Generate your own electricity
It is possible to generate your own electricity using solar panels, small wind turbines, or hydro power – these technologies are often called ‘micro-generation’.
Micro-generation systems can be used on households, farms, business or industrial sites. These technologies have most commonly been used in off-grid or ‘stand alone’ situations, however it is becoming increasingly common to connect micro-generation to the electricity network so you can use the grid as backup and sell excess power back to your electricity retailer. These types of systems are sometimes called ‘grid-tied’, or ‘grid-connected’ systems.
Generating your own electricity is not for everyone – it can be expensive and it depends on what the renewable resources in your area are like.
Generally, it is easier and cheaper to save energy and make your home energy efficient than to generate electricity, but in some cases – especially rural properties that are not connected to the main electricity grid – micro generation on site can be a viable and cost-effective option.
On this page you’ll find out more about making your own power, including:
- Why energy efficiency and conservation should always come first
- An overview of microgeneration
- Types of microgeneration
- Choosing a system
- Where to go for more information
Energy efficiency and conservation first
If you are interested in generating your own electricity it makes sense to first consider opportunities for lowering your electricity demand in your house.
Reducing energy use and ensuring your home is energy efficient will not only save you money in the first instance, but if you also invest in micro-generation, it will reduce the size (and therefore cost) of the generation system you will need.
If you are building a new house, you’ve got even more opportunity to make your home as energy efficient as possible.
Overview of micro-generation
Generating your own electricity from renewable sources can be well suited for rural properties that are not connected to the electricity network, and in some instances they are suitable for urban settings as well. These are some of issues to consider before getting started:
- Micro-generation can be cost-effective if you are not connected to the electricity network (connection costs are typically up to $25,000 per kilometre).
- Typically, systems are modular and can be expanded over time when demand increases
- In off-grid situations, you can effectively ‘lock in’ the cost of your electricity at the time you buy your system, making you less vulnerable to electricity price rises
- As the market grows and technologies advance, the costs of the technologies are expected to come down.
- The set-up costs of micro-generation can be high, and it is generally cheaper to buy electricity from an electricity retailer. However, if your property is off-grid micro-generation may be cheaper than connecting to the electricity network
- All micro-generation systems require maintenance
- If you are off-grid you need to carefully manage your electricity use. This may mean you have to limit the number of appliances that can be used at any one time. In some modern systems this is done automatically by smart inverters/controllers
- Most off-grid systems require some form of back-up generator (usually either diesel or petrol-based), and a battery bank, to ensure a continuous supply of electricity. This will add to the overall cost of the system. Investing in a larger battery bank generally means you need to use your generator less.
Types of micro-generation
There are three main renewable energy sources from which you may be able to generate power for your home:
- The sun – solar electric panels. Solar electric panels, also known as photovoltaic or PV panels, use the sun’s energy to generate electricity. The advantages are that they are virtually maintenance free and are fairly unobtrusive. On the down-side, PV tends to be quite expensive. Read EECA's Photovoltiacs Fact Sheet [PDF 343 KB] to find out more.
- The wind – small wind turbines. Wind can be used to generate electricity via a small wind turbine. These are best suited to rural properties exposed to strong and consistent winds – most urban centres are not well suited for small wind turbines. Read EECA's Small Wind Turbine Fact Sheet [PDF 3 MB] to find out more.
- Rivers or streams – micro-hydro power. Micro-hydro schemes operate on the same principle as large hydroelectric plants. A suitable water supply, such as a stream, river, or reservoir is needed. The big advantage of micro-hydro is that, unlike solar or wind systems, it can generate power virtually continuously, depending on the water supply. Read EECA’s Small Hydro Fact Sheet [PDF 283 KB] to find out more.
In off-grid situations, it is common for a range of technologies to be used together to generate enough electricity for a dwelling, or community - these are known as 'stand-alone power systems'. Because these systems are not connected to the electricity network, batteries are required to store electricity, and a backup generator is often required to generate if the wind is not blowing, or the sun is not shining. Read EECA’s Stand-Alone Power Systems Fact Sheet [PDF 252 KB] to find out more.
Choosing a system
There are many different technologies and designs of micro-generation systems available. The design of your system will be unique to the energy requirements of your situation, and the resources you have available. In all cases you should seek expert advice to help you design and install your micro-generation system. Suppliers and installers of systems will be able to help assess which options are best for you.
The Sustainable Electricity Association of New Zealand (SEANZ) is the industry association that exists to promote the micro-scale technologies. You will find further helpful information at their website.
Obtain consent from your local council
In most cases you will require either a building or resource consent, or both, for your micro-generation system. You need to discuss your consenting requirements with the planning and/or building consent officer at your local council. In some cases your expert will be able to provide advice on your local council requirements. Note that resource consents for hydro generation require consultation with regional councils.
Your council may be interested in issues such as:
- Are the related products compatible with the New Zealand Building Code?
- Will the system be installed by specifically trained or qualified people?
- What are the environmental impacts of the installation? E.g. any noise from a small wind turbine, or diversion of water for hydro systems.
Grid-connected systems: apply to connect with your local electricity lines company
If you are connected to the grid, and are planning to install any form of micro-generation at your property, you are required to make an application with your local lines company (sometimes called the ‘network’ or ‘distribution’ company). This is the company that manages and maintains the lines that deliver electricity to your house.
They will typically need to know things like:
- the type of generator you are connecting;
- its size (nominal capacity);
- details of any inverter or battery bank you will be using; and
- the location of the point of connection.
They need to check whether the information you provide is consistent with their connection and operation standards.
Under new government regulations, they can charge you up to $200 for a connection (for a generator less than 10 kW), $60 to carry out any onsite inspections of the installation prior to its commissioning and take no longer than 30 working days to process your application.
You can find out which network company is serving your area by visiting the website of the Electricity Networks Association of New Zealand.
Grid-connected systems: investigate electricity retailers
If you are connected to the network company, you might also be able to sell surplus electricity that you’ve generated to your electricity retailer. This means that when your system is generating more electricity than what you need – for example during the day when no one is home – you could be paid for the surplus electricity produced.
If you want to do this, your current electricity meter will need to be replaced with a new meter that separately measures the quantities of electricity imported from and exported to the network. This will allow your retailer to apply the appropriate rates for electricity consumed by you and for electricity exported and sold back to them. Once you have entered into an agreement with your retailer to sell back your excess electricity, they will arrange for a suitable meter to be installed. There will likely be a charge for upgrading your meter and this can typically range from $100 to $300.
Each electricity retailer will have its own terms and conditions for buying your electricity. Likewise, the price that they will offer you will also vary. The price they pay per kilowatt hour (kWh) is called the ‘buy-back’ price.
