Aussie firms are beating Kiwis in solar use – but that can change.

It's not just residents struggling with power prices. Businesses are also caught in the grip of New Zealand’s archaic and complex electricity system – though one expert says few realise there is an easy way to cut rising costs.

Rory McCarthy, chief operating officer for Lightforce Solar and highly experienced developer in commercial and industrial provision of solar energy for companies around the world, says New Zealand is lamentably behind when it comes to using solar power to cut electricity costs.

Businesses could save somewhere between 20-50% of their energy costs, he says, hard on the heels of a New Zealand Herald investigation into how 100,000 New Zealanders are struggling to pay power bills.

According to a 2022 MBIE report, 110,000 households cannot keep warm. Meanwhile, the four big power “gentailers” (who generate electricity as well as sell it) make collective profits of $2.85 billion per year – a whopping $7.8 million every day.

“In Australia, 16-20% of commercial and industrial businesses have invested in solar and have enjoyed the benefits. In New Zealand, it’s just 1%,” says McCarthy, who will be speaking on this topic at a Business Breakfast in August.

“We know – from Australia and other countries around the world that have been quicker and smarter to adopt solar – that most commercial and industrial businesses can cut their energy costs by 20-50% a year. That is huge. It’s even more – like 40-60% – for high usage companies in industries like construction, food, concrete, steel, mining and forestry.”

Rory McCarthy, chief operating officer for Lightforce Solar and Simon Watts, Minister for Energy, at Lightforce Solar install. 

 


“We know – from Australia and other countries around the world that have been quicker and smarter to adopt solar – that most commercial and industrial businesses can cut their energy costs by 20-50% a year. That is huge. It’s even more – like 40-60% – for high usage companies in industries like construction, food, concrete, steel, mining and forestry.”

Solar power in homes has been similarly slow to grow. Only 3% of New Zealand’s households have employed solar power, compared to 40% in Victoria, the Australian state whose climate most closely resembles New Zealand’s.

Closer to home, Lightforce Solar is already partnering with major brands like Air New Zealand and delivering strong results through a northern community pilot project now six months in. Overhauling New Zealand’s archaic electricity infrastructure is a complex issue, McCarthy says, “but there are things that can easily be done now to benefit businesses and the New Zealand economy”:

  • Finance – Make low-cost loans available to help businesses switch to solar, replace vehicle fleets, and swap gas boilers for electric. “Australia began their solar drive with subsidies – but there is so much that can be done right now, even without that it makes sense.”
  • Cutting red tape – Limits on solar system size stem from fears our ageing transmission system can’t handle excess energy. “If you want a 500kW system, you might be told 300kW. That’s where Lightforce Solar plays a vital role – partnering with businesses to design solar solutions that align with their energy use, maximise long-term savings, strengthen energy resilience, and guard against rising electricity costs.”
  • Fairness – “The gentailers want to make a profit – but it just doesn’t seem fair they pay NZ consumers 8 cents per kWh for your power but sell you theirs at 33 cents.” In June, the Government announced a review of how solar users are compensated for exporting energy – a change that could lead to fairer outcomes over time.
  • Focus – New Zealand’s transmission companies do a good job, he says, but too many have turned their profits into diversifying their company portfolio instead of pouring the money back into the transmission system. “One invested in a wine company; others in a cyber security business, another in fibre-optics for telco transmission towers, instead of investing and maintaining the infrastructure of our country’s transmission lines. You have to ask – is this best serving New Zealand?”
  • Ease of access – “In Australia, getting a permit for a residential system takes 72 hours. In New Zealand, it takes six weeks – sometimes more. For a commercial or industrial permit depending on the transmission company it takes up to three months” 

Countries like Sweden – similar in size and population to New Zealand – have much more advanced renewable energy systems and electric vehicle adoption. Dubai and Abu Dhabi have made a huge, co-ordinated, legislative move, using solar power and battery storage systems to lead industry into a renewable energy era. “That’s in a place where petrol costs 65c a litre and there are absolutely no subsidies on renewable, it has to stand on its own feet and beat fossil fuel alternatives.”


There are three main points all New Zealand businesses should consider: “First, switching to solar and renewable energy is not a climate solution – but it is a considerable business advantage. Second, you can cut emissions and cut costs. Finally, you can vastly improve your company’s resilience.”

Many businesses are locked into five-year contracts with major electricity retailers (gentailers), often facing significant penalties for early termination or for adding solar generation that reduces their grid consumption. One Lightforce Solar customer was quoted a $50,000 penalty simply for planning to reduce their energy usage through solar.

According to Lightforce Solar, these contracts can become more costly over time, with businesses often locked into new five-year terms as prices rise. New Zealand has seen commercial power prices increase by more than 40% in the past five years.

By investing in on-site solar generation, businesses can reduce their exposure to the spot market – where prices can fluctuate every half hour – and benefit from more predictable, self-generated energy costs. Lightforce Solar says this offers greater control over budgeting and long-term energy planning, and can protect profitability in the face of future price increases.

“Why wouldn’t you do that?” asks McCarthy.

To learn more about how your business could benefit from solar, visit lightforce.co.nz.