Household electricity price outlook - NZIER Insight 135

 Electricity prices are a significant and growing driver of the cost of living for New Zealand households.  In this Insight, we examine the drivers of electricity price increases, policies to promote competitive pricing, and the near-term outlook. Electricity prices rose 11% in the year to March 2026, but increases are expected to moderate. Rising network costs will be the main driver, while generation costs have stabilised. Longer term, avoiding further sharp increases will depend on cost-effective solutions to managing prolonged dry periods and expanding network capacity to meet growing demand. 

NZIER Insights are short notes designed to stimulate discussion on topical issues or to illustrate frameworks available for analysing economic problems. They are produced by NZIER as part of its self-funded Public Good Programme. The purpose of NZIER’s Public Good Programme is to inform debate and educate on important economic and policy issues facing Aotearoa New Zealand. More information on NZIER’s Public Good Programme can be found at https://www.nzier.org.nz/public-good.