Abundant energy for business

Reinvigorating the private sector with rooftop solar

New Zealand commercial and industrial businesses collectively use 52% of the country’s electricity. Using zoning data and satellite-derived building outlines we’ve calculated that these businesses have 82 million square metres of roof space.

If businesses install solar panels equivalent to 10% of their roof area this would add 2GW of generation capacity nationally. Regional sunshine profiles show this would produce 2.6TWh of electricity in a typical year, equivalent to 6% of New Zealand’s annual electricity generation.¹ This is also half of the total 5.2TWh of electricity produced using coal and gas in 2024, the most recent dry year.²

Satellite Imagery and building outlines, Auckland: Land Information New Zealand

How does business solar help us in a dry year

Hydroelectricity is around 60% of production. Dry years occur when lower precipitation and snowmelt lead to low hydro lakes and wholesale power price spikes. Our hydro lakes function as large batteries, with the storage lakes nominally full at 4500GWh.

The plot below looks at mean monthly hydro storage across 2024, with projected water saved from business solar generation demand displacement added cumulatively.

2GW of business solar would generate 580GWh in a typical Autumn, 320GWh in Winter, 780GWh in Spring and 920GWh in Summer. In addition to the modest contribution in Winter, solar generation would reduce demand on hydro schemes throughout the year. This would allow the lakes to retain a cumulative 1500 GWh of stored water by August, all other factors being equal.³ This is the same volume of additional generation sought by the LNG terminal proposal.⁴

How do the costs and benefits line up

The latest energy statistics show commercial and industrial businesses spent $5 billion dollars on electricity in 2024.⁵ With businesses paying on average $0.23 per kWh, the 2.6TWh generated by businesses’ solar would be worth $480 to $600 million dollars per year.⁶ Modelling suggests energy instability and price increase have resulted in 2025 GDP being $5.2 billion lower than it would have been otherwise since 2017.⁷

With the significant price and efficiency improvements in solar technology, we estimate this investment would be achievable for less than $3 billion. Under the current accelerated depreciation policy, $1.08 billion of this cost could be deducted as a business expense in the first year. After 5 years, the full $3 billion cost will have been depreciated, and an additional $2.4 to $3 billion in electricity costs saved, for an asset with an expected life of 25+ years⁸.

How might business demand match solar generation

Many businesses have their highest energy use during the day when the sun is shining.⁹ Using and generating energy in the same place avoids significant transmission and distribution costs. It also means that flexible hydro can be saved for later in the day, week or even season in a dry year. Abundant distributed solar energy could lead to lower overall electricity costs and businesses using more energy in production of goods and services without facing escalating costs.

The potential generation and demand impacts of these investments can be illustrated at East Tāmaki, a major centre of commercial and light industrial businesses in East Auckland, compared to the nearby Ōtāhuhu reference node. There are 2.4 million square metres of roof space in East Tāmaki. Solar panels equivalent to 10% of this roof area would have a nominal capacity of 57MW and generate 77GWh of electricity annually, equivalent to the demand of 10,000 houses.

Overall, Auckland businesses would have capacity for 652MW of solar generation capacity with 10% of roof area in solar panels, producing 862GWh of electricity annually. Even though solar panels are less productive on average during winter, they would still generate significant quantities of electricity during the day. During dry years, analysis by Rewiring Aotearoa has shown that solar generation is historically 11% higher than average in the lead up to winter.¹⁰

How do the costs and benefits compare to LNG

Gas has historically played a significant role in system flexibility and security at a low cost. The $1.3 billion+ LNG proposal recently announced by the government would be paid for by a yearly infrastructure lease cost of $90 to $180 million, proposed to be paid for by a $2 - $4 levy on every MWh of electricity. On top of this, the annual fuel and generation costs to produce the desired 1.5TWh of electricity are estimated at between $300-375 million.

The proposal is intended to mitigate the risk of a dry year, where there is lower than average rainfall throughout the year leading to lower hydroelectric production. A dry year is forecast to occur ever 3-5 years, so the total cost for 15 years could be between $2.3 - $4.6 billion, while producing a total of 4.5TWh to 7.5TWh. Compared to this, 2GW of business rooftop solar would produce 39TWh of electricity over 15 years for $3 billion and continue producing for another 10+ years.¹¹

How did we estimate business solar potential

We combined district plan spatial data from 62 of the 67 territorial authorities in New Zealand with 99% of the population and 98% of buildings by area. This data classifies different geographic areas into categories like City Centre, Commercial, Industrial, which we used this to assign building outline data from LINZ as belonging to businesses¹². Based on this analysis, we found that 16% of buildings by area are zoned for business, commercial and industrial uses.

Further analysis

This analysis could be extended with access to richer datasets available within the industry and regulators. This detailed data would also allow realistic modelling of distributed battery benefits and the role of grid-forming inverters, both of which would be considerable.

Statement of Interests

We have worked with various private and public sector organisations, including in the energy industry. They have no input into or connection with our public interest analysis.

1. From NIWA (now Earth Sciences NZ) Solarview tool https://data.niwa.co.nz/solarview, using representative profiles for each of NZ’s 16 regions. This tool takes long term actual solar irradiance data, typically over 10 years, incorporating weather and cloud cover, and panel orientation. For the purposes of the estimate, we used north-facing, 10°angled panels. We assume 21% system efficiency including panels and electrical losses.

2. Electricity statistics | Ministry of Business, Innovation & Employment

3. Gas electricity generation has played an important role in stabilising hydro lake levels, and did so in 2024 and 2025, as did demand response. This visualisation does not account for substitution dynamics, minimum outflows, and other complexities of hydro’s role in the market.

4. Preserving 1.5TWh of storage in the hydro lakes over a longer period would with solar would make the same capacity available for the three months of highest demand even if it was accumulated over a longer period.

5. https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-statistics/electricity-statistics

6. New Zealand business electricity costs include both consumption costs and fixed charges based on their peak demand. These calculations use the average rate for simplicity but could be made more precise with detailed data. At the low end, we assume 5 out of seven days are consumed on site.

7. Government Investment in Dry Year Risk Cover: Consideration of an LNG Import Facility

8. By comparison the private market sector made $70 billion in capital investment in the March 2025 year. This figure includes all private market investment, that additionally incorporates primary sector businesses. https://www.stats.govt.nz/information-releases/national-accounts-income-and-expenditure-year-ended-march-2025/.

9. The Electricity Efficiency and Conservation Authority have published analysis of business daytime load profiles and alignment with seasonal solar generation https://www.eeca.govt.nz/assets/EECA-Resources/Research-papers-guides/Commercial-scale-solar-in-New-Zealand.pdf

10. https://www.rewiring.nz/watt-now/why-solar-makes-sense

11. For simplicity we have not calculated maintenance costs and system degradation.

12. Due to unavailability of data, this analysis does not include Wairoa District, Ōtorohanga District, Stratford District, Ruapehu District and Chatham Islands, which had a combined population in the 2023 Census of 43,092. LINZ building outline data is based on algorithmic analysis of aerial imagery. This data is not all up to date - for example, Auckland’s data dates to 2017. This means that the area estimate for Auckland is likely to be materially underestimated.