The average NZ household spends $2,000–$2,600 a year on electricity. Most households can cut this by $400–$800 through a combination of switching to a better plan and making targeted efficiency improvements. This guide covers both.
1. Switch retailer (saves $200–$500/year) — immediate
2. Hot water cylinder timer or heat pump hot water (saves $200–$400/year)
3. Draught-proof your home (saves $150–$300/year)
4. Switch to LED lighting throughout ($50–$100/year)
5. Turn off devices on standby ($50–$100/year)
1. Switch Electricity Retailer
This is the single biggest lever. The NZ electricity market is competitive — retailers regularly offer lower rates to attract new customers, but don’t automatically offer them to existing ones.
How: Go to powerswitch.org.nz, enter your ICP number and usage details, and compare quotes. If you find a plan saving more than $150/year, it’s almost always worth switching. The process takes 15 minutes online.
Savings: $200–$500/year depending on current retailer, region, and usage.
2. Check If You’re on the Right Tariff Type
NZ has two residential tariff types:
- Low User: lower daily charge, higher unit rate — better for households using less than 8,000 kWh/year
- Standard User: higher daily charge, lower unit rate — better for high-usage households
Check your total annual kWh from the last 12 months of bills. If you’re using under 8,000 kWh/year but on a standard tariff, ask your retailer to switch you to the low-user tariff. This can save $100–$200/year for eligible households.
3. Manage Hot Water Heating
Hot water accounts for roughly 30–35% of the typical NZ household power bill. Options to reduce this:
Ripple control: If your hot water cylinder has a ripple control switch (most Auckland homes do), your lines company turns the cylinder off during peak demand. In return, you get a discounted off-peak hot water rate. Make sure your retailer is applying this discount if you have ripple control.
Hot water cylinder timer: A $50–$80 timer on your cylinder heats water only in the evenings and mornings — the two periods when you use hot water most. The cylinder’s insulation maintains temperature for 6–8 hours. Can save $150–$300/year.
Heat pump hot water: A heat pump hot water cylinder is 3–4× more efficient than a standard electric cylinder. Upfront cost: $2,500–$4,500 installed. Typical savings: $400–$600/year — payback period of 4–8 years. Eligible for EECA grants in some cases.
Solar hot water: Solar hot water panels are less common post-2020 (solar PV + heat pump is now often more cost-effective), but can work well for large households.
4. Draught-Proof Your Home
Cold drafts in winter make your heating work harder. Sealing gaps costs almost nothing and can noticeably reduce heating costs.
What to check:
- Gaps under external doors (fit door snakes or draft excluders — ~$15)
- Unused chimneys (fit a chimney balloon — ~$40)
- Gaps around skirting boards and floorboards in older homes
- Gaps around window frames
5. Get Your Insulation Up to Standard
The biggest factor in heating costs is how much heat your home loses. Underfloor insulation and ceiling insulation make a dramatic difference.
EECA Warmer Kiwi Homes grants: If you own a home built before 2000 and have a Community Services Card, you may qualify for an 80% government subsidy on insulation and heat pumps. Check eligibility at energywise.govt.nz.
Even without a grant, ceiling insulation ($900–$1,500 installed for a typical home) typically pays back in 3–5 years through reduced heating costs.
6. Use a Heat Pump for Heating (Not Resistance Heating)
Electric resistance heaters (bar heaters, column heaters, oil column heaters) convert 1kWh of electricity into 1kWh of heat. Heat pumps convert 1kWh of electricity into 3–4kWh of heat by moving heat from outside air.
Running a 2.5kW heat pump instead of a 2.5kW bar heater for 3 hours each evening through winter saves roughly $500–$700/year in a cold climate.
If you have an older home with plug-in heaters, a heat pump is the single biggest efficiency upgrade available. Government subsidies may be available via the Warmer Kiwi Homes programme.
7. Switch to LED Lighting Throughout
LED bulbs use 75–85% less electricity than halogen or incandescent bulbs. A typical NZ home has 20–30 light fittings. Switching all of them to LED costs $50–$80 for the bulbs and can save $80–$120/year.
If you still have any halogen downlights (warm, yellowy spotlights in the ceiling), replacing them with LED versions is one of the easiest wins.
8. Shift Usage to Off-Peak Periods
If you’re on a spot pricing plan (Flick Electric) or a time-of-use plan, shifting heavy electricity usage to off-peak periods saves money directly.
Even on a standard flat-rate plan, shifting washing machine, dishwasher, and dryer use to after 9pm and weekends benefits you if you switch to Electric Kiwi’s Hour of Power plan.
Peak hours to avoid: 5–9pm weekday evenings (highest demand on the grid).
9. Use Appliances Efficiently
Washing machine: Cold water washes use roughly 10× less energy than hot washes. Most modern detergents work equally well in cold water.
Dryer: The most energy-hungry household appliance after hot water and heating. Line-dry where possible; use a heat pump dryer over a resistance-element dryer if you’re replacing one.
Dishwasher: Run full loads only; use eco mode; let dishes air-dry rather than using the heated dry cycle.
Fridge/freezer: Keep the fridge seal intact; don’t put hot food directly in the fridge; keep the fridge set to 3–4°C and freezer to -18°C.
10. Turn Off Devices on Standby
Devices on standby use a surprisingly high amount of power cumulatively — the average NZ home wastes $80–$120/year on standby power.
High standby users:
- Old TV sets and set-top boxes
- Game consoles
- Microwaves with clocks
- Old desktop computers
Use power strips with a master switch to kill standby power from entertainment systems and computer setups.
11. Curtains and Window Coverings
Up to 40% of a home’s heat loss in winter is through windows. Heavy curtains that cover the full window (including the sill) can significantly reduce heating costs. Adding curtain tape to existing curtains to ensure they seal against the wall costs very little.
Thermal-backed curtains or lined Roman blinds make a noticeable difference in rooms that are hard to heat.
12. Apply for the Winter Energy Payment
The Winter Energy Payment is a government support payment available to NZ Superannuation recipients and most working-age beneficiaries from 1 May to 1 October each year. It’s paid automatically to eligible households — no application required.
The payment helps offset higher winter power bills. If you or someone in your household receives NZ Super or a benefit, check that you’re receiving this.
13. Consider Solar PV (Longer Term)
Rooftop solar is increasingly cost-effective in NZ. A 5kW system costs $8,000–$14,000 installed and typically produces 5,000–7,000 kWh/year in most NZ regions. Combined with solar battery storage, this can offset 60–90% of your power bill.
The economics work best for households that:
- Have good north-facing roof space
- Own their home
- Have high daytime usage (work from home, EV charging)
- Can afford the upfront investment
14. Compare Hot Water Cylinder and Pump Settings
Many hot water cylinders are set to 70–75°C from the factory. The recommended temperature is 60°C (hot enough to kill Legionella bacteria, but lower than factory default). Reducing from 70°C to 60°C can reduce hot water heating energy by 5–10%.
Also check whether your heat pump is set to “auto” mode — many people run heat pumps in heating mode when cooling would be cheaper, or vice versa.
15. Use a Smart Power Monitor
Clamp-on energy monitors (like Powerpal, compatible with NZ smart meters) show real-time electricity usage in dollars and kWh. Seeing your usage in real time is one of the most effective ways to identify what’s using power and change behaviour.
Many NZ smart meters also provide half-hourly data through your retailer’s app or portal. Use this to identify your biggest usage periods.