Solar is usually sold in dollars and payback years. There's a clearer way to think about it: what does a single unit of power from your own roof actually cost? Spread the whole lifetime cost of a system (the install, the odd repair) across every unit it will ever make, and you get one price you can hold straight up against your power bill. (Engineers call this the levelised cost of energy, or LCOE.)
For a typical New Zealand home it works out to around 10 to 11 cents per kWh, about a third of the per-unit rate you buy off the grid. Pick your region and system size below to see your own figure.
What this number measures
It answers one question: over its whole life, what does a unit of power from this system cost to make? Add up everything you spend, from the install to an inverter replacement down the track, then divide it by everything the panels generate over 25 years, with both sides brought back to today's money.
Because it folds the upfront cost into a per-unit price, it's the only fair way to line up power from your own roof against the grid's per-unit rate. A 5 kW system costing $11,500 that makes ~6,500 kWh in its first year isn't really "$11,500". It's about 10 cents for every kWh it produces.
Why your region changes the answer
Two local factors move the figure:
- Sunshine. A typical roof in Nelson or Marlborough makes ~1,325 kWh per kW each year; the same roof in Southland makes closer to 1,000. More generation spreads the fixed cost across more kWh, so the price per unit drops.
- Grid price. Your solar cost is what you pay to make power; the grid's volume rate is what each self-consumed unit avoids. Across New Zealand that per-unit rate sits near 31 cents per kWh. Solar only cancels this volume rate: the fixed daily charge (about $2.78) stays on your bill whether you generate or not, because your home stays connected to the grid.
Your solar cost is locked in the day you install it. The grid's volume rate is not. That gap is the whole case for putting panels on your roof.
The assumptions, and where they come from
| Input | Figure | Source |
|---|---|---|
| Install cost (5 kW) | $11,500 incl GST | EECA, typical 2025 prices |
| Yield | 900 to 1,450 kWh/kW/yr by region | NIWA sunshine + Google Solar imagery |
| Grid volume rate | ~31c/kWh (regional) | Electricity Authority, standard user, Mar 2026 |
| Fixed daily charge | ~$2.78/day, not offset by solar | Electricity Authority, Mar 2026 |
| Discount rate | 1% real | EECA-referenced green home energy loan |
| Lifetime | 25 years, 0.5%/yr degradation | Industry standard, Tier-1 panels |
| Inverter replacement | once, ~year 12 | Industry standard, string inverter |
Even at the pessimistic end, rooftop solar comes in well under half the volume rate the grid charges. It is, on this measure, the cheapest electricity most Kiwi homes will ever buy.