A Government-subsidised home insulation scheme will be extended for a year, Energy Minister Phil Heatley announced in today's budget.

The Warm Up New Zealand programme was scheduled to expire in July next year, but would now be extended to July 2014.

The original goal of insulating 188,500 homes would grow to a total of 230,000 homes.

Treasury officials said the scheme, introduced in 2009 as part of an election agreement between National and Greens, had proved to be more efficient than expected.


The insulation of an extra 41,500 homes would be paid for with savings made in the scheme in 2011/12.

We are providing value for money by using savings to insulate more homes for the same investment, Mr Heatley said. The Government's commitment to the Maori Party to target a further 20,000 low-income homes for home insulation will be met by the extended programme.

Budget 2012 also redirected more money into energy efficiency in the business sector, but not into household energy savings.

The Energy Efficiency and Conservation Authority (EECA) would spend $2.5 million on initiatives such as making commercial chillers more energy-efficient.

This initiative would mean cutting EECA's grants for efficient water-heating, which would be replaced by an information programme.