By Chris Schulz
Investigative Journalist | Kaipūrongo Whakatewhatewha
Making the switch to solar can help bring down your power bills but if you’re considering the move you probably have a lot of questions, such as how will it actually work, is your house suitable and is the return worth the upfront investment?
Here’s our guide to help you work out if solar is right for you and what to consider before you sign up.
How rooftop solar works
A solar system consists of two main parts – the panels installed on the roof and an inverter on the side of your house. When the sun’s up, the photovoltaic cells inside the panels absorb sunlight and use it to generate an electric current. This is direct current or DC electricity, which runs down to the inverter where it is changed into the alternating current (AC) electricity.
Some households invest in larger systems to live off-grid, which means they’re self-sufficient and not tied to the electricity grid. However, most continue to be connected to the grid and pay for power when their panels don’t generate enough. On sunny days, when the panels generate more power than the household uses, the excess can be sold back to the power retailer or stored in a battery.
What does it cost to get solar panels?
Home solar systems come in different sizes, starting from about $8,500 for a 3kW system, which would have about seven panels on the roof. If you wanted to add a battery for its storage potential, a small one for a 3kW system would cost about $5,000.
It’s common for households to start without a battery and work out if they would benefit from adding one later.
While any size system represents a significant amount of money to come up with, Gareth Gretton, a lead advisor at EECA (the Energy Efficiency and Conservation Authority), says the cost has come down a lot over the past few years.
He says adding solar to a typical home will shave $1,000 off its annual power bill, so the cost of a smaller system will be paid back within a decade.
“Solar is now in a position where it is a good investment for most people, as long as you’ve got a few pretty basic ingredients,” he said.
Is my house suitable for solar panels?
Whether solar is the right choice for your home will depend on how much power you can generate and how much you can use. Some things to consider are:
Your roof’s exposure to sunlight. Panels work best on north-facing roofs and in full sun, that is, not shaded by buildings and trees, in the middle of the day. 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
The condition of your roof. It needs to be in good condition so you don’t have to remove the panels to fix it in a few years.
Your appliances. You’ve got electric appliances that can use the power and you can shift their use to daytime.
Paul Fuge, Powerswitch manager and energy expert, says how much benefit you get from a solar system will also depend on your lifestyle.
“Solar pays off best when you can use the power as it’s generated. It’s a great match for households with electric vehicles or electric hot-water systems because those things can soak up that free energy during the day if you shift when they’re using the power,” he says.
“Having solar myself has made me much more aware of when and how I use electricity. If it’s sunny, I plug in the car, run the washing machine and let the hot-water cylinder heat up – so, I’m getting maximum value from my system. We save a lot this way.
“Of course, some days, we make more power than we use. When that happens, the extra automatically flows back into the grid. I’ve chosen a power plan that pays well for any surplus solar, so nothing goes to waste.”
Power usage peaks in the morning and evening for most households. Solar isn’t much help with winter power peaks. The bulk of solar generation in winter is between 11am and 3pm so not at the same time you’re wanting to turn on a heater or have long hot morning shower to warm up. Solar panels also generate considerably more power in the summer, when the days are longer and the sun is higher in the sky.
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.
A good installer will talk about all these aspects with you. They should be checking your latest power bill, asking about your household size and noting any major power uses you have, such as an electric car or pool. They should also be explaining to you that you need to adjust how you use power for it to be worth the investment.
Will you save money once you have solar?
Reaping the benefits of installing solar is a long game. How quickly you get payback – when the savings on electricity over time match the cost of the system – will depend on your household usage and how much sunlight hits your roof.
Once solar panels are installed, the savings begin immediately. You might expect savings of $1,000–$1,500 a year on a typical solar set-up of 5kW. This figure is based on an average home for three people, with electric space and water heating but no electric vehicle.
The payback period is 7–10 years, depending on sunshine levels and regional electricity prices. Moving power use to the daytime will speed up the payback period. Adding a battery will usually lengthen it, though, because of the expense of buying and setting up the battery.
However, it can still make sense to get one if you want a source of electricity during a power cut or if you just can’t move your power use to the daytime.
You can calculate your potential first- year and 25-year savings from installing solar using the EECA solar power calculator.
If solar is so good, why is uptake so slow in New Zealand?
Just under 4% of New Zealand homes have solar installed. That’s 75,000 solar systems installed across the country, an estimated contribution of around 1% of total electricity consumption, according to Electricity Authority data.
Research by EECA in December 2025 showed some New Zealand homeowners aren’t aware how much the price to install solar has dropped, and many said they were put off by the high costs.
One respondent said, “... somewhere between 5 and 10 years ago, I got a quote, and I figured, at the time, even if it saves 50%, that’s a hell of a long time before I get my money back.”
Others cited the lack of solar panels being installed by others in their neighbourhood as a sign it wasn’t a good idea. “If solar was a good investment, more people would have it,” one said.
Not knowing how much power they’d need to use in the future was another common reason given for not installing it. Still others said they found it too difficult to compare the different systems and quotes from installers.
What’s happening with solar overseas
Yet, in many other countries, household solar uptake rates are incredibly high. In two Australian states – Queensland and South Australia – more than half of the homes have solar.
Even 7% of homes and small businesses in the United States are hooked up to solar – that’s 5 million properties, and the rate is expected to double by 2030.
Our comparatively lower solar uptake rate has nothing to do with a lack of sunshine hours, says Gretton. He points to Germany, where solar accounts for almost 15% of the country’s electricity demand.
“Most of New Zealand has a better solar climate than anywhere in Germany – even down in Dunedin,” he says.
Key takeaways
Solar will reduce your power bills. The time it takes for the savings to match the cost of installing your system will depend on how much power your panels can generate, how much of that power you can use and what your electricity rates are.
It’s important to understand how your household uses power when deciding if solar is a good choice for you.
Solar works best as part of an efficient household energy system.
If you’re not able to shift the timing of a lot of your power use, a battery will let you keep using your own power when you’re not generating. But this will lengthen the payback period.
This article is kindly funded by EECA.
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