay for your electricity). Remember the retailer who offers the best buy-back rate for your electricity may not necessarily offer you the lowest retail rate. Also be aware that buy-back rates can change at short notice.
Checklist for grid-connected systems
Grid-connected systems should be tailored to your situation and energy needs, and the system components need to meet certain regulations and requirements.
- Consult an expert for advice - make sure any companies you consider are accredited members of the Sustainable Electricity Association of New Zealand (SEANZ).
- Some companies offer a ‘one-stop-shop' service - they connect your micro-generation to the network, design and install your system as well as liaise with the network company and electricity retailer.
- Talk to your local or regional authority - to find out if you need building consent.
- Apply to your local electricity lines company - sometimes called the network or distribution company. You can find out which network company is serving your area by visiting the Electricity Networks Association of New Zealand website.
- Talk to your electricity retailer - about how much you’ll get paid for excess electricity you generate.
- Check out the 2007 government regulations for more details.