What is a smart home

A smart home isn’t the house itself, but a clever system that links residential appliances together into a network and enables communication with the national electricity grid. The smart home system operates the appliances within the house to use electricity as efficiently as possible, without changing the way you use your technology. 


In a smart home, electrical appliances can connect to a home energy management system (HEMS) and a flexibility service supplier to seamlessly optimise your electricity use on your behalf, according to your household needs. For this to work, your appliances would either have ‘smart’ technology built into them, or be plugged in to a ‘smart’ plug.

While the optimisation will work automatically to reduce unnecessary electricity use during peak times, the household still has ultimate control over which appliances can have their energy use dialled down and when. Consumers can also pause the function altogether if they feel the need to.

This approach to home electricity use could reduce costs for households, take pressure off the national electricity grid, and help reduce New Zealand’s carbon footprint.

Download Smart Homes Infographic [PDF 1.2 MB]

Elements of a smart home


The home – Any home can be smart. The set-up largely focuses on technology, rather than the building.

Appliances – Smart appliances are set up to run in the most efficient way possible, and reduce unnecessary power use, especially at ‘peak’ times. Examples of appliances that can have smart capability include washing machines and dryers, heat pumps, hot water cylinders, electric vehicle chargers, solar PV systems, home battery units, and lighting systems.

Home Energy Management System (HEMS) – Sometimes a smart home is controlled by a ‘hub’ platform that enables centralised control of the network of smart appliances in your home. This is set up by an electrician – and can be added to a household at any time.

Flexibility service supplier – A service provider that manages the flexibility of electrical energy consumption or generation on behalf of a customer. 

National Grid – The grid is the nationwide system of electric power transmission in New Zealand. Your electricity provider is the company that supplies electricity from the grid to your home.


For New Zealanders

Save money – Bills can be significantly lowered by running your appliances more efficiently and shifting your energy use to periods of least cost electricity.

Set and forget – Appliances will have the capability to ‘learn’ when you use them. This enables them to save energy when you aren't using them. Once your appliances are all set up to run with their smart functionality – you can set and forget them.

Do your bit – You can reduce your household costs and environmental impact at the same time.

Extending the life of appliances – Appliances and other electrical devices always last longer if they are used more efficiently and less often.

For the planet

Renewable energy first – When lots of people use electricity in their homes at the same time (peak demand), electricity becomes more expensive and can require generation from fossil fuels. Shifting demand to off-peak periods prioritises the use of renewable energy sources.

Minimises electricity generation – Smart technology avoids wasting electricity and minimises unnecessary energy generation.

Reduced infrastructure costs – Managing demand on the electricity grid reduces the need for expensive new electricity generation infrastructure.

Electrifying New Zealand – Better managing electricity demand helps enable a move away from fossil fuels towards electrification, such as the increased use of electric vehicles.

Smart home vs smart device

Smart home systems

  • Device or system can communicate with a flexibility service provider.
  • Can use a home energy management system or hub.
  • Optimises energy use in the home.
  • Reduces demand at peak times.

Devices that aren’t that ‘Smart’

  • Controlled remotely via app or phone.
  • Can’t communicate with a flexibility service provider.
  • Only work with specific apps for that product.
  • Don’t reduce demand at peak times.

How much you can save

Your exact savings depend on a few things:

  • How many smart devices you have in your home, whether they are ‘plug and play’ devices that have inbuilt smart capabilities, or if they are retrofitted using a smart plug or smart thermostat.
  • How much power the devices use in different power modes.
  • Whether you have a home energy management system.
  • How competitive your flexibility supplier is, and the demand constraints that are unique to where you live.
  • Your behaviour – you can always choose to override your smart home system, which gives you the freedom to always use your appliances the way you want. However, overriding automation also impacts the ability of a smart home to optimise your energy use, and therefore reduce household costs.

Why you should care

Energy use in New Zealand is changing for the better. We’re shifting away from fossil fuels in favour of renewable energy, which will reduce our carbon emissions and impact on the climate.

As a result, we’re becoming more dependent on electricity. We’re seeing growing uptake of electric vehicles , and many of our industries are decarbonising their processes with electric alternatives.

It's estimated that only around 40% of our household power bills are based on how much electricity you use. The remaining 60% is associated with ‘delivering’ electricity to the home, a cost that will increase for all kiwi homes with large grid infrastructure. These costs can be minimised by limiting pressure on the grid. To do this, we all need to change the way we use energy in our homes.

Getting started with Smart Homes