Energy companies required to give cheaper off-peak rates, better solar returns

Wednesday, 16 July 2025

Cheaper off-peak rates and better returns for solar power generators are now a requirement for major energy companies after a low-energy winter last year.

The Government has cemented recommendations by its Energy Competition Task Force to give customers cheaper off-peak energy use options and solar energy producers better rates for privately-generated power.

On Wednesday, Environment Minister Simon Watts and Associate Energy Minister Shane Jones announced new rules for the country’s major electricity producers, targeting two recommendations from earlier this year: time of use plans for energy users and better compensation for solar power users.

The announcement came after an open letter from business and consumer groups was published in Sunday newspapers saying the energy sector had failed to serve regular New Zealanders and businesses.

The announcement is part of the Government’s energy sector review.

Signatories included the Auckland Business Chamber, headed by former National Party leader Simon Bridges, Consumer NZ, the Major Electricity Users Group and the Employers and Manufacturers Association.

Large energy companies would now need to offer time of use (TOU) plans for their customers before June 30, 2026. According to the Energy Authority, that meant customers getting cheaper or even free power during off-peak times.

TOU plans were first recommended in February by the Government’s Energy Competition Task Force, a joint project by the Electricity Authority and Commerce Commission set up during the wholesale price spike last winter.

Contact Energy chief retail officer Carolyn Luey says the company’s time of use plans have been taken up by more than 145,000 households.

Contact Energy was already providing TOU plans for its customers since 2021 and supported the move to bring cheaper electricity to the market.

Chief retail officer Carolyn Luey said more than 145,000 households had taken up the option at Contact which gave customers free power during off peak times, between 9pm and midnight on weekdays, or from 9am to 5pm on weekends.

“By using electricity during off-peak hours, customers help reduce pressure on the national grid, especially during peak demand periods,” Luey said.

Genesis Energy currently provided free hours of power called Power Shout hours and different rates for day and night time energy use.

Environment Minister Simon Watts says the new energy sector rules will encourage solar uptake and encourage off-peak power use.

Chief revenue officer Stephen England-Hall said customers on its EV plan got 50% off all electricity between 9pm and 7am.

Meridian chief customer officer Lisa Hannifin told The Post in a statement that it supported changes to make electricity more affordable for customers but did not comment on TOU plans, which weren’t currently in place.

“We support changes that make electricity more affordable for customers,“ Hannifin said. ”We already have a strong focus on rewarding customers for being active in the energy market, whether that's reducing peak period use or having home solar, but it will be great to have more choices for consumers across the market.“

Mercury chief operating officer for customer relations Craig Neustroski says the announcement would support Aotearoa’s energy transition.

Mercury chief operating officer for customer relations Craig Neustroski said listed provider had begun its phased roll out of TOU.

Neutroski said it would incentivise customers to use power during off-peak times, which would reduce peak pressure on the grid.

He said the Government’s shakeup supported Aotearoa “move through the energy transition”.

Genesis chief revenue officer Stephen England-Hall.

“It helps us get the most out of the existing electricity assets and sends the right price signals to customers considering investment in technologies, like solar and batteries. Ultimately that keeps costs lower for everyone.”

The announcement was part of the Government’s current electricity sector review focusing on addressing energy shortages and price surges that have hit Aotearoa in recent months.

“For this to happen, the electricity sector must appropriately reward consumers for the benefits they provide when they shift their power use away from peak times,” Watts said.

Jones said TOU plans would impact customers as the energy sector evolved by enabling peak morning and evening demand to be met with local supply.

Solar power would also get “a boost”, Watts said as energy companies would now need to pay households with rooftop solar and battery “a fair price” for exporting electricity to the grid at peak times.

Genesis’ England-Hall said residential customers with home generation solar equipment could get a 12.5 cents per kWh return on solar export through its HomeGen scheme.

He said the company had 30,000 rooftop solar customers exporting around 79 GWh into the power grid per year.

“By 2028, it’s estimated the volume exported will grow to around 110 GWh, enough to supply more than 15,700 households,” England-Hall said.

“With scale, it’s easy to see how home solar and batteries could evolve into local microgrids, keeping communities powered during natural disasters and outages.”

The Task Force would focus on giving market access to new energy generators and independent retailers and “fairly compete in the market as well as providing more options for consumers”.