Are there Subsidies for Solar Power in New Zealand?

Even though the sun shines brightly in New Zealand and can benefit many people by reducing electrical expenditure but are there subsidies for solar power in New Zealand? Well, the current Labour Government’s Māori and Public Housing Renewable Energy Fund is in place to empower local communities and help them harness the power of the sun. Scroll down and explore the nitty-gritty of the project.

Are there Subsidies for Solar Power in New Zealand?

If you are into renewable energy, then you must be wondering if there are subsidies for solar power in New Zealand. Before we tell you the answer, here are some things that you should know.

The Solar Energy market size in New Zealand is expected to grow at a CAGR of greater than 3%. The market is diversified based on residential, commercial & industrial users and the market is governed by five major players.

In 2007, a government subsidy for a solar hot water system was launched. An incentive of $500 was granted to the customers. This encouraged a few people, but the ignition was short-lived as the subsidy was discontinued in 2012. This also led to the loss of many solar hot water installation businesses.

By 2021, the capacity of solar power increased by 20% to 146 MW as compared to 2020. The government has also set a target to amplify renewable energy dependency to 95% by 2035. However, there is neither government subsidy for solar power in NZ nor do they provide feed-in tariffs for excess power generated.

Labour and National, the two major political parties of New Zealand show little interest in encouraging people to opt for Solar Energy. Both parties own a major stake in the energy power stations. If they push the consumers towards renewable energy, it could cost them fortunes.

However, the current ruling party has come up with the only existing fund in renewable energy called the Labour Party’s Māori and Public Housing Renewable Energy Fund.

What is Labour Government Māori and Public Housing Renewable Energy Fund?

You already know the answer to – are there subsidies for solar power in New Zealand? The answer is no. But there is an initiative taken by the ruling party called the Māori and Public Housing Renewable Energy Fund.

In May 2022, to increase the dependency on solar power, the Labour government allotted a fund of $16 million to be invested phase-wise in the next four years in this initiative. The Labour Government Māori and Public Housing Renewable Energy Fund is a small-scale residential project which became effective in 2022 and will continue to fund solar projects till 2024.

In the first round, $2.8 million were invested which has helped more than 200 households constituting a total of 14 projects. This fund will help encourage people to lead a cleaner lifestyle by reducing their carbon footprint. For example, solar panels were installed in around 14 homes by Te Arawa Whanau Ora in 2021. The households saved $100 per month, which is approximately 30 to 50% of the electricity bill. In the same lines of action, solar panels will be installed in 100 public homes in Wellington through Kāinga Ora.

Recently, the government has sanctioned $9 million for the third round. This phase will focus on relatively large projects which require an investment of up to $2 million per project.

The project also focuses on effectively managing the energy consumption of technology-based appliances smart appliances and timing switches, and hot water diverters, by providing information to families and solutions that can optimize the advantages of energy generation to the target household.

Moreover, innovative distribution and retail systems, including microgrids and peer-to-peer trading to share excess energy output with other homes, are also being developed to manage energy from local generation and storage.

As New Zealand strives to move towards a more sustainable form of living, the role of this fund is essential not just for the Māori community but also for other small communities. This initiative will help bring energy independence, especially among remote communities, and will give them the opportunity to enhance their standard of living at an affordable price.

Also Read: What is Solar Rebate in Western Australia?

What is NZ Battery Project?

Renewable energy fund is not just limited to solar power subsidies. There are other sources of energy that can help you light up your homes. One of which includes hydropower. However, NZ is sometimes under a dry year problem and does not receive enough rainfall. In that situation, the backup energy is provided by traditional methods of burning fossil fuels. Hence, this is where the NZ battery project comes in as a savior. It is one way of dealing with the dry-year crisis periods. So, let us check out the NZ Battery Project.

This project was set up to find out different ways which could aid in solving the dry year crisis period in New Zealand without burning fossil fuels. The project includes three phases. Phase 1 which started in December 2020 and was stretched till December 2022 focused on analysing the dry year problems which are hard to predict. It also investigated the environmental hazards of pumped hydro at Lake Onslow. Updates on phase 2 are awaited as it is expected to end by July 2023.

We hope that you got the answer to whether are there subsidies for solar power in New Zealand. The focus on the Māori community will go a long way in empowering them with affordable living. As rightly said, a penny saved is a penny invested. This will undoubtedly play a vital role in making the vision of 100% renewable energy dependent into a reality.

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