Labour banks again on retail politics with generous solar plan

Wednesday, 8 July 2026

ANALYSIS: Labour’s spruiking its plan to support households that install home solar systems as “well researched, well developed” , and a plan that will put the National Party’s effort in the shade.

Last month National put forward its own tokenistic or “targeted” election policy — depending how anyone chose to frame it — that would see a future National government support the provision of low-interest loans for solar and battery installations.

The loan scheme certainly looked like a “spoiler” to Labour’s plans, and that is how Labour party leader Chris Hipkins chose to frame it.

“If the National Party wants to try and desperately scramble together announcements to get ahead of the work that we’ve been doing, that's up to them,” he said on Wednesday.

Read more:

• Labour unveils $160m household solar package funded from Gas Security Fund

• National promises renewable energy fund for households, repaid through rates

• Home solar systems or grid-connected solar farms, which make most sense?

New Zealanders would see Labour’s plan was a very well researched, well developed policy that we’ve been working on for some time, he said.

“We consulted extensively on it, so it wouldn’t have been hard for National to find out that we’ve been working on this.”

Labour’s policy, which the party has costed at $160m over four years, is much more comprehensive, generous or expensive than National’s alternative — again depending on how anyone wants to frame it.

Notably, its plan would include not just cheap loans but grants of up to $3000 for 25,000 low and middle income families to install solar systems with or without batteries.

Energy spokesperson Megan Woods says the total cost of the subsidies will be capped at $77 million, which raises the possibility that either the eligibility criteria might need to be quite strict or the grants might need to be offered on a first-come, first-served basis. (National’s plan comes in at an estimated $7m)

The Labour party has indicated it would fund the programme by cannibalising the coalition Government’s $200m Gas Security Fund, which is designed to revive the gas exploration industry by providing grants for gas exploration or storage.

Woods notes Budget documents indicate only $1m of the fund has been spent to date, but the Government has revealed 11 applications for funding are currently under consideration.

What if the money isn’t available by the time the election rolls around?

Woods argues it would be irresponsible for the Government to “rush through” applications for the gas fund money in only four months.

But the coalition now has extra political incentive to ensure there is little left in that particular kitty by November.

Woods says if the money was no longer available to be re-purposed for its SolarSaver scheme, then that would be something Labour would address in its yet-to-be-announced fiscal plan.

But it would be an understatement to say Labour finance spokesperson Barbara Edmonds will already have her work cut out addressing a lot of other issues in that plan.

Those include how Labour might restore pay equity agreements, temper public service cuts and get the country back on track with its Paris Agreement climate pledge while public debt sits close to the top of the comfort levels of the Treasury and credit ratings agencies.

The question of whether subsidising solar installations makes sense for taxpayers is a thorny one.

Hipkins said solar was “the cheapest form of electricity available”.

If that is the case, it raises the question of why subsidies are needed, given most home-owners can already borrow against the equity in their homes.

And while home solar may sometimes be the cheapest type of power for home-owners to consume due to the higher-than-necessary prices charged by power firms, that does not mean it is the cheapest type of power to generate from an “NZ Inc” perspective.

That is evidenced by the fact that billions of dollars are being invested in both wind farms and grid-connected solar farms at present without any form of government subsidy.

The only cap may be how much of those types of intermittent energy generation the market can absorb.

If there was a surprise in Labour’s policy announcement, it may be the $30m it is proposing for “community batteries” — independent of any investment in solar generation — to store power locally within neighbourhoods.

That appears a recognition that many, if not all, of the public benefits commonly associated with rooftop solar systems — such as reduced investment in electricity lines infrastructure and improved resilience — are really more down to the batteries that often go with them, rather than the panels themselves.

But it does, again, raise the question of why — if they will lead to cheaper power — it isn’t in the interests of others, lines companies in this instance, to pay for them themselves.