Multifunctional NiO–ZnO heterostructure composite powder is economically synthesized through a solid-state route having a crystallite size of 23 (±2) nm. Chemical composition is identified through FTIR, the peak associated with Zn–O is detected at 1049 cm−1. However, the peaks detected at 870 cm−1 and 590 cm−1 show Ni–O stretching vibrations. UV-DRS technique is employed to estimate the energy band gap (Eg) around 3.18 eV. The impedance studies confirmed the presence of a non-Debye-type relaxation mechanism, electrical parameters confirm the contribution of electroactive regions i.e. grains and interfaces. An equivalent circuit model (R-CPE) is employed to measure various electrical parameters. Adiabatic small polaron hopping model is applied to estimate activation energies for Ni+2 (0.30 eV), Zn+2 (0.35 eV), and bulk (0.32 eV) respectively. The hopping length at the interface is estimated at around 0.8 Å by employing Mott's variable range hopping model. Jonscher's power law (JPL) is used to fit ac conductivity data, and conclude activation energy around 0.3 eV. The conduction mechanism through the whole frequency range (1–107 Hz) is governed by correlated barrier hopping. Various physical parameters i.e. binding energy (Wm), hopping length, and barrier height compared throughout the whole temperature range (313–393 K). The rate of increase in real permittivity at low frequency is related to the disorder of the cation at sublattices. These results deduced potential for NiO–ZnO heterostructure composite for high dielectric permittivity with low tangent loss for high energy storage applications.