Solar power isn't the best option for New Zealand compared with other renewables, but the opportunity could emerge as costs decline, a minister said.

An annual review of the New Zealand energy sector from the International Energy Agency described the country as a "success story" for its ability to advance on low-carbon options like hydro-electric power and geothermal energy, all without government subsidies.

New Zealand Energy Minister Judith Collins said at a conference Thursday that some sectors, like solar power, aren't as competitive when compared with wind or geothermal energy.

"The government's view is that solar power is currently not the most economic and efficient option for New Zealand compared to other renewable alternatives that we have available," she said.

Researchers from the University of Canterbury warned two years ago that solar power could be a sound investment for some types of homes, but the rate of returns was sensitive to a variety of competing factors. For the commercial sector, returns are "very sensitive" to location, tariffs and other factors. As a result, their study found lower cost options for renewables should be considered first.

"At the utility scale [solar photovoltaics] is not yet commercially attractive, even excluding transmission and distribution charges and opportunity cost of land," the study found.

During a visit to the United States, the energy minister said California researchers were showcasing batter-storage technologies and other advances that could improve the reliability and cost for solar power.

"This could see solar generation become cost competitive with grid-based generation across the board within a decade, and batteries could help improve network utilization," she said.

Oil is the fourth-largest export for New Zealand, bringing in around $700 million each year in royalties and taxes. The government said there are around 149 million barrels of oil reserves remaining in fields already in production.

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