Solar
How a home solar system actually works
Four pieces of equipment and one decision the system makes thousands of times a day, which is whether to use it here or send it out. Understanding that decision explains most of solar's economics.
A home solar system has four parts and makes one decision over and over. Once both are clear, most of the rest of the subject falls into place.
The four parts
Panels. On the roof, producing direct current whenever light falls on them. They respond to light, not heat: a cool bright day is a good day.
An inverter. Converts DC to the alternating current a house and the grid use. It is also the brain: it decides moment to moment what to do with what is being produced, monitors output, and disconnects when it has to. Most system problems are inverter problems.
A meter that records both directions. Your existing meter may already do this or may need changing. Import and export have to be measured separately, because they are priced differently and usually very differently.
The connection into the switchboard, plus the paperwork with your lines company. Which brings us to a step people do not expect.
The approval nobody mentions in the brochure
You cannot simply connect generation to the network. Your lines company has to approve it, and it sets an export limit, a cap on how much you may push back into the grid. Limits vary by network and by connection type, and the Electricity Authority has been tracking the sector's shift toward 10 kW export limits as one of its published indicators.
This matters when sizing a system. An array large enough to exceed your export limit on a good day is an array whose surplus is being throttled, and you paid for the whole thing. Ask the installer what the limit is on your network and how the design sits against it, in writing, before you sign.
The decision the system makes
Every moment the system is producing, the electricity goes to whatever the house is using first. Only the surplus is exported.
That order is the whole economics of solar:
- Electricity used in the house saves you your retail rate, currently a national average of 42.04c per kWh including GST as at May 2026, and considerably more in expensive network areas.
- Electricity exported earns a buy-back rate, which is set by your retailer and is normally well below what you pay to import.
So a unit consumed at home is worth more than a unit exported, often a lot more. Everything people say about running the dishwasher at midday, or putting hot water on a timer, comes from this one asymmetry.
Why it shuts down in a power cut
If the grid goes down and your system carried on exporting, it could put voltage onto lines that a crew is working on. So grid-connected inverters detect the outage and stop. This is called anti-islanding and it is not a fault.
Keeping power through an outage means a battery and an inverter configured for backup, usually with a dedicated circuit for essential loads. It is a specific piece of design, not something that arrives with any solar system, and it is worth confirming in writing if it is part of why you are buying.
What to ask an installer about the design
- What is the export limit on my network, and where does this design sit against it?
- What is the modelled annual production, and what assumptions about shading and orientation is it built on?
- What share of that production do you expect us to use rather than export, and why?
- Does the system need a meter change, and who arranges it?
- Is backup during an outage included? If not, what would it take?
Those five answers tell you more about the quality of a quote than the panel brand does.
How solar works — common questions
What are the parts of a home solar system?
Panels on the roof, which generate direct current. An inverter, which converts that to the alternating current a house uses and is the component that does most of the thinking. A meter capable of recording both import and export. And the switchboard connection tying it into the house wiring. A battery is optional and separate.
Where does the electricity go when my panels generate?
To whatever in the house is drawing power at that moment, first. Anything left over is exported to the grid and earns a buy-back rate from your retailer. When the panels are producing less than the house needs — cloud, evening, winter — the balance is imported as normal. The system switches between those states continuously and you never notice.
Why do solar panels stop working in a power cut?
Deliberately, for safety. If the grid is down and a system kept exporting, it could energise lines that crews are working on. Grid-connected inverters detect the outage and shut down. Keeping power during a cut needs specific equipment — usually a battery with a hybrid inverter configured for backup — and it is not automatic.
Do solar panels work on cloudy days in New Zealand?
Yes, at reduced output. Panels respond to light rather than heat, so a bright overcast day still produces meaningfully, and cooler temperatures actually improve panel efficiency slightly. What genuinely reduces output is short winter days, low sun angle, and shade, which is why shading from a tree or a neighbouring roof matters more than the weather.
Does the direction my roof faces matter?
A lot. In New Zealand a north-facing roof at a moderate pitch collects the most over a year. East and west faces produce less in total but spread it across morning and evening, which can suit a household that uses power at those times better than a north face that peaks at midday when nobody is home. A good installer models this; ask to see it.
What we don't publish about solar
- We do not list, rank or recommend solar installers. There is no installer inventory behind this site — no verified data on any of them, and no commercial arrangement with any of them.
- We do not publish buy-back or export rates. They are set per retailer, they change, and we hold no verified rate file for any of them. Ask the retailer for their current rate in writing.
- We do not publish system prices. A quote depends on the roof, the switchboard and the install, and a number here would be a guess presented as a benchmark.
The part we can help with
Solar changes which power plan suits you, and that is an electricity decision rather than an installation one. We compare 8 power companies and can show you what each offers at your address — our comparison asks whether you have panels from the start.
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Is solar worth it?
The return comes from electricity you do not buy, so it turns on your retail rate and on how much of the production your household actually uses. Both are things you can check before getting a quote.
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Home batteries
A battery does one economic thing, converting exported units into used ones, and one practical thing, which is backup during an outage. They are separate decisions with separate arithmetic.
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Solar buy-back rates
Exporting surplus electricity earns a rate your retailer sets, and it is normally well below what you pay to import. That gap is why self-consumption matters more than array size.