Solar water heaters were criticised in a report by the Parliamentary Commissioner for the Environment, Dr Jan Wright, released this week, as being less cost-effective and having less environmental benefits than thought.
While solar water heaters did reduce carbon dioxide emissions from power plants, they did little to reduce the pressure to build new peak generation, the report said.
Nearly 12% of all electricity generated in New Zealand was used for heating water in households.
The existing technical framework, including ripple control and smart meters, would reduce peak load on the national grid, and the country just had to make greater use of that technology, Mr Kerr said.
The main use of power at peak times during cold winter nights was heating, cooking and lighting, not water heating, he said.
"I don't really see any link between solar hot water heating and peak load."
Solar water heating did take the pressure off in an indirect way, by reducing demand for electricity generated from lakes, so there was more energy available at those peak times.
Mr Kerr, who held a seminar on solar energy in New Zealand and Government policy at the University of Otago last week, said the end of the Energy Efficiency and Conservation Authority solar programme had left the solar industry a "very good basket of systems, technology and a skilled installation network".
It had raised the quality of standards and the ongoing subsidy was not justified anymore.
The challenge for the industry was to maintain that quality and, through its customer assurance scheme and accreditation processes, he hoped it would do so.
It was also providing guidance on what systems would work for different climates, which was one of the key recommendations Dr Wright made about EECA in the report.
