So you want an electric home?
What is an electrified home? Don’t we already have them?
Kind of. Our lights, dishwashers and ovens are mostly electric, but there are still a lot of households that burn fossil fuels for water heating, space heating, driving and cooking. An electrified home swaps some or all of those fossil fuel machines for much more efficient electric equivalents and, if they’re able to, adds solar panels to generate cheap electricity and batteries to store it for use when it’s most needed.
It’s expensive to upgrade to electric appliances and solar. What about the upfront cost?
The upfront costs are usually higher for electric appliances and vehicles, but they’re much cheaper over the long-run. New Zealand is one of the first countries to reach what we call the electrification tipping point because our fossil fuels are so expensive and the price of electric machines has come down so quickly. This means households and businesses can save money right now if they electrify their appliances and vehicles, even with the upfront costs and finance built in.
It also means we can significantly reduce our emissions. So when the time comes to repair or replace those fossil fuel machines, we want New Zealanders to know that it makes even more sense to go electric.
How much can the average home save right now?
Every home is different but, on average, homes currently using gas appliances and petrol vehicles could save around $1,500 per year (and around $4,500 per year if they can get a low interest loan) if they choose electric equivalents and get their electricity from a combination of rooftop solar, home battery and New Zealand’s highly renewable grid.
Homes that use more power and hot water and use their vehicles more than others generally get the most savings through electrification.
When should I upgrade?
Every machine, whether it is a car, a gas water heater, or a coal power plant, has a natural lifetime before it has to be scrapped or replaced. Gas hobs are expected to last for 13-15 years, while cars are closer to 20 years. So if your appliances, systems or vehicle are due to be replaced, your next purchasing decision should be electric. In most cases it won’t make sense to scrap a perfectly usable appliance, but in some cases, it actually makes financial sense to replace these machines before their use-by date.
If you’re building a new home, you get to start fresh and it makes no economic or environmental sense to have a gas connection. Every new fossil fuel machine purchased or built now locks in years or decades of further emissions and increasing energy costs.
Globally, the cost of heat pumps, electric vehicles, solar panels and batteries continues to fall due to economies of scale and higher than anticipated demand. In New Zealand, fossil fuel prices are among the highest in the world and the price is expected to continue rising. Grid electricity prices are also expected to increase, and solar and batteries basically lock in the price of electricity for the next 15 years.
The economic argument for electrification already stacks up, and it will continue to improve as costs decrease. And if you’re worried about emissions, electrification is likely the single biggest thing you can do to reduce them.
Looking for a condensed version of these guides to hand out at your own electrification event?
The Main Machines
There are savings on the table right now with electric machines. And while relying on electricity from the grid to power all your appliances will still save money and reduce emissions compared to using fossil fuels, you’ll save the most with rooftop solar.
Space Heating
15 Year Saving
$10,000 - 16,000
Emissions Saved
High
Install Cost
$3,000 - $10,000
Heating a home with electric heat pumps delivers the lowest cost heating bills and the lowest emissions. Heat pumps deliver three times lower energy bills than gas heating, and ten times lower emissions. When purchasing a new gas or LPG heater, a home is locking in thousands of kilograms of emissions over the lifetime of that heater. By purchasing an electric appliance, a home is avoiding all of those emissions.
Water heating
15 Year Saving
$4,000 - 7,000
Emissions Saved
High
Install Cost
$3,000 - $10,000
Hot water heat pumps have a higher upfront cost, but create the lowest ongoing energy bills for homes. A shower powered by a heat pump water heater with solar is less than a quarter of the cost of water heating with gas. Resistance electric water heaters can also be similarly low-cost if combined with rooftop solar but will have higher ongoing energy bills than heat pumps.
Cooking
15 Year Saving
$0 - $1000
Emissions Saved
Moderate
Install Cost
$3,000 - $5,000
Cooking doesn't use a lot of energy but electric cooking is lower cost (and much lower emissions) than cooking with gas, and there are more savings on offer if the cooktop is the last gas appliance in the home because you can avoid paying gas subscription/fixed costs. The lowest cost cooking option is resistive electric, while induction electric offers lower cost operation (bills), but is more expensive upfront.
Cooking with electricity is also better for your health because you’re not pumping toxins into the home. Using an induction cooktop is around one third cheaper than a gas hob and safer because the surface doesn’t get hot.
Driving
15 Year Saving
$10,000 - $19,000
Emissions Saved
Very High
Purchase Cost
$30,000 - $70,000 new
Electrifying your vehicles is the single biggest thing your household can do from both a bill savings and emissions savings perspective.
Even with recent changes to Road User Charges, the lowest-cost driving comes from electric vehicles charged at home via the grid and especially with cheap solar. Electric cars are more expensive upfront, but over their lifetime end up lower cost due to the savings on petrol/diesel bills and maintenance costs. As more new EVs are purchased, there are also an increasing number of second-hand options on offer that make driving even cheaper.
Filling the 50 litre tank of a petrol vehicle is about $130 (at $2.60 per litre), while filling the ‘tank’ of an electric vehicle to go the same distance is about $30 from the grid, and about $10 from solar, before RUCs. Fast chargers are more expensive but the majority of EV charging is done at home.
Rooftop Solar
Payback Period
5 - 7 years
Emissions Saved
Moderate
Install Cost
$12,000 for 4.4kWh
Rooftop solar is the cheapest form of delivered energy in New Zealand, at less than half of the average price of grid electricity. As vehicles and homes electrify, each household will need up to twice as much electricity, and the lowest cost way to produce much of this additional energy is likely by generating as much as is feasible from rooftop solar. This also increases resilience as households can still generate their own electricity and store it in a home battery when the grid is down.
Prices for fossil fuels and grid electricity are set to continue rising, while solar panels lock in a lifetime of savings and low emissions.
Home Batteries
15 Year Saving
$3,750
Emissions Saved
Moderate
Install Cost
$700 - $1300 /kWh
Battery storage, from household to utility-scale batteries and within electric vehicles, is a game changer in the energy transition, and batteries are approaching a tipping point where they make economic sense for the majority of homes. Whether you're aiming to save money on electricity bills, minimise your carbon footprint, or prepare for emergencies, now is the time to consider investing in a home battery, especially if you can access a low-interest green loan.
The Barriers
Based on the results from our home energy survey, there are plenty of barriers when it comes to electrifying the home. Those barriers range from a lack of knowledge and independent advice to a lack of appropriate options to finance the upfront costs. Every region is different. Every household is different. And every supplier is different. There is no one size fits all solution, but there are some good rules of thumb. Here’s how you can get over some of those barriers.
Electrification can be a confusing realm and there is a lot of conflicting information out there. The Electric Homes report is a good source of information around costs and try to find others who have electrified their homes to get recommendations for installers.
Getting multiple quotes is always recommended.
The more you know, the better you’ll be at telling suppliers what you want. Some providers may be incentivised to offer, for example, gas hot water systems because they’re easier to install or they’ve been doing it for so many years. If you’re building or renovating, knowledge is power, so knowing that fossil fuel machines will always cost you more than electric machines over their lifetime is important to take into any discussion.
Rewiring Aotearoa is creating an electrification community, where advice and resources can be shared, and there are a range of other helpful communities on social media like NZ EV Owners or the Australian community My Efficient Electric Home.
When it comes to solar, check your sunlight hours on NIWA’s Solar view. In many cases, even if you think there’s not enough sun in your region or your roof doesn’t face the right way, solar panels could still work because they generate electricity even when it’s cloudy and the efficiency of panels has improved so much.
We also know from talking to solar installers in New Zealand and in other markets that only around 5% of roofs are unsuitable for solar.
The upfront cost of installing electric machines and solar puts many people off. It can feel like a long payback time but when you are making a purchasing decision you also need to factor in the cost of fuelling that machine and electric machines will save you tens of thousands over the lifetime of the machine. In some ways, it’s just about swapping fuel for finance. All the major banks offer low-interest green loans to home loan customers, but we are pushing for longer term loans.
More work needs to be done here to educate the banks and make the application process easier. But even when you build in the upfront costs and interest costs, electric homes save you tens of thousands over 15 years.
For those who are unsure how long they will be in a home, or how long the family will be there, it can also be hard to look too far into the future.
These investments will often save you money straight away, and some research suggests that the addition of solar can add value to the property if you do come to sell it.
There are many private finance options available that may help you afford the upfront cost. Many of them require you to have a home loan with that institution but some offer low-interest loans for more sustainable products like hot water heat pumps. Here are some current options available:
- Green loan low-interest finance offers from lenders such as ASB, BNZ, Kiwibank, Westpac, ANZ and others.
- MoneyHub has a good rundown of the funding options, from mortgage top-ups to green finance credit cards, and what to be aware of.
*Please note we do not endorse any of these options, and suggest you always consult a financial advisor.
How easy or hard it will be to electrify your home depends on the kind of home and appliances you have, but many other people have been through this process and there are generally solutions to all of your problems. Our energy experts are also happy to help so get in touch with your questions and concerns at hello@rewiring.nz.
Heat pumps for space heating are now extremely popular in New Zealand, and there are a lot of reputable installers that may only need a few hours for installation (depending on things like roof space or access to an outdoor area).
Hot water heat pumps are a newer technology, but they are also growing in popularity. It can be complicated to retrofit a gas hot water system, especially if there are radiators as well, and it may require an upgrade to your wiring, but more companies are offering these services and the savings and emissions reductions are generally worth the initial disruption.
Induction cooktops require a certified electrician to install (and maybe a plumber if disconnecting gas), but there are also portable options.
In other markets, there are a growing number of one-stop home electrification shops. At this stage, there aren’t many, if any, in New Zealand, but we would love to create a market for that. If you’re an installer and want to chat about the potential business opportunity, you can also get in touch via hello@rewiring.nz
Installation of solar panels can take less than a day and many solar companies can also install EV chargers at the same time. For those without a readily accessible powerpoint where you park your car off the street, that can be easily solved. And installing a smart charger means you can benefit from cheap solar energy during the day, or cheaper grid electricity at night.
While around 50% of solar installs now include a home battery, things are changing rapidly in this space. We now have EVs that can feed energy back into the grid or power your home. While this is only available on newer (and more expensive) models, cars are becoming transportable batteries and smart tech means users can set limits on how low the battery can go so they can still get to where they need to go.
We feel your pain. Rewiring Aotearoa is advocating strongly for a fairer system where customer generation is able to compete with any other form of generation. We believe there is still a bias towards large-scale generation (supply-side solutions) when the rapidly reducing cost of customer generation like solar means there has never been a stronger argument for customers to play a role in the energy system.
We are pushing for cost reflective two-way tariffs (ie better export rates) in New Zealand as that will speed up the payback period and incentivise adoption. It will also bolster our energy security as many of the electric machines can be fuelled by the little power plant on your roof and peak loads can be reduced with the help of batteries.
In the meantime, some retailers do offer incentives and better buy-back rates for solar and battery exports. Time of use plans and free power periods are good for those with batteries and electric vehicles, so have a look on Powerswitch for the best plans. But remember this key point: swapping your energy source from fossil fuels to electricity is likely to save you much more than swapping your electricity provider.
Renters make up around one third of New Zealand households, and are left behind on reaping the full benefits of efficient electric homes. Rewiring Aotearoa, and other organisations, are advocating for better renters rights to rectify this but fixing the finance so that these technologies are available to everyone and providing incentives to landlords to electrify their properties so tenants benefit is crucial. Whether you’re a renter or not, write to your MP and demand access to electrification finance - and incentives!
If you are renting, consider discussing upgrade options with your landlord. Some landlords may be open to installing solar panels, especially as it is likely to enhance the property value and attractiveness as a rental. And when it comes to installing other electric machines in the property, you could calculate a value proposition and negotiate a slight rental increase in exchange for bill reduction.
Renters can get most of the benefits of an EV even if it has to be charged via the grid, and there are also a range of very affordable portable options like plug in induction stoves and even portable heat pumps.
FAQ
New Zealand’s grid is over 80% renewable and we should rightly be proud of that. But only about 30% of our total energy consumption is renewable because we are so reliant on fossil fuels for transport and industry. When you look at it that way, we’re not so renewable. We need to reduce our reliance on expensive fossil fuels and start relying on more affordable, locally-produced electricity.
Rooftop solar is the cheapest form of energy humans have ever created and the cheapest form of delivered energy in New Zealand (ie the price that customers pay, not what it costs to generate and transport). investing in solar basically locks in decades of electricity at the same price, while battery technology allows us to store that electricity and use it at peak times.
The prices for other energy sources - including grid electricity - are expected to keep going up, but the price of solar and batteries look set to keep going down.
As taxpayers, we also don’t want to spend too much upgrading poles and wires to cope with all the electricity we’ll need in the future when homes, businesses and farmers could be part of the energy system and generate affordable electricity for themselves or sell it and create a new revenue stream.
Efficiency is important and we want as much insulation as necessary to limit the health impacts of New Zealand’s homes. But it doesn’t have to be either or. Electric machines are - in general - significantly more efficient than their fossil fuel counterparts. This is important to understand as it drives many of the cost savings available through electrification. For example, heat pumps deliver three times lower energy bills than gas heating, and ten times lower emissions. It will likely be cheaper and more effective to install a heat pump than to pay for double glazing or additional insulation.
This isn’t really about giving something up. It’s about doing more of something that’s much better. While it sounds counter intuitive, using more renewable electricity at the right times is part of the solution for New Zealand because it means we will need to burn less fossil fuel.
The average New Zealand home with a petrol car and gas heating and water uses around three times the energy of a fully electrified home and car.
The main benefits of electrification are lower costs for households, but electrifying everything in your household or businesses is likely to have a bigger impact on emissions than any other decision you make.
Dinner table decisions made by households are an underappreciated opportunity for the country to reduce its emissions. They make up over 30% of our domestic emissions, and electrification is low-hanging fruit for reductions. We just need to start thinking about sectors like transport as part of the home.
There are issues with any kind of mining and we support anything that ensures safety and environmental standards are maintained. But fossil fuels are single use mining and if you think about the amount of material you need to consume to run a fossil fuel machine, it is far greater than running that same machine with electricity. It’s like a backpack vs a plastic bag. If we use locally-made electricity to charge our more efficient electric vehicles and appliances, New Zealand will be much better off both economically and in terms of emissions.
Many of the rare earth metals that are mined for batteries, like cobalt and lithium, and other materials needed for renewable energy like wind or solar can be re-used or recycled. The industry is already making great strides when it comes to creating a more circular economy - like finding uses for old batteries - and as that improves there are some who believe we could eventually get to a post-mining world.
We certainly need more renewable generation. But we just have to use that electricity in the right way and try to generate as much of it ourselves. On Mike Casey’s farm, he’s increased the electricity use by 900% compared to the previous farmer after swapping fossil fuel machines for electric equivalents. About half of that is generated with solar and stored in batteries, but grid electricity is still required. Because he doesn’t use any more electricity at peak times, however, there is no undue stress on the system or any need for additional fossil fuel electricity. It also costs less.
Because electrified homes are so much more efficient, they need less energy overall (likely less than half), but they will need double to triple the amount of electricity for their vehicles and appliances.
Where we get all that extra electricity from is a strategically important question for New Zealand. Generally, the country has focused on building new generation (supply side) but consumer energy like rooftop solar and batteries (demand side) should play an important role and needs to work alongside the grid. Also, renewable energy technologies continue to drop in price and it is vital to take this into account when planning for and building out our energy system to be low cost and resilient.
New Zealand has a very real chance of becoming the world’s most electric economy. We have a rich history of electrical innovation. We created the world’s first all-electric home, with the world’s first practical electric home water heater; the southern hemisphere’s first electric public lighting in Reefton; the world’s first electric gold dredge; the world’s first wet steam geothermal electricity power station; and, more recently, the world’s first electric orchard.
The country could go from importing billions of dollars of some of the world’s most expensive fossil fuels to saving billions and reducing emissions by instead using locally produced electricity in more efficient electric machines. This will lead to more cost effective homes, businesses, farms and industries.
Small countries make up a large chunk of the world's emissions when you add them all together and if we can improve our energy productivity and prove our self-sufficiency - something New Zealand has always prided itself on - then we can have an influence on the global climate discussion.
Absolutely not. We’re very much pro-grid. We need a reliable grid and we need as much large-scale renewable energy generation as possible to meet expected demand, but we also need to mix that in with small-scale renewable generation closer to the point of consumption and customers need to understand that rooftop solar is the cheapest form of delivered energy in New Zealand.
Useful Resources
- Rewiring Aotearoa's Electric Homes report: Indepth research on the economic and environmental benefits of household electrification, including different scenarios.
- Energy Efficiency and Conservation Authority (EECA): helpful info on the benefits of home electrification and a rundown of heat pumps.
- Genless: Stories, tools and a whole range of actions you can take - including electrifying your home - to benefit your pocket, your wellbeing and our climate.
- My Efficient Electric Home Facebook Group: An active Australian community where people can ask questions or research how others have gone about their journey -
- MoneyHub: A good rundown of the various funding options for electrification, from mortgage top-ups to green loans.
About Rewiring Aotearoa
Rewiring Aotearoa is an independent non-partisan non-profit. It is a registered charity working on energy, climate, and electrification research, advocacy, and supporting communities through the energy transition. The team consists of New Zealand energy, policy, and community outreach experts who have demonstrated experience both locally and internationally.
We're in it for you. We’re always fighting for the New Zealanders who use the energy system. Our work gives households and businesses the information and inspiration they need to make decisions that will reduce their costs and their carbon emissions.
Our Purpose
By combining research, communication and demonstration, Rewiring Aotearoa will accelerate climate action and transform the energy system to benefit all New Zealanders.
Our Team
Rewiring Aotearoa is a group of New Zealand leaders who work within the climate, energy, policy, data and storytelling space. We believe the cross section of these skills will help us rapidly electrify Aotearoa New Zealand. See available roles here.
Our Funding
Rewiring Aotearoa’s New Zealand-based team is primarily funded by a group of New Zealand-based philanthropists, with a small chunk of funding generated through projects and donations from supporters.
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