Designing homes to conserve energy and use it efficiently, from sources that cause least environmental harm.


The average New Zealand household uses just under 10,000 kWh of energy per year. Approximately 5,800–8,500 kWh of that is electricity (depending on location), with an average household using around 7,100 kWh. Over 7% of New Zealand’s energy-related greenhouse gas emissions come from households.

All energy consumption has environmental impacts, ranging from the production of greenhouse gases in burning fossil fuels to direct effects on landscapes from dams and other sources of generation.

Most of the total energy consumed in New Zealand still comes from non-renewable sources (fossil fuels), but the story is different for electricity – in recent years, over 80% of our electricity has been produced from renewable sources, reaching 87% for the year 2022. The single biggest source of electricity generation by far is hydro, with geothermal generation now in second position, overtaking natural gas.

In July 2019 the Ministry of Business, Innovation and Employment (MBIE) estimated that the proportion of electricity produced from renewable sources would rise to 95 percent by 2050. All remaining large coal-fired and baseload gas generation capacity would be retired by then as the stations reach the end of their economic lives. (In fact, renewables accounted for 94.7% of generation in the last quarter of 2022. Plenty of spring rainfall meant hydro dams produced more electricity than usual.)

Energy efficiency measures have also led to energy use in the average New Zealand household falling by 10% since 2000.

This figure comes from a study commissioned by the Equipment Energy Efficiency (E3) programme. There is evidence that people buying more energy efficient appliances explains a large part of the drop. There was a 26% improvement in the overall efficiency of heat pumps sold in New Zealand between 2004 and 2014, for example.

In July 2019, MBIE said that in the residential sector, the amount of electricity used per capita is continuing to decline. Since 2009 it has fallen by 15 percent, which is faster than other advanced OECD countries. MBIE forecasts the downward trend to continue at around 0.8 per cent per annum until 2030. (COVID-19 restrictions in 2020 meant more people stayed home, using more electricity during the day. Residential electricity consumption in 2020 was 2.5% higher than 2019 and higher than the 2015–2019 average.)

There are still many opportunities for making our energy use even more sustainable, however.

Sustainable energy use means designing homes to conserve energy, obtaining energy from sources that do the least possible long-term environmental harm and, where energy is used, to use it efficiently. (Find out more about embodied energy.) Energy efficiency will also reduce long-term energy bills for home occupiers.

Energy-efficient design may incorporate small-scale on-site energy production to meet demand.

In its 2018 Statement of Intent, EECA estimated that more than $470 million could be saved each year by improving the quality and energy efficiency of New Zealand’s housing stock. “While the residential sector only accounts for 6% of New Zealand’s total energy-related emissions…households have a significant impact on our peak electricity use when electricity tends to be at its least renewable and most expensive to produce (for example, winter evenings).”

In July 2019, ECCA published the findings of new research: “Widespread investment in electricity efficiency measures such as LED lighting, heat pumps and electric motors could deliver thousands more GWh of extra renewable electricity capacity at a lower price than investment in new renewable generation alone.”

Engineering New Zealand, in its report Engineering a Better New Zealand: Cleaner Energy, suggests that sometime in the future a smart grid could help provide a solution. A smart grid would automatically turn on smart appliances when supply is plentiful, “…rather than all the dishwashers in New Zealand running every evening.”

“Virtual power plants could help by aggregating small-scale generation … including domestic electric vehicles or solar panels and feeding it back into the grid. For example, to cover a sudden generation need, a virtual power plant could tell your fridge freezer to take a brief break and your electric vehicle battery to join with thousands of others in feeding energy back into the grid.

Virtual power plants overcome the fact that our distribution network was designed to supply power from the transmission network to homes, not the other way around.”

These “distributed energy resources” (DER) could bring/ New Zealand, building energy resilience and reducing carbon emissions. There are also large economic benefits possible. A 2021 cost-benefit analysis for the Electricity Authority estimated that the uptake of DER could be worth around $6.9 billion for New Zealand.


Updated: 12 June 2023