Most New Zealand households are paying more for electricity than they need to. According to Powerswitch, over 94% of people who check their bills through the comparison tool find they could save money, with average savings around $350 per year. That is nearly $30 per month that could instead go toward your mortgage or savings.
Low User Versus Standard Plans
New Zealand electricity plans are divided into two main categories: low user and standard user. Choosing the wrong category is one of the most common and costly mistakes households make.
Low user plans have a lower daily fixed charge but higher per unit rates. They suit households using less than 8,000 kWh per year in the North Island and upper South Island, or less than 9,000 kWh in the lower South Island. Typically these are one or two person households in well insulated homes, often with gas for heating or hot water, spending less than $160 to $180 per month on electricity.
Standard user plans have a higher daily charge but lower per unit rates. They suit households with higher electricity consumption, typically families or homes relying on electric heating and hot water.
Choosing a low user plan when you are actually a standard user, or vice versa, can cost $100 to $300 per year in unnecessary charges. Your electricity retailer must offer you the cheaper option for your usage level, but many households never check whether they are on the right plan.
2025 Changes to Low User Plans
The government is phasing out low user regulations over five years. From April 2025, the cap on low user daily charges increased from $1.20 to $1.50 per day, an increase of approximately $2.50 per week after GST.
This change affects elderly people and those who have invested in energy efficiency or solar power. If you are on a low user plan, your fixed charges will continue rising each year until the low user category is completely phased out.
The silver lining is that as low user fixed charges rise, per unit rates for low users may decrease, and standard user fixed charges may also come down. The net effect varies by retailer and region, making comparison shopping more important than ever.
Time of Use Pricing
Time of use pricing charges different rates depending on when you use electricity. Peak periods are typically weekday mornings from 7am to 11am and evenings from 5pm to 9pm. Off peak periods include weekday middays, nights, and weekends.
The price difference between peak and off peak can be substantial. Some retailers offer rates that are 30 to 50% cheaper during off peak times, with overnight rates sometimes half the daytime price.
Time of use pricing suits households that can shift their major electricity usage away from peak periods. Running the dishwasher at 9pm instead of 6pm, using the washing machine on weekends, or setting your hot water cylinder timer to heat overnight all capture savings without changing your lifestyle significantly.
Provider Options for Time of Use
Several retailers now offer dedicated time of use plans:
Flick Electric offers cheaper rates for 76% of the week through their Off Peak plan, covering 11am to 5pm and 9pm to 7am on weekdays, plus all weekend.
Electric Kiwi provides discounted shoulder rates, half price overnight rates, and a free hour of off peak power daily on their MoveMaster plan. Their morning peak window is shorter than competitors, running only 7am to 9am.
Octopus Energy offers half price energy overnight (11pm to 7am) with competitive off peak rates during weekday middays and weekends.
Powershop offers Get Shifty time of use pricing in many network areas, with lower rates during off peak periods.
From July 2026, the Electricity Authority will require all major retailers to offer time of use pricing, giving more households access to these options.
Electric Vehicle Night Rates
If you own an electric vehicle, dedicated EV plans can significantly reduce charging costs. Meridian offers discounted electricity from 9pm to 7am on their EV plans. Genesis offers half price power from 11pm to 7am for EV owners.
Charging an EV overnight on these plans costs roughly $3 to $5 for 100km of range versus $7 to $10 during peak times. Over a year of typical driving, the difference can exceed $500.
Using Powerswitch
Powerswitch is a free government backed comparison tool that checks over 15,000 residential power plans from 14 providers covering 96% of the market. The tool uses your actual usage data to estimate costs with different retailers.
To get accurate comparisons, have a recent electricity bill handy. Powerswitch will ask for your address, current retailer, and consumption figures. The tool then shows what each available plan would cost based on your actual usage patterns.
You can switch between low user and standard plans once per year, and there is no fee to switch retailers. Most switches complete within five business days.
Hidden Costs and Considerations
When comparing plans, look beyond headline rates:
Prompt payment discounts of 10 to 20% are common, but you lose the discount if payment is even one day late. Calculate whether you can reliably pay on time before counting these savings.
Fixed price guarantees lock your rates for a set period, protecting against increases but potentially missing decreases. These suit households wanting predictable bills.
Exit fees or contract terms apply to some plans, limiting your flexibility to switch if a better deal emerges.
Dual fuel bundles combining electricity and gas sometimes offer savings, but not always. Compare unbundled options separately to confirm actual value.
Solar and Battery Considerations
If you have solar panels, choosing the right electricity plan becomes more complex. Key factors include:
Feed in tariffs for exported power vary significantly between retailers, from 7 cents to over 15 cents per kWh. A higher feed in rate can be worth hundreds annually if you export substantial power.
Time of use alignment matters because solar generates most power during the day while you may consume most in the evening. Battery storage shifts solar generation to evening use, but even without batteries, running daytime loads when solar is generating maximises self consumption.
Low user plans often suit solar households because grid consumption is reduced, but the phase out of low user regulations will affect this calculation over time.
Practical Steps to Lower Your Power Bill
Beyond choosing the right plan, small behaviour changes compound into meaningful savings:
Check your hot water thermostat is set to 60 degrees rather than higher. Each degree above 60 wastes approximately 2 to 3% of hot water heating costs.
Use timers or smart plugs to run high consumption appliances during off peak periods. Dishwashers, washing machines, and clothes dryers are easy to schedule.
Check your heat pump filters monthly during winter. Dirty filters force the unit to work harder, increasing electricity consumption by up to 15%.
Turn off second fridges or freezers when not needed. A spare fridge running constantly can cost $150 to $200 per year in electricity.
The Mortgage Connection
Electricity is a fixed household expense that directly affects your budget and mortgage serviceability. Saving $350 per year on power is equivalent to earning $450 to $600 before tax, depending on your income level.
For mortgage applicants, lower household expenses improve your debt to income position. Banks assess your ability to service the loan based on existing commitments, and demonstrating control over recurring costs strengthens your application.
For current mortgage holders, redirecting electricity savings toward extra mortgage repayments compounds over time. Even $30 per month extra on a $600,000 mortgage at 6.5% saves approximately $40,000 in interest over the loan term.
Check Your Plan Today
Most households stay with their current electricity provider out of inertia rather than informed choice. The 15 minutes required to check Powerswitch could return $350 or more annually for years to come.
If you have not compared plans in the past two years, if your household circumstances have changed, or if you are unsure whether you are on a low user or standard plan, today is a good day to check.
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