Labour's controversial power-pricing plan is in the firing line, with energy spokesman Stuart Nash urging the party to dump the "questionable" policy.

The party is reviewing its manifesto after last year's crushing election defeat. Nash is working on a discussion paper which proposes that NZ Power be dropped in favour of promoting cheaper solar power.

The brainchild of ex-finance spokesman David Parker, NZ Power would see the creation of a new state agency to buy electricity wholesale and bring down prices. It was announced in tandem with the Greens two years ago.

But critics said it would damage the renewable energy sector - and Nash, who took on the energy portfolio in November, agrees. He also believes the market is competitive.

"It will be my very strong recommendation that we drop NZ Power," he said. "There are very few people that think it is a policy that's needed in 2015. Maybe 10 years ago there was a strong argument for it, but not now.

"We have got a regulatory framework - the Commerce Commission and the Electricity Authority - which is out there looking at predatory behaviour, and also with a strong mandate to foster competition . . . you could argue that the level of competition necessary to drive prices down is coming in."

The authority recently noted there were 27 retailers in the market, with the bigger firms - Mighty River, Meridian, Genesis and Contact - losing share.

Energy prices fell by 0.6 per cent in the last year.

Nash said consumers were becoming smarter. "Government regulation you use as a tool when you see market failure, and I'm not seeing market failure. I had a look at some of the assumptions that made up NZ Power and I question those . . ."

He would rather a future Labour government partnered with the industry to push for more solar power and electric cars.

"I'd like to see 90 per cent renewables by 2025 . . . I would like to see the Government put regulations in that every new build must contain some level of solar or photovoltaic."