An Aotea-founded energy company is aiming to disrupt the electricity market with a new home battery system that bypasses traditional retailers, allowing households to buy and store power when it is cheapest.
Aotea Energy is launching its AE-1 battery in Auckland and Christchurch this week. The system gives households direct access to wholesale spot prices for a $20 monthly subscription, with all power, network charges, and levies passed through at cost.
Starting at $10,500 plus a $1500 installation fee, the battery is targeted at households that use enough electricity to make the upfront investment stack up.
Aotea Energy founder Tama Toki said the home battery system, which is paired with the Aotea app, uses intelligent computer technology to purchase power when wholesale prices drop.
Toki is already an established entrepreneur, having founded the Aotea cosmetics label. The skincare brand produces moisturisers and other products using traditional mātauranga Māori formulations, with ingredients sourced from the north of Great Barrier. Alongside its own retail locations, the cosmetics company supplies the amenity kits for Air New Zealand’s business and first-class passengers.
“The secret sauce, if you like, is every battery we build comes with a computer that has both reactive and proactive back-end policies. It gets signals from parts of the generation and retail markets that allow us to anticipate price spikes and price falls, so we can buy those cheap electrons,” Toki said.
Following a year of trials, the company says the system could cut annual household power bills by 65 percent.
“Over the past 12 months, our whole fleet has paid an average of 6 cents per kilowatt hour across the full trading period. On average, that works out at about $2700 in savings a year, with a payback period of between three and six years.”
Toki noted the battery could also be paired with rooftop solar—though it is not required—allowing excess power to be exported back to the grid when prices peak. He cautioned, however, that the setup will not make sense for everyone and is currently best suited for high-use consumers.
Buying from the wholesale market carries inherent risks due to price volatility, particularly during dry-year periods when hydro lake levels drop. In August 2024, wholesale prices spiked sharply. While most retail customers were protected by standard hedges, some industrial users exposed to the spot market faced severe financial strain.
Toki acknowledged these wholesale risks and stressed that Aotea works closely with potential customers to explain the system before signing them up.
“In terms of sequencing, when we onboard customers, we always make sure that we take their bills and we get the consumption load profile and really kind of ragdoll their consumption and loads against that month in particular,” he said.
Despite the risks, Toki said Aotea extensively stress-tested its system against scenarios like the August 2024 price shock. While costs were higher than standard retail rates during that specific month, the system held up well overall.
“Across a whole year, I think the average cost per kilowatt hour is about 6 cents. And that’s taking into consideration all that kind of dry-year risks and long tails that you have on the wholesale market,” he said.
Toki believes the systemic issues behind the 2024 spikes have largely been addressed, creating a strong tailwind for Aotea Energy’s model.
The company, which retains proprietary ownership of its New Zealand-assembled hardware, is backed by Sir Stephen Tindall’s K1W1 fund and Vend founder Vaughan Fergusson. It has also appointed former Tesla Energy operator Antoine Riboulon as chief operating officer.
-with RNZ
