Kiwis Face Energy Hardship as Power Costs Surge

One in five struggle to pay bills; expert offers savings strategies.

Many New Zealanders are struggling with rising electricity costs, forcing some to make tough choices. A recent survey indicates that 20% of Kiwis are finding it hard to pay their power bills, while 11% are cutting back on heating to save money.

Mounting Energy Costs

Electricity prices in New Zealand have jumped nearly 9% in the past year, according to Stats NZ. The increasing cost of power has led some people to adopt drastic measures to reduce their energy consumption.

Some residents have reported going to bed as early as 5 p.m. to conserve heating costs, while others are turning off their hot water cylinders or resorting to cold showers.

Expert Advice on Cutting Costs

However, **Paul Fuge**, Powerswitch manager at Consumer NZ, suggests that people can achieve considerable savings on their energy bills by reducing their overall energy use. “Typically, we would say [you can save] around 20%, if you’re really disciplined,” **Fuge** told Checkpoint.

According to a 2023 report from the Ministry of Business, Innovation and Employment, households in New Zealand spend an average of $2,200 annually on electricity, highlighting the financial strain caused by rising energy costs. (MBIE 2023)

The Impact of Energy Hardship

**Fuge** noted that the significant increase in energy prices has led to more individuals experiencing energy hardship and struggling to afford their power bills. “One in five have experienced financial difficulty in paying their power bill over the last year, and around the same number basically missed a payment because of that. That results in late fees, so the issue compounds.”

Major Energy Consumption Areas

Hot water is the biggest household energy consumer, accounting for approximately 30% of the average home’s electricity bill. Refrigeration follows at 17%, with space heating at 15%, according to **Fuge**.

“Those are the biggest things that use energy and offer the biggest potential to save money,” **Fuge** explained.

Time-of-Use Plans

One effective strategy, according to **Fuge**, is to adopt a time-of-use plan, which allows consumers to take advantage of lower energy prices during off-peak hours. The price of electricity fluctuates throughout the day, with higher costs during peak demand times, such as early morning and evening.

At times when demand is lower, such as in the middle of the night, electricity prices decrease. Retailers leverage these fluctuations to offer savings through time-of-use plans.

This approach involves setting timers for hot water cylinders to heat water during off-peak times, potentially halving the electricity cost. However, not all hot water cylinders are compatible with timer systems.

Appliance Efficiency

**Fuge** emphasized the importance of appliance age and efficiency, noting that modern appliances, especially refrigerators and hot water cylinders, are significantly more energy-efficient than older models.

Caution Against Extreme Measures

While some might consider turning off their hot water cylinder entirely to save money, **Fuge** strongly advises against this practice due to the risk of bacterial growth. “We would not recommend doing that at all, because you can get diseases in the hot water cylinder, when the water’s not hot enough, particularly legionnaires’ disease, which sort of thrives in those warm stagnant water temperatures.”

Another energy drain is the ‘beer fridge.’ Old, inefficient refrigerators, often relegated to garages or sheds, consume excessive electricity. “Modern fridges are way more efficient than the old fridges and that’s a real saving…We stick that old fridge at the bach or out in the shed…it’s a perfect storm of badness in terms of electricity consumption.”

Time-of-Use Plan Considerations

While time-of-use plans can offer substantial savings, **Fuge** cautions that they require discipline and may not be suitable for all households. “If you can use those high-consumption appliances away from peak times and move them into cheaper times, there’s some potential savings there, but I would caution that it requires discipline and it doesn’t suit all households.”