Country:New Zealand
Policy status:Superseded
Date Effective:2009
Date Ended:2013
Policy Type:Economic Instruments>Fiscal/financial incentives>Grants and subsidies
Policy Target:Buildings>Building Type>Residential, Buildings>Existing buildings, Residential Appliances>Space heating, Residential Appliances>Water heating, Energy Utilities
Agency:Energy Efficiency and Conservation Authority (EECA)
Funding:An initial NZD 323 million over four years. An additional NZD 24 million and a move to a multi-year appropriation (allowing flexibility to bring funding forward to meet demand) was announced on 23 November 2009.
Evaluation: The evaluation reports on this programme confirm and quantify its success to date – which translates to NZD1.2 billion net benefits to New Zealand over the expected life-time of measures delivered under the programme, with a benefit cost ratio of 4.3:1. The majority (99%) of the measured net benefit is from improved health. The major assessed benefit from the programme is in improved health resulting largely from warmer, drier conditions after insulation is installed. Reduced mortality comprises around 74% of the assessed health benefit along with a drop in hospitalisation rates and costs, particularly in relation to asthma, respiratory and circulatory illnesses. Other benefits include avoided pharmaceutical costs, reduced absenteeism from school and work, and fewer medical visits. The evaluation of the programme found that 85% of the insulation uptake has been additional to the background market rate and is therefore directly attributable to the programme. That equates to an additional 6.6 million m2 of insulation and an additional NZD35-53 million in producer surplus annually, worth NZD192 million (NPV 4% discount rate) over the four years of the programme. The industry will employ more than 1,100 people at the peak rate of installation. About 60% are directly employed in installation, production of materials and administration, whilst the remainder are indirectly employed by working for firms supplying the producers, importers, retailers and installers. Over the 4 year programme, direct and indirect employment will be nearly 3,500 person-years.

This programme ended in September 2013. Until then, Warm Up New Zealand: Heat Smart had been the Government’s principal energy efficiency programme in the residential sector for four years. The programme provided consumers with information on home insulation, grants for the installation of energy efficiency measures (through subsidies for ceiling and underfloor insulation installed through approved service providers) and clean heating devices  in homes built prior to 2000.  

The scheme paid – without income restriction – one-third of the cost of installing ceiling and under-floor insulation up to a maximum of NZ$1,300. People on lower incomes were eligible for up to 60 per cent of the total cost of insulation and NZ$1,200 towards a clean heating appliance, provided the home was first insulated. Landlords whose tenants were low-income earners could also receive the 60 per cent subsidy.

The programme operated on a co-funding basis with four sets of partners: local government, iwi, existing and new service providers, and energy retailers. Generally this third-party funding was applied to low-income households to cover the remaining 40 per cent of the costs of insulation not provided by the programme.

In Budget 2009 the Government allocated the programme NZ$323 million over 4 years. The initial aim was to retrofit over 180,000 homes. In November 2009 the Government announced that the programme would be enhanced by an additional NZ$24 million of funding targeted at low-income families, allowing an additional 8000 households to benefit. In Budget 2012, the programme was extended further, to deliver a total of at least 230,000 insulation retrofits. To the end of September 2013, the programme delivered 235,000 insulation retrofits.

Evaluation reports confirm and quantify the success of the programme. Net benefits to New Zealand are calculated to be worth NZ$1.3 billion over the expected lifetime of measures delivered under the programme, with a benefit:cost ratio of more than 4:1. The majority (99 per cent) of the measured net benefit is from improved health resulting from warmer, drier conditions after insulation is installed. 

Related policies:Home Energy Ratings Scheme
This record is superseded by:Warm Up New Zealand: Healthy Homes
This record supersedes:Energywise Homes Package

Last modified: Fri, 03 Nov 2017 17:08:02 CET