Stewart Island Solar Project Begins to Cut Diesel Use and Lower Power Costs

Construction has begun on a major solar energy project on Stewart Island/Rakiura that will reduce the island’s reliance on diesel-generated electricity and cut power prices, Regional Development Minister Shane Jones and Associate Regional Development Minister Mark Patterson say.

Mr Patterson was on the island today to turn the first sod on the Government-backed energy upgrade.

The Regional Infrastructure Fund (RIF) provided a $15.35 million loan to Southland District Council to help strengthen the Island’s energy resilience and bring real cost relief to a remote community that doesn’t have the convenience of connection to the national grid, Mr Jones says.

The start of construction reflects strong community support and careful local planning. It responds directly to the challenges they have identified including high power costs, supply risk, and long-term resilience, Mr Patterson says.

Stewart Island/Rakiura has about 494 permanent electricity connections and relies entirely on diesel generators for its electricity supply. Households and businesses currently face electricity prices more than twice as high as on the mainland.

The project is being delivered by the council through the Stewart Island Electricity Supply Authority, which owns and operates the island’s electricity system.

The project involves installing a solar farm and battery system, along with electricity network upgrades and smart meters. It is expected to cut power prices by up to 35 cents per kilowatt hour and reduce diesel use for power generation by up to 75 per cent.

The project is expected to be completed in early 2027. It will support around 40 fulltime-equivalent jobs during construction, with long-term benefits for tourism, aquaculture and other local industries as energy costs come down.