Power company joining credits in NZ: when a sign-up deal beats a lower rate

Open any power company’s website in New Zealand and the first thing you see is usually a number with a dollar sign: a credit for joining, a month of free power, a bundle discount. These offers are real money. They are also the part of the deal the retailer most wants you to look at, which is a good reason to look at everything else first.

How joining credits actually work

A joining credit is a one-off amount taken off your power bill after you sign up. Some retailers apply it in one go on the first bill or two. Others spread it out: Contact’s broadband offer, under terms dated 12 January 2026, paid a $25 energy credit each month for twelve months, $300 in total, when an electricity customer added broadband on the same account.

In exchange, you usually accept conditions. The most common ones:

• A fixed term. On 9 October 2026 Mercury was advertising a $300 electricity credit for joining on a one-year term, with “terms, eligibility and early termination fees” applying.
• A break fee. Mercury’s two-year fixed price plan terms set an early termination fee of $150 including GST if you leave before the term ends.
• Staying on every part of a bundle. Under Contact’s terms, if you cancel either the electricity or the broadband during the twelve months, the remaining credits stop and nothing is refunded.
• Eligibility limits. Contact’s terms, for example, exclude prepay customers, allow one offer per electricity connection, rule out combining it with other deals, and exclude anyone who took a similar special offer in the previous six months.

A credit sits on your power account. It only helps if you stay long enough to use it.

Why comparison tools leave credits out

Powerswitch, run by Consumer NZ, deliberately excludes one-off joining credits and incentives such as free appliances from its cost estimates. Its reason is simple: most people stay with a retailer for more than a year, so the ongoing rates matter more than a one-off sweetener.

That is a good discipline to copy. Consumer NZ’s June 2026 research found retailers tend to save their best pricing for new customers, and warned that free appliance promotions can be offset by higher than average power prices over the fixed term. A credit does not make a plan cheap. It makes the first few months cheaper.

Some comparison sites do show credits. Power Compare, a commercial site and a Switchly partner, lists current joining credits and bundle offers next to plans. That is useful for spotting a deal, as long as you run the rates first.

Does the credit beat a lower unit rate? A quick sum

You do not need a spreadsheet. Two rules of thumb cover most cases, using a home that uses 8,000 kWh a year as the example:

• Every 1 cent per kWh difference in the unit rate is worth $80 a year (8,000 × $0.01).
• Every 10 cents a day difference in the daily charge is worth $36.50 a year (365 × $0.10).

Now take a $300 credit on a plan whose unit rate is 4 cents per kWh dearer than the cheapest plan at your address. Over a year that is $320 extra, and the credit is gone before the term ends. In year two, with no credit, you are simply paying more. If the same credit comes on a plan that is only half a cent dearer, it wins comfortably.

Use your own usage rather than 8,000 kWh. A small flat in Wellington and a family home in Invercargill get very different answers from the same offer. Your bill shows the kWh; our bill guide shows where.

The fine print worth reading

Can prices change during the term? Mercury’s one-year offer page said on 9 October 2026 that “prices may change during the term”. A term does not always mean a fixed price. Mercury’s two-year fixed price terms, for their part, say the fixed price does not cover GST or Mercury’s service fees.

When is the credit applied? Mercury’s two-year terms say a bonus credit is applied within 55 days of accepting the offer. Make a note and check your bill.

Is there a way out? The same terms let you cancel without the fee within 10 days of the confirmation letter, and set out cases where the fee does not apply, such as when the plan cannot move with you to a new address. Look for these clauses before you sign, not after.

What does it roll onto? Consumer NZ says that if a retailer extends your fixed term without your consent, you should not have to pay a fee to leave, and that charging one risks breaching the Fair Trading Act. Still, put the end date in your calendar. Our free contract alert does that for you.

Is there a bond? A retailer can ask for one. Consumer NZ says bonds must be reasonable under the Electricity Authority’s Consumer Care Obligations and should be refunded after 12 months of paying on time. You do not have to use a retailer that asks for one.

Is a discount conditional? In 2019 the Commerce Commission warned Slingshot that advertising a 10% discount for bundling broadband and power was likely to mislead, because customers only got it if they also paid on time and that condition appeared late in sign-up. Read the conditions before the last screen.

Bundles and freebies

Three in ten energy customers are on a bundle, according to Consumer NZ. A bundle credit can be generous, but it ties two or three services together. Consumer NZ notes that with a bundle you usually cannot cancel only the electricity; you cancel the whole plan. Price the power on its own, add what you would pay for broadband elsewhere, and only then subtract the credit.

Signed up by phone or at the door?

If the deal came from an uninvited phone call or door knock, you have five working days after receiving a copy of the agreement to cancel. If you signed up online after comparing, that rule does not apply, so read the terms before you confirm.

A short routine

1. Find your annual kWh and current rates.
2. Rank plans by rates on our compare page, with Billy or with Powerswitch.
3. Only then look at credits, and do the quick sum above.
4. Read the break fee, price change and credit timing clauses.
5. Set an alert for the end of the term, then compare again.

If you are unsure what drives your usage, the appliance calculator shows where the kWh go. Our guide to comparing power plans covers low user plans, prompt payment discounts and the comparison tools in more detail.