Solar quotes are full of jargon, and a lot of it is used to make a system sound bigger or better than it is. Here is the plain-English translation of every term you'll meet, written so you can read a quote line by line and know exactly what you're paying for. The single most important one to get straight: kW is not kWh. A kilowatt (kW) is the size of your system; a kilowatt-hour (kWh) is the energy it actually makes and what you're billed on. A typical NZ home uses around 20 to 22 kWh a day (Electricity Authority consumption data), and a well-sized 5kW system generates roughly 20 to 25 kWh a day in summer and 8 to 12 kWh in winter. Get that distinction wrong and the whole quote stops making sense.

Why this matters before you sign anything

A solar quote is one of the few big purchases where the seller controls the vocabulary. "Up to 6.6kW of panels", "97% efficient inverter", "10kWh usable battery", it all sounds impressive until you know what each word actually does for you.

Once you can read the terms, the games get obvious. You'll spot when a quote pads the panel count to hide a small inverter, or quotes battery size in a way that flatters the number. Run through these definitions, then put a quote next to them.

The terms that decide your bill

Kilowatt (kW)

The capacity or size of something, measured at a moment in time. Your panels are rated in kW (e.g. a 5kW array). Your inverter is rated in kW. Think of it as the size of the tap, not the water that comes out.

Kilowatt-hour (kWh)

The energy produced or used over time. This is the unit on your power bill, and the unit you're paid for when you export. A 5kW system running flat out for one hour makes 5kWh. This is the number that turns into dollars, so it's the one to watch.

Import and export

Import is power you pull from the grid and pay your retailer for. Export is surplus solar you push back to the grid, for which your retailer pays you a buy-back rate. Buy-back rates vary wildly between retailers, from around 7c to 17c+ per kWh depending on the plan, while you typically pay 28c to 35c+ per kWh to import. That gap is the single biggest driver of solar economics in Aotearoa, and we keep it current here: https://nzsolarcentre.com/tariff-buy-back-engine/

Self-consumption

The share of your solar that you use yourself instead of exporting. Because importing costs far more than exporting earns, every kWh you self-consume is worth two to four times more than one you export. This is why two identical houses can get wildly different value from the same system: the one home during the day wins. It's also the quiet reason batteries pencil out for some households and not their neighbours.

Buy-back rate

The price your retailer pays per kWh you export. Note this is set by your retailer (Mercury, Contact, Octopus, Meridian and so on), not fixed nationally, and it can change. There is no national export scheme set by government in New Zealand, so don't believe any quote that implies one.

The hardware terms

Panel / module

The flat thing on your roof. Modern residential panels are usually 400W to 450W each, so a 5kW array is roughly 11 to 13 panels. "W" here is watts; 1,000 watts make 1kW.

Inverter

Panels produce DC (direct current); your house runs on AC (alternating current). The inverter converts one to the other. It's the brain of the system and usually the first thing to need replacing, often around the 10 to 15 year mark, while good panels carry 25-year performance warranties.

String inverter vs microinverter

  • String inverter: one central box that all panels feed into. Cost-effective and proven, but if one panel is shaded, the whole "string" can drop in output.
  • Microinverter: a small inverter on each panel, so each one works independently. Better for shaded or complex roofs (think Auckland's two-storey shading, or a roof with chimneys and dormers), more expensive, and easier to expand later.
  • Power optimisers: a middle option, panel-level electronics paired with a string inverter to reduce shading losses.

If your roof gets clean sun all day, a string inverter is often the smart spend. If it doesn't, paying for micros or optimisers can genuinely earn its keep.

Array

The full collection of panels working together. "Array size" and "system size" usually mean the same thing in a quote.

Clipping

A term to watch. If a quote pairs 6.6kW of panels with a 5kW inverter, the inverter caps output at 5kW on the brightest days, so some potential energy is "clipped" and lost. This isn't always bad (it can capture more energy across cloudy mornings and evenings) but you should know it's happening and not pay for panels you can't fully use.

Battery terms (where the marketing gets slippery)

Nominal vs usable capacity

A battery's nominal capacity is its total size; its usable capacity is what you can actually draw without damaging it. A "10kWh battery" might only give you 9kWh usable. Always ask for the usable figure, because that's what does the work.

Depth of Discharge (DoD)

How much of the battery you can safely use, as a percentage. A 90% DoD on a 10kWh battery means 9kWh is usable. Modern lithium batteries (LFP, lithium iron phosphate) typically run 90% to 100% DoD. This is just another way of expressing usable capacity, so don't let a quote count it twice.

Cycle life

How many full charge/discharge cycles the battery is warranted for, often 6,000 to 10,000 cycles for LFP. One cycle a day for ten years is about 3,650 cycles, so cycle life is rarely the limiting factor; the calendar warranty (usually 10 years) usually matters more.

Round-trip efficiency

Energy lost storing and retrieving power. A battery at 90% round-trip efficiency gives back 9kWh for every 10kWh you put in. The lost kWh is a real cost that quietly eats into battery savings.

Hybrid inverter

An inverter built to handle panels and a battery in one unit. If you might add a battery later, a hybrid inverter now can save you replacing gear down the track. Worth asking about even if you're not buying a battery on day one.

Grid and electrical terms

Single-phase vs three-phase

How power is delivered to your home. Most NZ houses are single-phase. Some larger or rural properties are three-phase. This matters because it affects how much solar you're allowed to export and what equipment you need. Many networks limit single-phase export to around 5kW without special approval, so a big system on a single-phase connection can hit a ceiling.

Lines company / network

The company that owns the poles and wires in your area: Vector in Auckland, Orion in Christchurch and Canterbury, Wellington Electricity, Aurora in Dunedin and Central Otago, Unison in Hawke's Bay, Powerco across Taranaki and the Bay of Plenty, and so on. They're separate from your retailer, and they set the rules and fees for connecting solar.

Distributed generation (DG) approval

The application your installer files with your lines company to connect solar to the grid. A good installer handles this for you. It's also where export limits get set, so it's worth knowing your network's stance before you size a system.

Islanding and anti-islanding

Here's one almost no one explains properly. Islanding is when a solar system keeps feeding power into the lines during a grid outage. That's dangerous for the linesperson trying to fix the fault, so by law your inverter has anti-islanding protection: it shuts off the instant the grid goes down.

The part that surprises people: a standard grid-tied solar system does NOT keep your lights on in a blackout, even at midday with the sun blazing. To have power during an outage you need a battery with backup capability and the right switchboard wiring. If keeping the lights on through a Wellington storm matters to you, say so up front, because it changes the design.

Net metering vs gross metering

New Zealand uses, in effect, net arrangements: you're billed on what you import and paid on what you export, measured separately by a smart meter. You're not paid the retail rate for everything you generate. Anyone implying otherwise is borrowing an overseas idea that doesn't apply here.

Performance and money terms

Capacity factor / specific yield

Specific yield is how many kWh per year you get per kW installed, and it's the honest way to compare locations. Thanks to NIWA solar data, Blenheim and Central Otago sit among the sunniest spots, while the West Coast genuinely makes less per kW. A north-facing roof in Invercargill can out-earn a west-facing roof in Auckland precisely because orientation often beats raw sunshine hours.

Degradation

Panels slowly lose output, typically around 0.5% a year, so a 25-year warranty might guarantee 85%+ output at year 25. Build this into any long-term savings figure; a quote that ignores it is overstating lifetime savings.

Payback period and ROI

Payback is how many years of savings it takes to recoup the system cost; ROI (return on investment) expresses the same thing as a percentage return. For most NZ homes a well-designed system lands somewhere around 7 to 12 years, heavily dependent on self-consumption and your buy-back rate. You can run your own numbers here: https://nzsolarcentre.com/solar-roi-calculator/

Dollars per watt ($/W)

The fairest way to compare quotes on price. A fully installed 5kW system in 2025 runs roughly $9,000 to $12,000, about $1.70 to $2.00 per watt (per MBIE pricing data and installer figures). Divide the quote total by the watts to compare apples with apples.

Subsidy letters and overseas schemes you can ignore

If a quote mentions an overseas rebate, credit or export incentive scheme, be wary. Those belong to other countries and do not exist here. New Zealand has no national solar rebate. What we do have is low-interest green lending through several banks, which can genuinely change the maths; you can check what you'd qualify for here: https://nzsolarcentre.com/green-finance-qualifier/

Frequently Asked Questions

What's the difference between kW and kWh in one sentence?

kW is the size of your system (the tap), kWh is the energy it produces or you use (the water), and your power bill is measured in kWh.

Will my solar keep working in a power cut?

No, not a standard grid-tied system. By law your inverter shuts off during an outage to protect line workers (anti-islanding). You need a battery with backup capability and the right wiring to keep specific circuits running.

Why does my quote list more panel kW than inverter kW?

It's a common "oversizing" design. Extra panels capture more energy in low light, but the inverter caps peak output (called clipping). It can be sensible, just make sure you understand it and aren't paying for capacity you can't use.

Is "usable" battery capacity the same as the advertised size?

Usually not. Advertised (nominal) size is the total; usable capacity, set by the depth of discharge, is what you can actually draw. Always ask for the usable kWh figure.

Who sets my buy-back rate, the government or my retailer?

Your retailer. There is no national export scheme set by government in New Zealand, and rates differ a lot between retailers, so it's worth comparing before you commit.

What does single-phase vs three-phase mean for me?

It's how power is supplied to your home. Most homes are single-phase, which can limit how much solar you're allowed to export (often around 5kW without extra approval). Your installer should check this early.

Are there any NZ solar subsidies I should know about?

There's no national cash rebate, but low-interest green loans through several banks can meaningfully improve the numbers. Ignore any quote referencing overseas rebate or export incentive schemes; those don't apply here.

What's the one number to compare quotes on?

Dollars per watt. Divide the total installed price by the system's watts. In 2025, roughly $1.70 to $2.00 per watt is the fair range for a standard install.

The Bottom Line

Once you can read the words, you can read the quote, and once you can read the quote, the sales games lose their power. Keep three terms front of mind: kW vs kWh (size vs energy), self-consumption (the real driver of savings), and dollars per watt (the fair way to compare price). With those three you'll catch most of the tricks before you ever sign.

From there it's about your own roof, your own daytime habits and your own network's rules. Run your numbers, compare like with like, and don't be shy about asking an installer to explain any term they use. If they can't, that tells you something too.