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Customers who are planning to put solar power systems on their homes are being warned to make sure it makes financial sense first.

How does it work?

Solar panels are fitted on to a house, usually to the roof, positioned to capture as much sunshine as possible. They then generate power, which is fed back into the system.

More expensive set-ups sometimes have batteries to hold the power that is generated. Vector is currently taking expressions of interest for a Tesla Energy battery that it will soon offer. These are expected to cost $7000 or more for the battery alone.

A cheaper, and more common, option is a grid-tied system, where power is sold back to electricity suppliers if it is not used as it is generated.

Does a solar power system save money?

Whether you end up better off depends a lot on how you use your power.

A good quality grid-tied system big enough to cater for a typical household costs about $12,000.

Some power companies used to pay the same rate for solar power as they charged customers. That meant there were big savings to be made.

But solar power specialist Phil Rumble, of Rumble Electrical, said there were ways to increase the benefits.

He recommended customers make use of the timers on their appliances to set them to run when solar power was being generated.

"On top of that you can get energy management systems that can range from a basic style that looks after your hot water to one that turns on and off your spa, fridge, underfloor heating… that can refine it down to using 70 per cent or 80 per  cent of your solar production."

What's changing?

The problem for the distribution networks in particular is that their pricing structures are not set up to cater for anyone who is generating their own electricity.

Lines companies' costs are largely fixed but their charges are split between a daily fixed rate and a portion based on household energy consumption. When customers switch to solar, they cut this variable charge, even though they still require the infrastructure to get power to their houses for the times when solar is not providing.

Do you have a solar panel?

Written by Susan Edmunds. First appeared on