Reforming distributed generation pricing to promote efficient investment

This consultation is the next stage of our work to review and update the network pricing rules for solar and other forms of distributed generation and storage – big and small.

The proposals in this consultation paper aim to support growth in generation connecting to distribution networks and keeping costs as low as possible for everyone in the long run.

Following feedback to our 2025 issues paper and other targeted engagements, we are proposing changes to the pricing rules to address four key issues:

• 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 be rewarded for
  
• address situations where distributed generators pay more than others to connect 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.

We are also seeking feedback on possible areas to address in the next stage of distribution pricing reform.

We expect these proposals would unlock more capacity on networks for distributed generation and encourage more efficient use of the electricity it supplies.

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 the distributed generation from connecting altogether and stall future developments.

Overall, getting the pricing rules right leads to more efficient investment in distributed generation, more efficient use of networks and keeps costs as low as possible for New Zealanders in the long run.

On 10 April 2026, we extended the due dates for providing feedback. Submissions and other written feedback are due by 5pm, 19 May 2026. Feedback will be published on this webpage soon after, with cross-submissions due by 5pm, 3 June 2026.

Please email distribution.pricing@ea.govt.nz if you would like to discuss the proposals before making a submission.

We held a webinar on 2 April 2026 to talk through the proposals and answer questions. You can watch the webinar below, read the presentation slides or Q&As.

This work follows the new rule, we announced in July 2025, that requires lines companies to pay a rebate when households and certain business consumers inject electricity to networks at peak times. The new rule came into effect on 1 April 2026.