Beyond the bills: Why many households still face energy hardship
Research shows that many households in New Zealand still struggle to afford the energy they need for a warm and healthy home.
Energy affordability remains a concern in New Zealand, especially for lower-income households, which can struggle to afford the energy that they need for a warm and healthy home. However, the energy hardship those households are facing today encompasses more than just the bills.
What is energy hardship?
The Ministry of Business, Innovation and Employment (MBIE) defines energy hardship as not being able to afford adequate energy services to support well-being at home. To track this, MBIE used five lived-experience indicators to measure the energy hardship of households. These indicators included, for example, inability to pay the bills on time, inability to keep the home warm, and having to put up with feeling cold to save money.
Who is more affected?
MBIE also notes that energy affordability depends not only on energy prices and income, but also on housing quality and how efficiently the home converts energy into warmth. This means that households with low incomes, poor housing conditions, or inefficient heating systems are more likely to experience energy hardship.
Renters are also more likely to experience energy hardship than owner-occupiers. Māori and Pacific Peoples households also experience higher rates of hardship across several indicators. These results reflect the longstanding structural issues in housing and income, rather than shorter-term changes in energy prices alone. ‑occupiers. Māori and Pacific‑standing structural issues in housing and income, rather than
What the latest report shows
MBIE’s report on energy hardship measures uses data to June 2024, providing insights into how New Zealanders are experiencing energy hardship. The purpose of those measures is to help track energy hardship over time, and to monitor the effectiveness of policies and programmes.
The data in the report shows mixed results compared to 2022. The report compares households’ experiences across the five different indicators of energy hardship over time.
Compared to 2022, these energy hardship-related measures have worsened while some housing conditions and heating-related measures have improved. Households experiencing material hardship remain more likely to face energy hardship. Renters also continue to face higher risks than owner-occupiers, although some measures for renters have improved.
With approximately two million households in New Zealand in 2024, these figures indicate that around:
120,000 households could not pay their utility bills on time
130,000 households could not afford to keep their dwelling adequately warm
125,000 households had to put up with feeling cold to keep costs down
74,000 households experienced dampness or mould as a major problem
100,000 households had trouble heating their accommodation.
Together, the numbers suggest that energy hardship remains a significant challenge for many households in New Zealand.
The policy gaps and trade-offs
New Zealand is making progress on cleaner energy but affording that energy remains a pressure for many householders.
Recent research from the New Zealand Green Building Council suggests that the inadequate condition of some of New Zealand’s existing housing stock has a negative impact on energy affordability measures. Poorly insulated homes need more energy to maintain basic warmth, limiting the effectiveness of short-term affordability measures.
Energy subsidies can reduce power bills in the short term, but they do not fix cold or damp homes. Minimum housing standards can improve housing quality, but they may also increase costs for landlords, which can then be passed on to renters through higher rents. Energy efficiency upgrades deliver long-term benefits, but they often require high upfront investment.
These policy trade-offs show that addressing energy hardship requires a move away from piecemeal measures and towards a systemwide approach that treats energy, housing, and income as closely connected. Without this shift, New Zealand risks continuing to leave many households in energy hardship.