WUNZ meets 188,500 target: celebration at ParliamentEnergy and Resources
When the National-led Government came into office it was well known that the country’s housing stock was under par. There was ample and growing evidence that this was impacting on New Zealanders’ health and well-being, not to mention their power bills. Something had to be done, and we did it.
The programme, Warm Up New Zealand: Heat Smart, was agreed with the support of the Green Party. A few months later, the Maori Party also came on board and as a result of an agreement with them to insulate another 8000 low-income homes, our final target for the programme was revised up to 188,500.
This was a huge step up from previous Government programmes to insulate homes, which typically had insulated around 12,000 homes each year.
Not only was it a big step up for the Government, it was a big step up for industry. It meant we would more than triple the total amount of insulation retrofits in this country. It required manufacturers and suppliers to invest in new staff, training, and administrative systems, and in some cases, new plant and equipment.
I would like to thank those businesses for making those crucial investments that have allowed us to deliver this important programme. There are now 70 service providers around the country who are contracted to deliver this programme.
Today, I’m very happy to be announcing that the original target of 188,500 has been achieved, and as you know, the programme is continuing – in May this year we announced it would be extended within the original budget to insulate a total of 230,000 homes.
Overall the programme is making a real difference to New Zealanders’ quality of life: an insulated house is easier to heat – it reduces energy bills, improves comfort, reduces illness and sick days, and medical costs.
Independent reports on the programme show it delivers $5 of benefits for every $1 invested. Most of these benefits are in health and life expectancy.
There are other benefits. Anecdotal evidence is that this programme has created employment, particularly for young people doing the job of putting the insulation in ceilings and under floors.
In terms of creating demand, one of the barriers to uptake has been the upfront cost. Of course the Government subsidy of 60 per cent for low-income households, and around a third of the cost for of ceiling and underfloor installation for everyone else, has helped hugely with this. However, in most cases that still leaves a gap of sometimes several thousand dollars for the average household to find, and that’s a lot of money.
With that in mind, the Energy Efficiency and Conservation Authority (EECA), which runs the programme, has put in place various mechanisms to make it easier to invest.
For a start, the programme has been supported by significant additional funding - more than $80 million - from charities and trusts, who have helped lower the barriers to uptake for target low-income groups. This money has mostly gone into special projects, to assist low-income groups with particular needs, such as low socio-economic groups, or those with health needs such as asthma.
I applaud the initiative shown by many of these funders. For example, in Gisborne recently, I heard about the work carried out by the Eastland Community Trust. Their efforts mean that the Gisborne region has had the highest uptake of government-funded insulation in the country – 25 per cent of all the homes in the region have been insulated through Warm Up New Zealand: Heat Smart.
Another initiative that has helped overcome the upfront capital cost is the involvement of councils and banks. EECA has worked with councils around the country to put in place finance options that allow home owners to pay their investment off through their rates. And they have worked with banks to allow insulation investments to be paid off with the mortgage. They’ve all come to the party on this and I thank them too.
Another barrier has been information. Many people were simply unaware of the difference that insulation could make to their health and well-being. We’ve advertised the programme well, and used channels like the Energy Spot to explain how insulation works.
As a result, attitudes to insulation in New Zealand have actually shifted. Now when you look at real estate or rental ads, yhey are very likely to state whether the place is insulated or not. In other words, expectations are now higher, and this will have long-lasting effects.
In the end, some of the best endorsements are by word of mouth. Once we had enough people taking up insulation, and they realise the difference it makes, and they tell their neighbours and friends, uptake really grows.
Installation quality has also been a priority for EECA. For insulation to be effective and safe, it has to be installed correctly. EECA has worked with industry to make sure they are aware of standards and best practice, and to ensure installers are meeting strict quality standards. Installers are now consistently meeting a 90 per cent pass rate.
The Government is now considering where to next, but all I can tell you at the moment is that decisions have yet to be made. We are operating in tight financial times, and every dollar we spend is being closely considered.
Today is a chance to celebrate the success we’ve had so far, and to thank all of those people who have played a part in this. Many of those people are here today – thank you all for your contribution in meeting this milestone.