Is wholesale power cheaper?
Most half-hours of the year, yes, and by a margin that matters. On the worst evenings of the year, no, and not by a small amount either. Whether it works out cheaper for you comes down to three things: how much you use, when you use it, and whether you can store it. This page answers that properly rather than selling you the average.
The short answer
Yes on average. No at the peaks. And an average is not what you pay - you pay the price at the moment you switch something on.
So the real question is not whether wholesale is cheaper than a fixed rate. Over a year it usually is. The question is whether your consumption sits in the cheap half-hours or the dear ones, and whether you can move it if it does not.
Why a fixed rate costs more than wholesale on average
Every retailer in New Zealand buys electricity from the same wholesale market, at a price that resets every 30 minutes.
A conventional retailer buys at that price, sells you a fixed rate, and keeps the spread. The spread is not all profit. A large part of it pays for hedging - the cost of guaranteeing your price no matter what the market does that winter. That guarantee is worth something real, and you pay for it every month whether you needed it or not.
Wholesale pricing is what is left when you stop paying for the guarantee and carry the risk yourself. That is the entire trade, and it is worth understanding before you make it.
PowerHub passes the wholesale price through and charges a flat service fee of 2.3 cents per kWh on top of it. Our margin does not move when the market does, which means we have nothing to gain from a price spike.
When wholesale is cheaper
Most of the time, and by more than people expect.
Overnight and through the middle of the day, the market price is often a fraction of a standard retail rate. A household that uses a lot of power in those windows - charging an EV overnight, a pool pump on a timer, hot water heating off-peak - captures that difference directly rather than handing it to a retailer as a hedge premium.
Under normal market conditions, using our published stress-test model: a household on 900 kWh a month pays about $150 a month for energy plus the service fee, including GST. Add a battery that shifts consumption out of the peaks and it is about $102. At 2,000 kWh a month the same figures are $334 and $260. Network, metering and levy charges sit on top of those and do not change between retailers.
When wholesale is not cheaper
Wholesale prices are set every 30 minutes and spikes are not capped. Two situations turn the trade against you.
A short, violent spike. A sudden loss of generation or transmission on a high-demand evening can put the market at $10 a kilowatt-hour for hours. It is brief, it is brutal, and it is uncapped.
A sustained high-price market. A dry hydro year, a gas outage, a cold still winter - conditions that hold prices at 40 cents a kilowatt-hour for months rather than hours. This is the scenario that actually hurts, because there is no cheap half-hour to hide in. In our model, sustained $400/MWh takes that same 900 kWh household from about $150 a month to about $368.
We publish the full stress test rather than the average, because a wholesale product sold without a worst case on the page is not honestly sold.
All figures on this page include GST.
So is it cheaper for you?
Three things have to be true, and if any one of them is not, the answer is no.
You use enough. Membership is a one-off fee for a fixed term. Below about $300 a month of electricity spend you will not recover it, and we would rather tell you that now than after you have paid.
You can shift consumption, or store it. The saving comes from buying in the cheap half-hours, not from the average being lower. A battery subscription starts paying for itself from about $450 a month of spend, because that is where shifting consumption earns more than the subscription costs.
You can absorb a bill that varies. Ask yourself whether you could take a bad month - the sustained-high-price figure for your usage - without it causing real difficulty. If the honest answer is no, this is the wrong product for you.
And one thing we will say plainly: taking wholesale pricing without a battery means you are fully exposed to the spot market. That is not a position we recommend to anyone.
How to find out for certain
You cannot answer this from an average, and you should not take our word for it either.
The only honest answer comes from your own half-hourly usage priced against what the market actually did. Send us a recent power bill and we will do exactly that, free, in a couple of days, with no obligation. If it does not stack up, we will tell you.
Powerswitch, run by Consumer NZ, and Billy, run by the Electricity Authority, are both free and both independent. For a lot of households one of their answers will be better than ours, and that is fine.
Two ways to pay - the cup and the saucer. A flat rate means paying for the padding that keeps your price the same every month.
Why the bill shrinks - two real bills side by side: $934.52 on the old plan, $697.84 on PowerHub, for the same house and the same power in the same month. These are past months, not a forecast. Wholesale prices move - see what a bad month actually looks like.
See what this would cost you
These are our published numbers. What matters is what they do to your bill.
Send us a recent power bill and we will price that same usage against the actual half-hourly market, so you see the difference on your own consumption rather than an average. It is free, it takes a couple of days, and it commits you to nothing.
If it stacks up, choosing your term and seeing your first invoice is the step after that.