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The Mystery of Missing Solar Subsidies: A Closer Look at New Zealand’s Solar Energy Policy

Solar PV array installed at the beehive, Wellington NZ

 

As a country committed to renewable energy, New Zealand has set an ambitious goal of achieving 100% renewable electricity by 2035. However, solar energy adoption remains low, partly due to the lack of government subsidies for residential and commercial installations. Let’s explore the reasons behind this policy choice and its implications for our nation’s renewable energy landscape.

Weighing the Costs and Benefits

One possible explanation for the absence of solar subsidies is the government’s cost-benefit analysis. With over 80% of our electricity generated from renewable sources, primarily hydroelectric and geothermal power, investing in a nationwide solar subsidy program may not yield significant additional benefits in terms of emissions reduction and job creation.

Capitalising on Existing Renewable Resources

New Zealand is fortunate to have abundant hydroelectric, geothermal, and wind resources. The government might prefer to focus on expanding these established sectors rather than investing in solar subsidies, thus maximising our nation’s existing strengths in renewable energy.

Letting Market Forces Drive Solar Adoption

Our government may believe that market forces should determine the pace of solar energy adoption. As the cost of solar panels continues to fall, solar energy becomes more economically viable without the need for government intervention, encouraging a more efficient and competitive market.

The absence of solar subsidies in New Zealand has impacted the growth of our solar industry, but we continue to make progress towards our renewable energy goals through other means. As solar technology improves and costs decrease, we may see solar energy becoming more competitive in our nation, even without government support.

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