The case for energy loans: read our latest explainer
August 28: Rewiring Aotearoa has welcomed the announcement of a taskforce to address issues in the electricity market but says the time for investigating is over and it is now time for action.
PĀNUI PĀPĀHO / MEDIA STATEMENT
August 28: Rewiring Aotearoa has welcomed the announcement of a taskforce to address issues in the electricity market but says the time for investigating is over and it is now time for action.
“We’ve been loudly advocating for a level playing field for customers, not just a slightly less uneven playing field. The time for acknowledging customer problems without solving them is over and we hope that this announcement is a step in that direction. We want to see a high level of ambition and determination to solve these problems once and for all.”
One of the key parts of the announcement was that the Electricity Authority would look at the existing tariff structure for customers with solar and batteries.
CEO Mike Casey believes it’s an endorsement of the hard work Rewiring Aotearoa and other organisations have done over the years to convince officials that changes need to be made to the system that would benefit customers, rather than just the big players.
“Customers with solar and batteries need to be paid fairly for their contribution to the energy system, and that’s not currently the case. We need to change the tariff structure so it is cost-reflective and the market is providing better price signals.
“The electricity system was set up to be one way, from generators to homes. Our 21st century energy system needs to be smarter and more two-way. Customers need to be considered as a critical part of our energy infrastructure and this will be important work to bring that to life.
“The Government wants more competition and more electricity generation to ensure security of supply. Customers can compete in both of those things, but we need to level the playing field so that they are fairly rewarded.”
There is mention in the announcement about working with industry and generators, but Casey says the taskforce also needs to work with future generators and flexibility providers, like farmers, small businesses and households.
“We want to make sure they extend the same courtesy to all Kiwis because for too long customers have been getting a raw deal.”
Rewiring Aotearoa released a paper earlier this year arguing for something it calls symmetrical export tariffs, where a customer is paid the same amount for any electricity that is exported from the premises at peak times as they are charged for any power they consume at peak times.
“Customers exporting at peak times is of value to both retailers and electricity distribution businesses. And it should be valued by the market. When symmetrical export tariffs are implemented, New Zealand homes, farms and businesses with solar and batteries could contribute much more to our energy system, lower the price of energy for themselves and for all New Zealanders, and provide a more secure and resilient electricity system overall.”
“Symmetrical export tariffs are not a subsidy; they simply ensure consumers get a true reflection of the value their batteries provide to the electricity market and distribution system.”
By ensuring the true value of that export is reflected, it also means the payback time will be reduced for solar and batteries and more households will have the confidence to invest in these technologies because it makes the economics even more appealing.
“Rooftop solar can help keep water in our dams and batteries will help maintain security during winter peak demand. They can also reduce the need to spend tens of billions on expanding network infrastructure, which is funded by homes and businesses over time through their bills.”
As the paper showed, symmetrical export tariffs would mean customers with solar and batteries exporting at peak times would be paid around twice what they’re currently being paid for contributing to the energy system.
There is also an opportunity to ensure customers are paid more fairly by retailers with an export (or “buy back”) tariff that is more closely aligned to the wholesale price.
“Effectively, retailers that pay customers less than the wholesale price for solar export are profiting from solar investments that have been funded by households and businesses. That’s not fair.”
Casey says the creation of the task force is positive but these changes need to happen urgently (by January 2025) and they need to be more than voluntary measures, to ensure the review process turns into fair outcomes for consumers.
“The time for investigating is over. The sector has been investigating and talking for years and the progress has been very slow. It’s time for things to change and for customers to be taken into consideration and Rewiring Aotearoa is here to help make sure it happens quickly.”
In the last Electric Avenue of 2025, we look at the two biggest trends in the world of energy; the Government goes electric for its fancy fleet upgrade; Nick Offerman offers his services to a US campaign extolling the virtues of EVs; Australia shows what's possible in new homes when you add solar, batteries and smart tech; a start-up selling portable solar and battery systems that wants it to be as easy and common as wi-fi; and The Lines Company looks to put some solar on the roof of the Ōtorohanga Kiwi House.
Read moreDownloadWhen it comes to electric farming, "the numbers are becoming undeniable," says Nicholson Poultry's Jeff Collings. With 60kW of solar, a Nissan Leaf as a 'farm quad', electric mowers, an electric ute that can run a water blaster, and even a chicken manure scraper made out of a wrecked Tesla that, as Rewiring's Matt Newman says, looks a bit like something out of Mad Max, "almost everything is electric". There aren't many others in New Zealand who have gone this far down the electric road. And, with his electric Stark Varg, the fastest off-road motorbike in the world, he's obviously having plenty of fun on that road, too.
Read moreDownloadRNZ's Kate Newton reports on the "madness" of thousands of new piped gas connections being installed into houses every year, despite dwindling supplies and higher lifetime costs.
Casey said it was positive that the numbers showed people starting to leave the gas network of their own accord, but not all households were in a position to make that choice.
"If we don't plan for a decommissioning of the gas network, then it's going to be a chaotic transition, where vulnerable New Zealanders really suffer."
As the research of Rewiring and others has shown, gas is expensive, it's getting more expensive, it's terrible for your health when burned inside and there are substitutes available right now that, on average, do the same job for less money over the long run for households, would save the country billions on health costs and lost productivity, and don't pump out unnecessary emissions.
Around 300,000 homes and businesses have connections to the gas network (it’s estimated another 300,000 use more expensive bottled gas, mostly in the South Island). The number of active connections has started to decline recently and the country’s largest gas network, Vector, is forecasting no new residential or commercial connections after 2029.
Upfront capital costs are the main barrier for many homes, which is why we're working hard on a low-interest, long-term loan scheme that can be used to pay for electric upgrades, including hot water heat pumps. This would mean paying for a new thing with a loan would be cheaper than paying to run the old thing.
Read more about the scheme here.
Disconnection costs are also a major barrier. We have seen examples where households permanently disconnecting from the network have been charged between $1,000 and $2,000 to have a meter permanently removed (i.e. digging up the pipes to the road), even though it should only cost customers $200 to have the connection capped at the house.
RNZ even reported a case where a business customer was quoted $7,500 but took the case to Utilities Disputes, where complaints about disconnection costs have been rising.
The Australian Energy Regulator and the state of Victoria have now capped the disconnection fees to a few hundred dollars to stop this kind of behaviour and protect households.