Guide

Time-of-use and free-hour power plans explained

Some plans charge different rates at different times of day, and a few give you an hour free. They are genuinely cheaper for some households and quietly worse for others. The difference is whether you can move load.

Published 28 July 2026 by ComparePower. We say where every figure came from, and we leave a gap where we could not confirm one.

Most New Zealand power plans charge the same rate per unit whatever time it is. A growing number do not, and the pitch is straightforward: electricity genuinely costs more to supply at 6pm on a cold Tuesday than at 2am, so a plan that prices that difference can be cheaper for anyone able to shift their usage.

The catch is in the last four words.

The three shapes

Time of use. The day is split into bands — typically peak, off-peak and night — each with its own rate. The peak rate is higher than a flat plan's rate and the off-peak rate is lower. Your bill goes up or down depending on how much of your usage lands in each band.

A free window. Some retailers give an hour, or a block, at no charge. Usually you choose the hour from a set of off-peak options. The rest of the plan carries the cost.

Spot pricing. You pay close to the wholesale price, which is set every half hour and moves with demand, weather, lake levels and what the generators are doing. Most of the time it is below a fixed retail rate. Occasionally, during a genuine supply squeeze, it is far above it.

They sit on a spectrum from mildly time-shaped to fully exposed to the market, and the reward scales with the exposure.

Who these plans actually suit

They reward movable load. In a New Zealand house, the things that genuinely move are:

An EV. By far the biggest single lever, because charging overnight on an off-peak rate rather than plugging in at 6pm is the difference these plans are designed around.
Hot water. If it is on a controlled circuit it is already being shifted for you. If it is on a timer, you can shift it further.
Dishwashers, washing machines and dryers with a delay-start button.
A home battery, which turns almost any load into a movable one.

They punish load you cannot move: a household where everyone arrives home at six, cooks, showers and turns on the heating in the same two hours is buying its electricity in the most expensive window and getting the higher peak rate for the privilege.

The honest arithmetic

Before switching to one, work out roughly what share of your usage happens in the peak window. If you have a smart meter, your retailer can usually show you your usage by half hour. If more than about a third of your consumption is in the evening peak and you have nothing you can realistically move, a time-of-use plan is a bet against your own routine.

If you have an EV, the arithmetic is usually the other way round and it is not close.

Where we are on this

We are not showing plan rates yet, on any plan type, because we do not have verified rate files from the retailers and a modelled time-of-use price built on assumptions about your daily pattern would be a guess presented as a comparison. Once rate files land, plans that price by time of day need to be compared against your actual usage shape rather than a single average rate. That is a real modelling job and we would rather do it properly than approximately.

In the meantime, we compare 8 power companies and can show you which of them offer which plan types at your address, so you can ask them directly. The national average price as at May 2026 was 42.04c per kWh including GST, and that is the flat-rate benchmark any time-of-use plan has to beat over a full year, not just in the cheap hours.

Time-of-use and free-hour plans — common questions

What is a time-of-use power plan?

A plan where the price per kWh depends on when you use it, typically a higher peak rate in the morning and early evening, a lower rate through the day, and a cheaper overnight rate. It needs a meter that records when electricity was used, which in practice means a smart meter.

Are free power hour plans actually free?

The hour itself is, but the plan is not a gift. A retailer offering free power in an off-peak hour is buying a change in your behaviour. It costs them less to supply you at that hour, and shifting load off the peak is worth money to them. Whether you come out ahead depends on whether you actually move usage into the free window and on how the rest of the plan is priced.

Do I need a smart meter for a time-of-use plan?

Effectively yes. A plan that prices by time of day needs a meter that records usage in intervals and reports them. An older accumulation meter records a single running total and cannot support it. Most New Zealand properties already have a smart meter, and you do not usually pay for one directly.

What is a spot price plan?

A plan where you pay something close to the wholesale market price, which moves every half hour. It can be much cheaper than a fixed rate over a normal year and considerably more expensive during a supply squeeze. It suits households that can shift or cut usage on short notice and that could absorb an expensive month without difficulty.

Which households benefit most from time-of-use pricing?

Households with load they can move, such as an EV charged overnight, a dishwasher and washing machine that can run on a timer, hot water on a controlled or timed circuit, or a home battery. Households whose usage is concentrated in the evening peak because everyone gets home at six are the ones most likely to be worse off.

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