There is a pressing need to expand electricity production in Aotearoa New Zealand to meet sustainability goals and lower energy costs. This new generation needs to be based on renewable sources, chiefly wind and solar, for both sustainability and economic reasons. While there remains a role for the legacy grid, microgrids provide a means of co-locating generation with load, minimising transmission line investment and energy losses. This paper explores the advantages of smart community microgrids in this context, but also examines the challenges in terms of the existing legacy grid approach. Three case studies are given as examples, covering an isolated community with no grid connection, a more conventional residential community of 30 households, and a community with local commercial/industrial loads in addition to housing. These case studies show the benefits in terms of local consumption of locally generated electricity coupled with sharing or local trading within the community. Microgrids can support New Zealand’s transition to a more electrified, equitable, economical and low-emissions energy system, but their development does require not just exploitation of new technologies, but also adjustment to the legacy grid model and a fresh approach to electricity infrastructure planning and management.