Have your say: next stage of distributed generation pricing reform

The Electricity Authority Te Mana Hiko is inviting feedback on proposals to update the network pricing rules for rooftop solar, batteries, solar and wind farms and other distributed generation.

This consultation is part of our multi-stage work to improve the pricing rules so distributed generation (and batteries) connect where it delivers the most value to New Zealanders and supports more efficient use and management of networks.

This work supports growth in generation connecting to distribution networks and keeping costs as low as possible for everyone in the long run.

This consultation paper focuses on updating the ‘Distributed generation pricing principles’. The pricing principles set out how lines companies recover costs from people who supply electricity to their local network – and reward them when their electricity supply brings benefits.

This consultation follows our earlier issues paper and other targeted engagements and proposes four key changes to the pricing principles to address key issues.

These proposals would:

• address the under-allocation of some costs created by distributed generators that are paid by everyone else on the network
  
• clarify the types of costs lines companies can allocate to distributed generators, and the benefits they should reward them for
  
• address situations where some distributed generators pay more than others if their connection triggers the need to extend the network ,which can be a barrier to new generation wanting to connect
  
• ensure pricing does not favour a lines company’s own distributed generation.

Overall, these proposals would unlock more capacity on distribution networks for distributed generation. Also, more cost-reflective pricing encourages more efficient use of distributed generation.

It also helps new distributed generation to be built in places where it brings the greatest benefit. This is important, because under the current rules, once capacity on the network is used up, the next generator to connect has to pay the full costs of the network upgrade. These high costs can deter that distributed generation from connecting altogether and stall future developments.

In turn, this helps strengthen the electricity system, boost resilience in communities and keep costs as low as possible for everyone in the long run.

We are also seeking feedback on potential areas to address for the next stage of our work.

Have your say

We invite all feedback on these proposals and potential areas for further reform.

Industry participants and owners of large distributed generation are encouraged to read the consultation paper and complete the written submission form.

All others, including owners of smaller-scale solar, are welcome to review this paper, but may prefer our easy-to-read guide that gives an overview of the main proposals and email us their views instead:

Proposed changes to the network pricing rules: a guide for solar owners and others supplying power to networks

All feedback must be sent to distribution.pricing@ea.govt.nz by 5pm, 15 May 2026. Cross-submissions will be due by 5pm, 29 May 2026.

Recent changes to distribution pricing already underway

From 1 April 2026, lines companies are required to pay a rebate when households and small businesses who meet the criteria supply electricity into networks at peak times.

The rebate provides a reward for the cost savings these small-scale distributed generators create for lines companies by supplying electricity at peak times.

This was the first step in our staged approach to ensure the pricing rules maximise the benefits of distributed generation so New Zealanders benefit.

Rewarding larger-scale distributed generation is more complex. We consider how larger-scale distributed generation should be rewarded for the value it brings to networks in Box 5.1 of the consultation paper and in the guide to proposed changes.