New Zealand Is Running Out of Natural Gas. Here Is What That Means for Your Home.
No ban. No deadline. Just geology and economics: NZ gas reserves fell 27% in a single year to a 20-year low, production is declining faster than forecast, and household gas prices are rising as a result. This is the honest guide for the roughly 270,000 homes on piped gas, especially anyone with gas hot water.
In 60 seconds
- •There is no gas ban in NZ. Nothing is legislated and nothing forces you to switch. This is a supply story, not a rules story.
- •The supply is shrinking fast. Reserves fell 27% in one year to 948 PJ, a 20-year low. Production: 155 PJ (2023), 125 PJ (2024), around 85 PJ expected in 2026.
- •Prices are rising as a result. Variable rates and daily fixed charges are climbing, and retailers are rebalancing away from gas. Officials and industry expect switching to accelerate in the late 2020s.
- •Piped gas is North Island only. Roughly 270,000 homes. The South Island has no natural gas network (bottled LPG only).
- •For gas hot water owners: keep using and repairing your system, but at end-of-life replace it with a hot water heat pump rather than another gas unit. That is the moment the switch costs you the least.
- •No rebates exist for hot water heat pumps in NZ. The installed price ($6,000-$9,000 typical) is the full price. Bank green loan top-ups (from about 1% p.a.) are the main financial lever.
The supply numbers
New Zealand's natural gas comes entirely from domestic fields (there is no import terminal). The fields are ageing, and recent reassessments have cut what producers expect to recover.
Production: 155 PJ. Reserves: 1,300 PJ.
The baseline year. Gas still flows, but field performance is already disappointing producers.
Production falls to 125 PJ. Reserves drop 27% to 948 PJ.
A single-year reserve write-down takes proven and probable reserves to a 20-year low. The decline is faster than officials forecast.
Production expected around 85 PJ.
Almost half the 2023 level in three years. Less gas means rising prices for the households and businesses that remain on the network.
Switching expected to accelerate.
Officials and industry expect household and business switching away from gas to pick up speed as prices rise and retailers rebalance their books away from gas.
Figures from official NZ gas supply and demand reporting; sources listed at the bottom of this page.
Who this affects
The impact depends on where you live and what runs on gas in your home.
Most exposed
- Now: Nothing changes. Your system works, repairs are fine.
- Each year: Expect variable rates and daily fixed charges to keep drifting up as supply tightens.
- At end-of-life: Replacing with a hot water heat pump instead of another gas unit ends the exposure. If hot water is your last gas appliance, disconnecting also drops the fixed charge.
Partly exposed
- Hot water first: It is usually the biggest gas load and the easiest to electrify at end-of-life.
- Keep the connection for cooking or heating if you want; the fixed charge stays until the last appliance goes.
- Heating note: Warmer Kiwi Homes can help eligible homes with insulation and a space-heating heat pump (it does not cover hot water).
No gas network
- No reticulated natural gas exists in the South Island; gas there means bottled LPG (plus a small reticulated LPG network in parts of Christchurch).
- Most homes already heat water electrically. The relevant upgrade is electric cylinder to hot water heat pump: roughly 60-75% less energy for the same hot water.
The economics of switching
Estimates for a typical 3-4 person household at average 2026 tariffs. These are estimates, not quotes; run your own numbers in the calculator.
Staying on gas hot water
Switching to a hot water heat pump
The honest framing
With no rebates in NZ, switching today purely to save on running costs is a long payback if your gas unit is young and healthy. The smart play is different: gas hot water units do not last forever, and when yours dies you will be buying something either way. At that moment, choosing a hot water heat pump over another gas unit locks in lower running costs and ends your exposure to a shrinking gas supply for the life of the new system.
- →Gas unit under 5 years old: relax, but know your plan for when it goes.
- →Gas unit 5-10 years old: get quotes now so a failure does not force a rushed like-for-like gas replacement.
- →Gas unit over 10 years old: it could go any time. Have an installer and a model picked so the switch is a phone call, not a panic.
What helps financially (and what does not exist)
Straight answers, because this is where most sites fudge it: there are no rebates for hot water heat pumps in New Zealand. Here is the complete picture.
Hot water heat pump rebates: none
No STC-style certificate scheme, no national rebate, no regional rebate. If someone promises you a government rebate on hot water in NZ, they are describing Australia.
Bank green home loan top-ups
ANZ (Good Energy), ASB (Better Homes) and BNZ: about 1% p.a. fixed for 3 years, up to $80,000. Westpac (Greater Choices): 0% up to $50,000 over 5 years. You need an existing home loan and equity; balances revert to standard rates after the promo window; some lenders require professionally certified installers. Check current terms with your bank.
Warmer Kiwi Homes (EECA)
Insulation grants and up to $3,450 toward a SPACE-heating heat pump for eligible owner-occupied homes built before 2008 (Community Services Card, SuperGold Combo card, or designated lower-income areas). Funded through 30 June 2027. It does not cover hot water heat pumps.
What to do now
If your gas hot water system is 6 years old or more, start planning. Gas storage units typically last 8-12 years, and a planned switch always beats an emergency one.
Check your gas bill
Find your daily fixed charge and your variable rate. That is your personal exposure to the crunch, and what disconnecting would save if hot water is your last gas appliance.
Compare gas vs heat pump →Compare hot water heat pump brands
Five brands have a verified NZ retail presence, from about $6,000 installed. Efficiency (COP), cylinder size, warranty, and noise vary widely.
Compare 5 brands →Get quotes before you need them
With no rebates, the quote is the whole price, so comparing two or three local installers is the entire game. It takes 2 minutes to request.
Get free quotes →Frequently asked questions
Is there a gas ban in New Zealand?
No. Unlike Victoria in Australia, New Zealand has no legislated gas ban, no end-of-life replacement mandate, and no deadline. The issue in NZ is supply: proven and probable gas reserves fell 27% in a single year (from 1,300 PJ in 2023 to 948 PJ in 2024), a 20-year low, and production is declining faster than forecast. The pressure on gas households is economic, not regulatory.
What is happening to NZ gas supply?
Production was 155 PJ in 2023, fell to 125 PJ in 2024, and is expected to be around 85 PJ in 2026, a faster decline than officials forecast. Reserves are at a 20-year low. With less gas to go around, household gas prices are rising and energy retailers are rebalancing away from gas. Officials and industry expect consumer switching away from gas to accelerate through the late 2020s.
Will my gas bill keep going up?
Nobody can promise a number, but the direction of travel is clear: a shrinking supply serving a network whose fixed costs are spread across the customers who remain. Both variable rates and daily fixed charges have been rising as supply tightens. The fewer households on the network, the more each remaining household carries.
I have gas hot water. What should I actually do?
Nothing dramatic today. Your system keeps working and repairs remain perfectly legal and sensible. The decision point is end-of-life: when your gas hot water unit dies, replacing it with a hot water heat pump rather than another gas unit means you stop being exposed to rising gas prices for the next 10-15 years. If hot water is your last gas appliance, you can disconnect entirely and stop paying the daily fixed charge.
Does the South Island have natural gas?
There is no reticulated natural gas network in the South Island. Homes there that use gas rely on bottled LPG (plus a small reticulated LPG network in parts of Christchurch). The roughly 270,000 homes with piped natural gas are nearly all in the North Island.
How much does switching to a hot water heat pump cost?
A typical replacement costs $6,000 to $9,000 fully installed (indicative, June 2026, GST inclusive), with supply-and-install bundles from around $6,400 and complex installations or relocations running $9,000 to $13,000. There are no rebates for hot water heat pumps in New Zealand, so that is the full price.
Are there rebates to help with the switch?
No. New Zealand has no STC-style scheme and no national or regional rebate for hot water heat pumps. Warmer Kiwi Homes covers insulation and space-heating heat pumps only, not hot water. What can help is financing: ANZ, ASB and BNZ offer green home loan top-ups at about 1% p.a. fixed for 3 years (up to $80,000), and Westpac offers 0% up to $50,000 over 5 years. You need an existing home loan and equity, and balances revert to standard rates after the promotional window.
Should I disconnect my gas connection entirely?
If hot water is your only gas appliance, disconnecting removes the daily fixed charge as well as the usage charges, which strengthens the economics of switching. If you also cook or heat with gas, you can still switch hot water and keep the connection, but the fixed charge stays. Ask your retailer what your daily fixed charge is and what disconnection involves before deciding.
Is a hot water heat pump actually cheaper to run than gas?
For most households, yes, on our estimates. A hot water heat pump runs at a COP of roughly 3.4-4.5, so a typical 3-4 person household spends around $250-$450 a year at average 2026 electricity prices (~35c/kWh). Gas hot water for the same household costs more in variable charges on our editorial estimates, before counting the daily fixed charge, and the gap is expected to widen as gas supply tightens. Run your own numbers in our calculator; every output is an estimate, not a quote.
Sources and further reading
The supply figures on this page come from official New Zealand gas supply and demand reporting and major-outlet coverage of it, verified June 2026.
- MBIE (Ministry of Business, Innovation and Employment) gas supply and demand data, including annual reserves and production reporting.
- RNZ reporting on the 2024 gas reserves write-down (27% fall to 948 PJ, a 20-year low).
- PwC 2026 Gas Supply and Demand Study (production outlook of roughly 85 PJ for 2026 and accelerating consumer switching expectations).
This page is independent editorial content. PumpSwap receives no government funding. We are a comparison platform that earns lead fees from installers when users request quotes. We strive for accuracy; if you spot an error, email josh@pumpswap.com.au and we will fix it.
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