Of all the sources of electricity in New Zealand, solar power is one of the smallest.
In 2020, it supplied about 0.37% of the country’s electricity part of the “other” classification in the graph below.
Electricity generation in New Zealand by source for the 2020 year
In total, New Zealand’s electricity supply in 2020 was about 43,137 GWh. Of this, coal accounted for 2,158 GWh (5%), and natural gas 5,938 GWh (14%). Solar energy generated about 159 GWh – 0.37%.
Solar energy generates electricity in New Zealand at a time when it’s least needed
New Zealand’s electricity, unlike many other developed nations, is already highly renewable – the fourth most renewable in the OECD.
Most of our renewable sources, like hydroelectricity, geothermal electricity, and wind power generate consistently, irrespective of demand.
While some water can be held in hydro dams when demand is low and released when demand is high, this has limitations – it can smooth out within day variations in demand, but not across the year – between summer and winter for example.
Because of this, sources of energy that can be utilised when demand is high (like coal and natural gas) and used less – or not at all – when demand is low are needed for when supply from renewable sources like hydro, geothermal, and wind, is outstripped by consumer demand.
As a result, New Zealand’s electricity emissions tend to be highest at the same time as demand for electricity is highest.
To reduce electricity related emissions in New Zealand (which come largely from the use of coal and natural gas) solar would need to be able to generate electricity at the time coal and gas are used most.
When are coal and gas used most?
Coal and gas use is highest when electricity demand is greatest – this true throughout the day and throughout the year.
At a daily level, electricity use is low in the middle of the night through the early hours of the morning, but increases as people get up, turn on lights, hot water jugs, toasters, and showers, and people get to work.
Consumption eases from about 10 o’clock in the morning onward, but stays high throughout the day. The peak for the day occurs from early evening as people return home from work, and reduces from 9 o’clock in the evening on.
In almost every year from 1990-2020, it was the three winter months of the year when the most electricity was generated – 2001 was the only exception, when it was the three autumn months.
Electricity from solar is available when it’s not needed, and needed when it’s not available
Solar output is at its highest when the demand for electricity is lowest – namely in the middle of the day and in the middle of summer . Even on a clear winter’s day in New Zealand, the electricity output from solar panels is only at best half as high as on a clear summer’s day. It almost wouldn’t matter how many solar panels were installed, because they would all simply be producing unwanted electricity.
New Zealand’s annual electricity demand variation relative to supply of hydro and solar capacity
In 2020, the Ministry of Business, Innovation, and Employment commissioned a study by Alan Miller Consulting on the economics of utility scale solar in Aotearoa New Zealand.
The research indicates that if enough capacity came online the saturation of electricity on the wholesale market would lower power prices at that time of the day and make solar projects less lucrative for investors, a paradox whereby the more panels introduced into the system, the less incentive there is to bring solar panels into the system, because a growing number of solar farms are increasing electricity supply for which there is little demand.
The analysis carried out by Alan Miller Consulting included different forecast scenarios for solar development ranking from low to high. Under the highest forecast rate of solar development, annual solar generation would increase 11,000% by 2035, and under the most conservative estimate, only 1,100% in the same period. To simply generate the same output (even if it were at the wrong time) of electricity as coal and gas generated in 2020, a growth in generation of 5,000% on the 2020 base would need to be achieved.
Given this electricity would be predominately generated in the middle of the day and in the summer time, it would not come at the right time to reduce reliance on coal and gas in the electricity sector – in fact, it may actually increase it.
Widespread uptake of solar predicted to increase New Zealand’s emissions
A 2016 study funded by the government run Energy Efficiency & Conservation Authority, along with some of the country’s major power companies, found that widespread uptake of solar power in New Zealand would most likely increase carbon dioxide emissions from the electricity sector in the long-term.
This was because of the variable output of solar power exacerbating the daily and annual swings in supply from renewables, causing greater need for back up from “on-call” forms of generation like coal and gas.
The author of the 2016 report, Concept Consulting, said “this counter intuitive result is because solar PV (photovoltaic) generates more power in summer than in winter – the opposite of New Zealand’s power demand needs”. The graph below (sourced from Concept Consulting’s report) shows annual variation in solar output.
For this reason, the impact of increased generation from solar would be a displacement of more consistent and reliable renewable sources like geothermal or wind energy – not fossil fuels.
The report went on to say that “to fill a widening gap between winter power demand and supply associated with PV uptake, New Zealand will need more power from controllable sources that operate for only part of the time. We expect this to be met mainly from operation of fossil-fuelled power stations, as existing hydro stations are limited in their ability to further increase the amount of water they store in the summer to release in the winter.” 
What about batteries?
Concept’s analysis also looked at what the impact on New Zealand’s emissions would be from wide scale uptake of solar panels if it were combined with the wide scale uptake of battery technology. Analysis showed the two technologies combined didn’t significantly alter the results for solar on its own.
This was because New Zealand’s hydro stations already act like a giant battery and would be capable of offsetting the daily swings in output from solar panels – so batteries would be redundant at a day-to-day level, because hydro schemes would already be doing the job of daily load shifting.
But when it comes to storing surplus water in the summer, neither hydro nor batteries would be able to bridge the gap made even wider by any significant increase in generation from solar panels in New Zealand.
Concept Consulting’s report explained that “…batteries are not well-suited to shifting power across seasons – for which there would be a greater need with high PV (solar) uptake”.
Will solar ever see the light of day?
Solar may be a useful technology for reducing fossil fuel use in other countries, but in New Zealand, where the majority of electricity is already sourced from renewable resources like hydro, geothermal, and wind, solar does not appear to be the right technology for replacing what the coal and natural gas that is used for electricity generation in New Zealand.
While solar may have accounted for 0.37% of New Zealand’s electricity supply, it sits in the context of the wider energy sector, in which it accounted for only 0.1% of the country’s total primary energy supply. Because of its contribution to the total primary energy supply being so small, it does not not even register on the graph below.
It is difficult to see a situation where either solar or batteries can be the solution to New Zealand’s reliance on coal or gas in the electricity sector, let alone the reliance on oil, gas, and coal in the country’s wider energy supply.
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