How do I generate my own electricity?

Innovations in the electricity sector are providing new ways to generate, store and even sell electricity through technology such as solar panels, small wind turbines, and batteries.

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Small-scale generation can be connected directly into your house wiring and then to a local distribution network (poles and wires that run through your neighbourhood). Typically, it can generate up to 10 kilowatts of electricity.

What are the costs of generating electricity?

The costs of generating your own electricity vary.

When making a decision on purchasing generation, consider the potential costs to install and maintain equipment, versus the money you might save by generating your own electricity. Likewise, consider the price you currently pay for electricity from your retailer versus the price you would receive for selling any extra electricity back to a retailer.

How do I connect to the grid?

If you do decide to generate your own electricity it may be possible for you to sell any extra electricity back to a retailer. Most retailers have information on their websites which include the price they will pay for electricity from small-scale generators. The 'buy-back' rate is set by the retailer. The Electricity Authority does not regulate prices.

To sell your electricity you’ll need to be connected to a distribution network. The owner of the distribution network (also called a distributor) will need to know the location and status of your generation, and you’ll have rights and responsibilities under the Electricity Industry Participation Code 2010 (Code). Your local network owner/distributor will have information and an application process on their website. You must follow the application process.

What are my rights and responsibilities?

If you install equipment to generate your own electricity, you have rights and responsibilities under Part 6 of the Code and under your contract to your retailer.

As discussed above, you must complete an application to connect generation with your local distribution company. The application process includes information about your rights and responsibilities. You may get your installer to carry out the application process on your behalf.

It is your responsibility to ensure the solar panel provider has completed the application process and has advised you of your rights and requirements. This includes providing required completion advice and inspection results to your distributor.

If the solar panel provider has not completed the application process, it is your responsibility to complete it. If necessary, you could ask the distribution company to clarify your rights and responsibilities under Part 6.

It is also your responsibility to advise your retailer that you are installing distributed generation as:

  1. you may need to agree a buy back price and your pricing plan may change, and
  2. the meter that measures electricity for your premise may need to be changed.

What do I need to know about solar panels?

More New Zealanders are choosing to put solar panels on their homes as a way to generate their own electricity. We have collated some key information to help consumers be better prepared for conversations.

What is a phase and why is it important?

Before you invest in your own generation source, you should find out which type of electrical circuit connects your house to the distribution network. Specifically, you need to know whether it is ‘single-phase’ or ‘multi-phase’. Most houses are single-phase but some rural or larger buildings have more than one phase (known as multi-phase). A phase is a single, voltage-carrying conductor that supplies electricity to your house. Your lines company or an electrician will be able to tell you whether your house is single or multi-phase.

Smaller generation systems offered by suppliers, such as a solar panel or battery, may be single-phase or multi-phase. If your house is single-phase, a single-phase generation system will work fine. But if your house is multi-phase, a single-phase generator will only be able to supply one of the phases in your house. The result is that the surplus electricity may be sold back into the distribution network at a buy back rate, agreed with your retailer, on the phase that the generator is connected to. But at the same time, you may also need to buy electricity from your retailer to supply the other phases, so you’ll buy electricity at a retail price rate, including handling costs and network charges.

If you are connected to your network with a multi-phase connection and you have a single-phase generator you may wish to consider:

  • the additional cost of a multi-phase generator
  • getting your electrician to change the allocation of load in your house so that, for example, the phase with the generation connected has greater load
  • asking your lines company about connecting your house as single-phase.

As distribution network costs are charged for consumed electricity, the cost of the electricity you buy will be higher than the cost of electricity you sell. However, using a multi-phase generator on a multi-phase connection to your house would ensure that you minimise the cost of purchasing electricity by maximising the amount of generated electricity that you consume.

What does the Authority do?

We’re responsible for setting the Code and ensuring that participants follow the rules set out in the Code. Part 6 of the Code includes information about the rights and responsibilities for owners of small-scale generation. We are also working on the issue of distribution pricing to ensure there are efficient pricing systems in place for all New Zealanders.