Govt cool on heat plan

John Key marks the first two months of the Government's home insulation scheme in 2009. Photo / David Rowland

Insulation scheme faces scrap despite its huge success.

Treasury has heaped praise on a scheme which may be scrapped by the Government.

The future of a $330 million subsidised home heating and insulation scheme is in doubt despite tracking ahead of budget and being considered a huge success.

The Warm Up New Zealand: Heat Smart project began in July 2009, offering to pay up to a third of the cost to retrofit insulation and clean heating into homes built before 2000. More than 200,000 homes have benefited from the initiative.

The Herald on Sunday - which campaigned on the issue last winter - has obtained a glowing Treasury report which describes the benefits as "almost five times the resource costs". The estimates of gross benefits for the programme are about $1.3 billion compared with the resource cost of just $330 million.

The biggest success has been in the area of health improvements, which make up about "99 per cent of the total benefits".

"There are additional benefits that we have not been able to include in our analysis, eg comfort benefits associated with additional interior warmth and savings in other fuels ... We conclude that the dominant benefits (gross and net) of the programme are attributable to the insulation component of the scheme."

Minister of Energy and Resources Simon Bridges admitted the initiative was a winner but couldn't say if it would continue in its current form.

Bridges said about 230,000 homes would be retrofitted when the scheme ended in September.

A version of the scheme which targets lower-income families might be an option, Bridges said, but no decision had been made to include any announcement in the Budget on May 16. "While I understand this creates uncertainty for some in the insulation sector, I want to give an assurance that the matter is being considered carefully."

Labour Party housing spokesman Phil Twyford said the Government should boost the programme. "Kids are dying unnecessarily in under-insulated houses and it doesn't need to happen."

Twyford said the Energy Efficiency and Conservation Authority estimated there were 900,000 homes with inadequate insultation. "It's time to finish the job."

Industry fears job losses

Insulation industry bosses believe about 1,000 jobs will be lost if the subsidised home insulation programme is canned.

Most of the cuts would be in the installation sector but manufacturers would also be affected.

Tony Te Au, president of the Insulation Association, said: "It is a great opportunity to provide healthier and more efficient houses across the country, as well as providing ongoing employment for a lot of people. It would be unfortunate if this was curtailed."