An energy efficiency expert is urging the Government to prioritise hot water heat pumps as one immediate and cost-effective response to New Zealand’s energy crisis, backing views in a new report that importing LNG would increase energy prices and expose the country to volatile international markets.
A New Zealand Green Building Council report warns that importing liquefied natural gas (LNG) would require significant taxpayer subsidies and likely place sustained upward pressure on gas and electricity prices. International experience – including in eastern Australia – shows that linking domestic supply to global gas markets can dramatically increase generation costs, accelerating industrial decline and job losses.
(ref. https://nzgbc.org.nz/news-and-media/lng-imports-would-lock-kiwis-into-higher-energy-bills-for-decades-when-more-secure-options-are-ready-now )
New Zealand doesn’t need to take that risk, says Ecobulb Managing Director Dr Chris Mardon.
“Before we spend hundreds of millions subsidising imported gas, we could fix the biggest, most remedial source of household energy waste – hot water,” says Mardon. “Hot water heat pumps are proven technology that can slash electricity use by up to 70 percent compared to traditional electric cylinders, and completely remove the need for gas water heating.”
Hot water typically accounts for around a third of household energy consumption. Replacing ageing electric or gas water heaters with high-efficiency heat pump systems delivers permanent demand reduction – lowering peak loads and easing pressure on the national grid.
According to the NZGBC’s analysis, widespread adoption of efficient electric technologies, including hot water heat pumps and rooftop solar, could offset a significant portion of the energy shortfall that LNG imports are intended to address – without exposing New Zealand to global fuel price volatility.
“If all new homes built had rooftop solar and all new residential hot water systems sold were heat pumps, by 2030 more electricity would be being generated and saved than the LNG terminal would provide,” Mardon said. “That’s energy we don’t have to generate, import, or subsidise.”
Unlike LNG infrastructure, which creates a centralised point of failure and ties prices to international markets, hot water heat pumps are distributed assets installed in thousands of homes across the country.
“Distributed efficiency is inherently more resilient,” Mardon said. “Every home that upgrades, reduces national demand. That lowers wholesale price pressure and protects households from future energy shocks.”
The report also highlights that LNG imports would likely increase the marginal cost of electricity generation, pushing up power prices even in normal years. Higher energy input costs would further strain manufacturers and gas-intensive industries.
Mardon says improving hot water efficiency is a direct way to reduce both household living costs and system-wide demand.
“Energy we don’t use is the cheapest energy of all. A hot water heat pump delivers guaranteed, ongoing savings for families – year after year – without requiring permanent government subsidies.”
The NZGBC report estimates that LNG imports would depend on substantial annual taxpayer support.
Ecobulb is calling for those funds to instead be redirected into targeted grants or financing support for hot water heat pump installations, particularly for low- and middle-income households. The NZGBC report says that rooftop solar should also be supported.
“Instead of subsidising imported fuel, we could invest in permanent bill reductions for Kiwi families,” said Mardon. “That strengthens energy security, supports local installation jobs, and reduces long-term system costs.”
Mardon says the pathway forward is clear.
“Hot water heat pumps are available now. They’re efficient, scalable, and already proven in thousands of New Zealand homes. If we’re serious about reducing energy costs and protecting our economy, accelerating the transition to hot water heat pumps is one of the smartest steps we can take.”
About Ecobulb
Ecobulb is a New Zealand-owned energy efficiency company specialising in lighting and high-performance hot water heat pump systems for residential and commercial applications, helping households reduce energy use, cut power bills, and transition away from fossil fuels.
