Market News – 14 September 2026

New Zealand investors do not often get the opportunity to invest in a genuinely new electricity company.

That is why we are excited about the recently announced listing of Lodestone Energy, a New Zealand renewable electricity company that has developed from a start-up in 2019 into an operating solar generator with five solar farms, a growing development pipeline and ambitions to become a nationwide electricity gentailer.

Chris Lee & Partners has followed Lodestone since its early days. Some of our clients invested in the company's original capital raise and have watched the business develop from plans on paper into an operating electricity generator.

The proposed IPO provides an opportunity for investors to assess Lodestone’s plans for the next stage of its development.

Its ambition is to become a vertically integrated electricity company, generating electricity from its own solar farms and selling that electricity directly to commercial and, increasingly, residential customers.

The easiest comparison is with Meridian Energy, Mercury, Contact Energy and Genesis Energy. These companies own electricity generation and also sell electricity to consumers, hence the term "gentailer".

Lodestone is trying to build a new gentailer from the ground up, based primarily on solar generation and is already marketing its business in the Hawkes Bay for clients to join.

The company currently has five operating solar farms at Kaitaia, Edgecumbe, Waiotahe, Whitianga and Clandeboye. Together these provide approximately 266 GWh of annual generation. Clandeboye, Lodestone's first South Island farm, produced its first electricity in August. 

What particularly interests us is the repeatability of the model.

Rather than concentrating its capital into a handful of enormous generation projects, Lodestone generally aims for solar farms of around 25 to 35 MW. This is an attractive size because suitable land is easier to find, and the farms can be positioned close to population centres and existing substations which reduces the grid connection cost. 

A typical farm costs around $50 - 55 million to develop and produces around $6 million to $7 million of annual revenue. Lodestone believes it now has the capability to develop two or three of these farms each year, resulting in the businesses tripling over the next 5 years.

The strategy is relatively easy to visualise - find a suitable community, secure land and a grid connection, build a solar farm, contract the electricity to customers and then repeat the process somewhere else.

Lodestone already has a substantial pipeline of identified sites from which to do this.

In simple terms, management is planning to approximately double the business by FY29 and then roughly double it again by FY32.

That is an unusual growth profile for an NZX electricity company, which prompts the question from investors as to where the money will come from.

Building two or three $50 million solar farms each year requires substantial capital. This is where the proposed IPO becomes particularly interesting.

Management's base case is that the capital raised through the IPO, together with cash generated by the growing portfolio of operating assets, debt and potentially some partners, should be sufficient to fund the company's current development programme through FY32. In other words, Lodestone's present business plan is intended to become self-funding rather than relying upon shareholders continually contributing additional equity. 

We regard this as an important feature of the investment proposition.

It does not mean Lodestone will never raise capital again. If an attractive acquisition emerges or management decides to accelerate construction, another capital raising may make sense.

There is also another part of the Lodestone strategy that we particularly like.

The company does not intend to simply build solar farms and sell all of the electricity into the wholesale spot market.

Solar generation is extremely cheap to operate once a farm has been constructed, but it has an obvious limitation in that every solar farm produces electricity at roughly the same time.

As more solar enters New Zealand's electricity system, there is a risk that wholesale electricity prices during sunny periods decline. A solar generator relying entirely on the spot market could therefore help depress the price it receives for its own electricity.

Lodestone will want its generation effectively fully contracted or hedged rather than relying on unpredictable spot electricity prices. 

Its customer strategy is central to achieving this.

One of Lodestone's early innovations was its Virtual Rooftop Contract. Rather than requiring a business to install solar panels across hundreds of individual buildings, Lodestone generates the electricity at one of its large solar farms and contracts that renewable generation to customers as though the panels were effectively on their own roofs.

This model is proving attractive, with well over 300 sites already under this Virtual Rooftop model.

The attraction to customers is straightforward. They can contract renewable electricity without finding suitable roof space, installing and maintaining thousands of panels, or contributing the capital required to build the generation themselves.

Lodestone is now taking this strategy into the mass residential market.

The company became an approved electricity retailer in 2025, has established the necessary billing and operating systems, tested its retail offering and begun building towards its first mass-market customers. 

We think this could become one of the most important parts of the Lodestone story.

Management's ambition is effectively to enter a community, build a solar farm nearby and progressively sell electricity to businesses and households in that area.

If it works, Lodestone will own relatively low-cost electricity generation while also controlling the relationship with the customer purchasing that electricity.

That is the same economic model that has made New Zealand's existing gentailers valuable businesses.

Lodestone is attempting to build a new version of that model, without the legacy generation portfolios of the established companies. It has already shown that it can identify sites, obtain consents, finance projects, construct utility-scale solar farms and attract large commercial customers.

The next test will be whether it can build a residential customer base at scale. That is a different challenge from selling electricity to large commercial customers and will require Lodestone to acquire and retain thousands of households.

The backdrop is favourable. Electricity demand in New Zealand is expected to increase substantially over coming decades as transport and industrial processes electrify, gas availability declines and new sources of demand, including data centres, enter the market.

Lodestone does not need a large share of the market to become a much bigger company. Its current plans assume it can build towards approximately 2% of its addressable electricity market, with a longer-term ambition of 3% to 4%. If it can achieve that while continuing to add generation, the business will look very different from the company being listed today.

That also explains why Lodestone should not be compared too closely with the existing listed gentailers. Its priority over the next several years is growth, with cash generated by the operating portfolio expected to be reinvested into additional solar farms rather than paid out as dividends.

The next five years are therefore likely to be focused on expanding generation and building the customer base. If Lodestone reaches the scale it is targeting, the rate of development could eventually slow and more cash could become available for dividends.

Someone seeking an immediate 6% dividend yield is unlikely to view Lodestone in the same way as Genesis or one of the established electricity companies. The attraction is instead what the business could become if it delivers on its growth plans.

The attraction to this IPO is the potential for capital growth. If Lodestone can continue expanding its generation portfolio, build a meaningful retail customer base and do so without repeatedly returning to shareholders for more equity, the earnings capacity of the business could look very different five years from now.

The final investment decision will depend on the IPO price, forecast earnings, debt, cash flow, development expenditure and the assumptions behind the company's growth plans. 

The Product Disclosure Statement (PDS) will provide the detail needed to assess those factors properly.

In the meantime, clients who think they may be interested in participating are welcome to contact us with their CSN and an indicative investment amount. 

We can record their interest pending our review of the final PDS, pricing and offer terms. This does not commit a client to investing.

The proposed listing is also a welcome development for the New Zealand sharemarket, which has seen too few new companies come to market in recent years. 

Lodestone would bring something different to what has been listed recently, with a New Zealand founded electricity company with operating assets, institutional shareholders, an established development pipeline and plans to build a national gentailer.

Since being founded in 2019, Lodestone has moved from concept to operating five solar farms, constructing a sixth and selling electricity to commercial customers around New Zealand. 

The next phase is considerably more ambitious, with management seeking to expand generation and establish a meaningful residential customer base.

If it can execute that plan, and if the IPO is priced at a level that gives new investors enough upside for the risks involved, Lodestone could become one of the more interesting growth companies to join the NZX in recent years.

We look forward to seeing the numbers when it releases its Product Disclosure Statement.

Christchurch & Auckland Seminars

Following our recent investor seminar at Southward Car Museum in Paraparaumu in July, we are pleased to confirm that we will be holding our last two seminars in Christchurch and Auckland.

The seminars are open to existing clients, friends, family and other investors.

The Christchurch seminar will be held at Burnside Bowling Club at 11:00am on Thursday, 17 September.

The Auckland seminar will be held at Fairway Events Centre, North Shore, at 11:00am on Wednesday, 23 September.

We will discuss the current investment environment, recent developments across New Zealand and international markets, risk management, and some of the companies and sectors we are currently watching closely. We will also discuss signals of distress, aiming to caution risk-takers.

If you would like to attend either of these seminars, please contact us by email to reserve a place.

Bond issues

Metlifecare has announced a new senior secured bond, likely opening next week. 

The bond will have a term of 6 years, with an interest rate of at least 5.75% per annum.

Metlife is expected to pay the brokerage costs on this offer, however this will be confirmed next week once the deal opens.

Contact Energy is expected to issue a new subordinated capital bond in October. We expect the bond to have a term of around 6 years, with an interest rate of at least 5.75% per annum.

Investors who may be interested in these potential bonds are welcome to contact us with their CSN and an indication of the amount they may wish to invest. 

We will then contact them once the final terms and further details are available.

Travel

Our advisors have an extensive travel schedule coming up over the next quarter, including the following dates:

22 September – Lower Hutt – David & Gavin

24 September – Ellerslie, Auckland – Chris Lee

25 September – Ellerslie, Auckland (AM only) – Chris Lee

25 September – Palmerston North – David & Gavin

5 October – Napier (Havelock North) – Edward Lee

5 October – Nelson – Chris Lee

6 October – Napier (Mission Estate) – Edward Lee

6 October – Blenheim – Chris Lee

9 October – Wellington – Gavin Parkes

21 October – Auckland (Albany) – Edward Lee

22 October – Auckland (Ellerslie) – Edward Lee

We will also visit Christchurch, Wellington and Lower Hutt in November. Dates to be confirmed.

Please contact us if you would like us to visit your area or would like an appointment.

Edward Lee

Chris Lee & Partners