The Blog

The grim reality of energy poverty in New Zealand

“Over the past decade, electricity prices have soared by 42%.”

Kelly McLeod and her family suffer from energy poverty. In the worst of winter, the Wellington family of four paid $25.20 for a single day to heat and power their 170 square metre home in Miramar. In July, they paid $501 for power in just a single month - about a quarter of their monthly income.

Signed up to one of the major retail power companies, Kelly and her husband, Hamish, a builder, have done many things to try to cut their energy bill. Kelly installed thermal curtains, gets her family to wear more clothes in winter rather than turning on the heating, and only uses the clothes drier in absolute emergencies.

“We’re lucky to have our own home as many families don’t, but I don’t know what more we can do. I always make sure the kids bedrooms are warm, and for that, I guess we are lucky, but I know many families who can’t afford even that,” says Kelly, who does voluntary work with low-income families in Wellington’s Strathmore.

The McLeod family Wellington

She’s not alone. Energy poverty is a reality for at least a fifth of New Zealanders, according to an Otago University study which found that 20 per cent of New Zealanders report they have gone without heating or power because they are unable to afford it. Energy poverty is where a household needs to spend 10% or more of its income on fuel to keep the house temperature at a healthy level - 18 degrees in the living areas, and 21 degrees in bedrooms.

Over the past decade, electricity prices have soared by 42% - a grim statistic that prompted Steve O’Connor and a handful of other concerned citizens to set up Flick four years ago. Through Flick’s disruptive retail model, customers can save about 20 per cent on their energy bill over time. Flicksters are also encouraged to save money by using energy at cheaper times of day which they can see in the smart tools Flick equips them with.

Says Mr O’Connor: “Stories about energy poverty motivated us to find a better way to sell electricity back in 2013, and motivates our team every day to build a better type of business - one that is guided by creating value for our customers, especially the people in our community who are the most vulnerable.” “At Flick, we believe that innovation isn’t truly disruptive until it reaches the people that need it the most. The idea that there will be a ‘trickle down’ effect is a myth – we need to work actively to democratise technology.”

Along with showing customers ways they can actively save money off their power bills by using energy at a time when it’s cheapest, Flick is also driving awareness of energy poverty. Flick is giving away more than 5000 LED energy-efficient lightbulbs to the most vulnerable families, an initiative that will help a few hundred households. Replacing standard bulbs with LEDs will slash 80% off a household’s lighting costs - for an average household, this is worth over $400 of savings every year. Says Mr O’Connor: “They’re expensive to buy – that’s why we’re fitting out a few hundred homes that really need to bring down their power costs.”

Flick has not yet made a profit. But it is a company with a social consciousness, that among many initiatives pays staff at least the living wage. “Housing related disease and death is unacceptable in a developed country like ours. For every family we help, there are another 10 who need it.” “We don’t want this critical health and wellbeing issue to drop out of the national consciousness. We want to challenge every organisation in the system to recognise and act on their responsibility. And we want to be part of ensuring all New Zealand households can prosper. We need systemic change which means we need everyone in the system to recognise the issue and think about what they can do.”

Otago University public health professor Phillipa Howden-Chapman says that many families live in cold, damp homes, which is impacting on their health. With New Zealand’s variable temperatures - snow down south in November - she says its not only a problem in winter months. Director of the Housing and Health Research Programme, she says: “There are 41,000 children hospitalised each year for medical conditions that we clearly now know are related to housing hazards like damp, cold, mould and crowding. It’s just not good enough.” According to University of Otago research, energy poverty is thought to be a factor in New Zealand’s high rate of excess winter mortality (an additional 1,600 deaths a year) and excess winter hospitalisations (8% of all hospitalisations).