I spent $89,000 on turning my house into a solar powered setup, which sounds, I will admit, unhinged until you realize I treated this like an investment.

Believe it or not, it was a cold, calculated financial decision.

The same way you'd think about buying a house or building a shares portfolio.

This was about spending money to make and save even more later.

And here's the thing.

I think you could get the same benefits I've now locked in, but you could spend way less.

I actually don't think you should spend what I did to get solar power and an electric car because I did this 18 months ago.

And even in that time, the tech has improved, the prices have shifted, and I'm confident that you could learn from what I did and then do it cheaper and smarter for your situation.

So in this episode, I'm opening it all up.

The real numbers, what it cost, what it actually saves, and whether it all stacks up financially.

Spoiler alert.

This setup is outperforming my shares portfolio.

So if you do, then turn around and do it smarter than me.

Well, I'm hoping that you will do even better out of this.

So welcome to Making Sense.

It's the podcast people who want financial freedom without giving up their coffee.

I'm Francis Cook, a financial journalist and fellow financial freedom seeker who makes money simple to you.

Let's get into it.

So why are we talking about this at all?

Well, you are not imagining it.

Electricity prices are an absolute killer.

I did some quick research for us, so get ready for your jaw to hit the floor.

Stats NZ tracks all of this stuff.

Electricity prices jumped 6.2% in the year to April 2025, and that is well ahead of general inflation, which was already not going great for us.

And of course that is just one year, right?

But it is not a one off.

Prices went up 4.9% in 2023, 4.6% in 2024.

We are already seeing these steady climbs for a core bill that most of us can't avoid each and every year.

Well beyond the other price increases in other areas of life.

And then Consumer NZ released a warning earlier this year saying they tracked a 12% increase in power prices last year.

Their conservative estimate is that it goes up another 5% this year.

Love this for us.

Definitely not at all depressing.

What is going on?

Okay, we have a few things happening at the same time.

There's more than one factor in the mix.

First up, a lot of New Zealand's electricity network was built in the 1960s and 70s and desperately needs Replacing.

So we have this old creaky network.

Also, one of the costs in your power bill is the cost of the power lines themselves.

Last year the Commerce Commission said lions companies were allowed to charge us more in order to maintain that creaky old system, which in some ways I get it, but can we get a break here please guys?

So that's adding an average of $10 a month to household bills.

Now there are more increases coming on that front through to 2030.

On top of that, natural gas supply in New Zealand has been declining.

That push pushes up electricity prices whenever the hydro lakes are running low.

And they have been running low.

So look, I'm sure there are some electricity nerds out there saying it's more complicated than that.

It always is.

But those are some of the big factors.

There will be more, but basically it sure is expensive.

It is getting wildly more expensive every day.

You are not imagining it.

This does indeed suck.

I went to Canstar to get some figures on how much we're all paying and in 2025 the average New Zealand household now pays around 34 cents per kilowatt hour for electricity.

That means we're spending about $200 a month on power on average.

And plenty of households are paying a lot more than that.

I was one of those.

More on that soon.

You're probably going to yell at me over how much I was spending on power, but oh well, such is life.

Now look, I'm laying all of this out not because I want to smack you with the bad news stick and make you feel utterly depressed, more because I think it's really important that we get the lay of the land here.

The direction of travel for power prices is clearly upwards and that is the reason that getting strategic about your power usage has gone from a nice to have to to genuinely smart financial planning.

Solar is it for you?

It was for me.

But let's start out wider in general and then narrow in on my decision to spend an obscene amount of money and call it smart money management.

Look, it seems that I am not alone in my decision to go for this.

The number of home solar systems in New Zealand has more than doubled in just three and a half years.

So it was around 31,000 systems in 2021.

It's over 62,000 by mid 2024 and it's probably far more than that by now.

Those are just the most up to date numbers I could get you.

Anecdotally, I've been hearing that just in the last few months and particularly as we've Seen oil prices shooting up thanks to the latest energy crisis.

Solar providers have been overwhelmed by requests.

I would love to see those numbers once we have some official stats through here.

But before the latest panic, why were we already seeing those numbers going up?

And it's probably because it's getting so much better and cheaper to put in Solar.

You are getting more back, but spending less every single year.

So back in 2009, the average home solar system cost about $40,000, and that was for a basic 3 kilowatt setup.

Now, by 2024, that's just 15 years later, the average residential system had grown to more than double a maximum output of 7kW.

Meanwhile, the average cost of that fallen to around 16,500.

So cost more than halved, Electricity coming out more than doubled.

Overall, you're getting back four times as much bang for your buck.

Yay maths and yay technology.

The technology is getting better and cheaper at the same time, which is not something you can say about very many things these days.

Let's take the wins where we can get them, folks.

All of this was top of mind about 18 months ago when we decided time to go all in.

Now, we'd talked a bit about solar before in our household, but it felt like the case for it was building up.

Bills were getting more expensive, solar technology was getting better, electric vehicles were getting better.

It was just all round tipping more and more towards the numbers making sense.

So sat down with my husband, did the thing I truly hate most in the world, and looked at a spreadsheet gross.

Longtime listeners of the podcast will know.

Not my happy place, but we looked at our power usage, we looked at what various systems out there were promising, and we decided it was time to get actual quotes and estimates from professionals.

The whole idea being invest in this once, save ourselves a lifetime of energy costs.

One big upfront payment that stops us paying those many smaller payments that actually add up to more over a longer period of time.

So how did I end up spending quite so much money?

Right, nerds, enjoy.

Here's exactly what we did for the house and the solar system itself.

Solar panels with a 3 phase 10 kilowatt inverter, a 10 kilowatt battery to store the power, a fast charger for the car, a Bluetooth hot water timer so I could control when the hot water cylinder heats up and make sure it was running off that solar during the day.

Total cost for that home solar system, $34,000.

At the same time, because we wanted to make the most of this system, we also got an electric vehicle and on that we spent a truly eye watering $55,000.

You do not have to spend that much.

You can get such good stuff for a lot cheaper than that.

We wanted for it to have a decent range.

For this one, I could drive it from my home in Te Amuto to Auckland and back and then make that round trip a second time before running out of battery.

That range and battery life is a big factor in the cost of an electric car.

If you don't need it to go far, you've got so many cheaper options.

I'm on the road quite a bit for work, so yeah, I wanted that.

It's also big enough to be the main family car, so we spent quite a bit on that car.

It could have been less.

More on that later.

I'm coming back to it.

So, altogether, $89,000.

Like I say, that is so much money.

I think you could do it cheaper.

But before we get into that, how do we pay for that at all?

As always, this is not financial advice, but I think a key part of our decision was that it was financed by what is known as a green loan from our bank at 1% interest and some banks will do them for 0%.

Being able to create this investment in our future using borrowed money that cost us almost nothing, that entirely changes the investment maths.

Now, most of the major New Zealand banks have these green loans as part of your mortgage for solar and battery installations.

And some of them will also do the lending for an electric vehicle too.

That just makes it so much more achievable.

You just need to make sure you're committed to paying it off within the time limit on that low interest rate.

It's often a shorter loan term, somewhere between three and five years.

You can absolutely make that work.

Now, a side note here on how we actually did it as well.

We got four quotes from different providers.

We got them to do things like look at our property, check out the amount of sun and shade we got, look at our current electricity usage, provide estimates of how much we would generate and, and what that would mean for our power bill.

We made them do the hard bits and then compared what they'd given us.

If someone can't give you specific answers, keep looking.

There are quite a few companies doing this these days.

They should make it easy for you to give them a bunch of money.

We talked to big companies and then some smaller local providers.

Look, your experience may vary here, but I found the smaller local providers were super onto it, willing to customize it so we got the absolute maximum out of the system and really smart and helpful about teaching us the system so we could then run our house really well on it.

So don't overlook the little guys.

And speaking of how you pick a company, look, this next bit is a personal opinion, but it's a strongly held one.

There is a business model out there where it's like a rental model where the company installs panels on your roof essentially for free, but you then pay them for the power the panels generate and it's on a really long term contract.

Now it can sound good on the surface.

You get free panels, it's a lower overall power bill.

Yay, right?

But there have been some really bad situations come out of this idea.

Some made the news when particular companies folded and then there was legal difficulties about who owned the panels.

Can you sell your house and transfer the solar contract to someone new?

You don't own the panels and the benefit of them and then you're locked into this 20 year rental contract.

It's just dicey and complicated and not good.

I personally would not touch one of those schemes with a barge pole.

If that is something you are looking at, be extremely cautious.

I don't rate the idea buying it yourself.

Using a green loan to do it makes so much more sense to me.

So was it worth it?

Well, we are fairly heavy power users in general.

This bit makes me squeamish to share.

Actually this whole episode makes me squeamish to share because I just know people are going to judge for spending too much or not doing it right or whatever and sure, probably.

But I am a believer that if you're in, you're all in.

So here we go, sharing everything.

My power usage from a person who is not as frugal as people seem to expect me to be.

So I looked it up and our average household power usage is a bit over double the average New Zealand households usage.

So we do have two adults who work from home, we have two kids, we have an electric vehicle.

So it's kind of our petrol bill as well.

But pre solar our power bill was roughly $400 a month on average.

That is $4,800 a year and that is before the 2025 power price increases.

It's a lot, I know that now a year later and this includes charging the car at home our bills are negative in summer as in the power company is paying us and in the winter we're sitting at around 200amonth.

This is not because we have reduced our power usage at all in fact, it is worse than ever.

Honestly, I thrash the power so much more now because, because it is free and this feels so luxurious.

During the day I've got the kids clothes going through on a hot wash because they are grubs and I need to blast that bacteria with everything I can.

And then I'm biffing their stuff straight into the dryer because there is so much of it and I need to get through it fast.

And I'm also using the aircon or the heater whenever I want.

I don't care.

To just use power and not care is something that creates this little mental luxury in my life that just feels so good, you guys.

The cost savings are great, but also mentally knowing that I don't have to worry about that cost is amazing.

One time the jeans I wanted to wear that day weren't quite dry, so so I biffed them in the dryer all by themselves while we were having breakfast.

And then I got to put on warm jeans, which also feels great, but it was so wasteful and it didn't matter.

And then, you know, there was another situation which maybe this is a little specific to me, but I just don't worry about power cuts anymore.

If it's in the day, we have the solar already, but even if it's at night, we've got the battery.

One time I was about to do a webinar.

You guys know I do live webinars roughly once a month.

This one was a topic that clearly a lot of people were interested in.

There was about 2,000 people signed up, ready to go, and then suddenly 20 minutes before going live power cut.

Can you imagine disappointing 2,000 people at once can't be having that.

But we had solar.

So the wi fi kept going, the camera kept going, my lights in the home studio were still going and it was totally fine.

And my lord, the relief.

And okay, most people probably aren't running live webinars, but power cuts are annoying no matter what and it just stops being a problem.

Now us being home during the day is also part of how the maths works.

Going to get more into that soon.

But beyond that mental luxury and the immediate power price relief, how did the maths of it actually work for us?

Pretty well.

In fact better than the share market.

So I think one key thing to whether solar is a good call or not is that it needs to be a long term decision.

Unfortunately, solar investment doesn't really seem to add to the value of your house.

If you sell, you don't necessarily get more because you've got solar panels.

So it's about substantially reducing your costs and then sticking around long enough that you have these reduced costs for a long time.

It pays off that initial investment, and then you're eventually making money by saving money.

Now, my rough calculations put the return on investment for us at 15.6% with a payback period of around six and a half years.

That's because it saves us over $4,000 a year.

We are also able to sell some power back to the grid, so it makes us a little money.

So total benefit divided by total cost, that gives return on investment percentage.

It's also tax free because we've saved money, not really earned any.

So saving yourself rich really works nicely there.

Now, maybe you think six years is a long time, but the panels last around 25 years.

So that's a couple of decades of free power after we get through that payback period.

And honestly, I think it'll be shorter than that because I've calculated it based on today's power prices, and we've already talked about how they're getting higher every day.

So it could actually be much less time than that, because every power price increase means your solar savings are worth even more.

Now, before you start thinking I'm a solar salesperson, I want to talk about something that gets really overhyped and is just, frankly, not true.

Solar is amazing for saving you a cost.

I don't think it's amazing for actually making you money.

Can you save yourself rich?

Absolutely.

But I don't think you should bank on this, bringing in a good amount of actual dollars, because this is something people ask me about all the time.

They're often like, oh, and you can make so much money selling back to the grid.

Right.

And I really want to lower your expectations on that front.

You can sell back what's called excess power, anything you make that you're not using up, but the price you get for it is low.

Some of our biggest power companies will pay you around $0.08 per kilowatt hour, but when you're buying it from them, you're paying over 40 cents.

So you see how big that difference is, really.

The system works well when you're actually using the power you're generating, rather than sending it back to the grid for a fraction of the price that you'd pay to get it back.

This is why we decided to invest in the battery to store that excess power for ourselves.

Use it in the evenings, night and early morning when the solar isn't generating it, made way more Financial sense to us that way around.

So how would you use it smarter if you are home during the day?

Slam dunk.

This works well.

Maybe you're work from home or a stay at home parent or retired.

That means you can run the dishwasher in the daytime and do the washing between meetings, use the dryer, charge your car, whatever.

If you're not home during the day, then can you make timers and automations your best friend?

Lots of dishwashers or washing machines have timers.

Some will remote connect to an app where you can turn it on even when you're at work.

Those are the sorts of things you'd want in order to make sure you're making the most of it.

In winter we get even sneakier because there's slightly lower sunlight hours.

We will use the battery that we got as part of the solar system and we will get it to charge up in the wee hours of the morning like 3am because you're getting cheaper off peak power.

So when we get up in the morning and it's still dark and cold and I want to crank that heat pump, I'm boosting us with cheaper power that we bought overnight and not using the more expensive peak price power because everyone is getting up at the same time.

Having the solar system means that even when I'm not using actual solar power, I can still be smarter and cheaper.

About the little top ups that I use, it's a bit like buying low and selling high and you're still playing the market.

It's just the electricity market now.

Could it have been cheaper?

Yes.

I spent, I will happily admit, an insane amount of money.

$89,000 Total.

34,000 On that solar system, $55,000 on the electric car.

The version of myself that wrote my first book, Tales from a Financial Hot Mess, simply could not conceive of me spending that amount of money and being okay with it.

Part of me is still not okay with it.

But this is why I always say do not Compare your Level 1 journey with someone else's Level 5.

As you make changes to your money, you step up the levels one at a time and different things become possible to you as you change your financial life.

When I wrote that first book, I was probably at level two and being really frugal in that moment was super important.

And then making plans to increase my income through my job and investing was all part of that long term plan for my money.

And now I am at level five and I do get to say a slightly bigger car is important for our family right now and I will spend that accordingly.

It took me time to get here.

I followed all of the steps that I talk to you guys about all the time and I change the calculations that I'm able to make now because of that.

Still not going to go full Mike Hosking and buy a Ferrari because that just doesn't bring me joy.

But we're all making different choices.

But if I was at a stage, a different stage of my money journey, I could have totally done this differently and here's how I would have done that.

Our solar setup is more expensive than you would need in order to get a good result for lots of other homes in New Zealand.

So we're going nerdy again.

But we have a larger three phase system, partly because of how our house is wired and partly because we went for a bigger battery.

If your roof has more usable north facing surface area with less shading, you'll likely need a smaller, simpler system.

We're semi rural, there are some big trees around us that can shade the roof.

We had to have a system that took that into account.

A single phase setup with a more modest inverter and battery will cost significantly less than what we spent.

And for many households it will do the job just as well.

That's why you get the solar companies to give you accurate modeling for your property and not just some one size fits all system.

Be a Karen, but a nice one.

Who cares?

Karens make the world go round.

You're paying them money, they can earn it.

Ask heaps of questions and figure out the best system for you.

I spent $34,000 on the system, but the average residential solar installation in New Zealand is around 7 kilowatts and costs roughly 16,500.

That's less than half of what we spent on the solar and battery setup.

So if our numbers feel out of reach, just know the entry point can be a lot lower.

And if you have a north facing roof, no big trees blocking half of it, you might be totally fine with that.

If you're thinking about an electric car, you have far more options than we did even 18 months ago and at far more accessible price points.

You don't need to spend $55,000 to get a perfectly good electric car that will charge off your solar and slash your fuel costs.

I think you could get probably a similar result for about half of what we paid.

And if you need less than we did, you could cut it back to under a quarter of what we spent.

And honestly, if you do, I will be cheering for you.

I just want us all to do well.

So if you're listening and thinking, should I do this?

Let me break down what I think are the most important factors for you to consider.

If you own your own home, have decent sunlight on the roof, a home during the day, or are prepared to invest in a battery and some smart automation and you can get a green loan at low interest, the numbers genuinely stack up for most people.

For me, a 15% return with a payback period of six years is hard to argue with.

But go in with open eyes.

And even though it can be painful, don't skip the research step, get multiple quotes.

Don't skip the smaller local installers because in my experience, they often give better, more tailored advice than the big chains and they'll choose the equipment that suits your actual situation rather than what's easiest to package up and sell to the most people.

I love the little guys always had a better time with a smaller local outfit.

The difference in quality of advice between our best and worst quote was significant.

Then you've got to do the maths for your specific house.

How much solar can your roof actually generate?

Given its orientation to the sun and any shading, how much of that will you realistically use yourself?

What is your power company paying for exports right now?

What's the best time of use plan?

These numbers matter and they vary a lot from household to household.

For me, working from home, getting a battery, the green loan, the electric car, it made sense.

Your maths might look different, but with power prices heading the direction they are heading, this is probably a conversation worth having sooner rather than later.

The numbers not only made sense for me, but it also did something else I talk about here all the time.

It used money to take away a significant source of stress in my life.

I am not stressed by the current problems with petrol prices.

I am not stressed by the mountain of washing that my children create.

Well, actually, maybe, maybe I am slightly stressed by that, but I'm not stressed by the power used to get through it.

And I can now thr trash the power to get through it even faster.

Which hallelujah.

I have paid to remove so many frictions from my life and that is truly all I ever want my money to do for me.

And I've done that while it is still overall a better financial outcome as well.

So yeah, I'm happy with the outrageous amount of money I spent for me.

So worth it for you, maybe.

Or maybe you can do it better than I did.

And if you do, love that for you.

If this episode was helpful.

Send it to a friend so we can all level up with money together.

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Until next time, have a great day.

This podcast can only give you general information about how things work in in most situations, it's not individual financial advice.

If you're after that, a financial advisor is always the best bet.