Power firms back insulation plan

Jeanette Fitzsimons says reports of a $1 billion scheme of Government grants were close. Photo / Mark Mitchell

Power companies could offer cheaper electricity and banks targeted mortgage top-ups to encourage people to insulate their homes.

The Government will announce a major boost to home insulation subsidies in today's Budget.

Although no details had been formally announced last night, Green Party co-leader Jeanette Fitzsimons, who helped draw up the package, said reports pointing to a $1 billion scheme of Government grants were "in the right ballpark".

It is thought the Government will offer owners of up to 900,000 poorly insulated homes grants of about $1500, with the possibility of loans from power companies, banks and local authorities to cover the rest of the cost.

The Business Council for Sustainable Development - which has championed a scheme of mixed grants and loans - said banks and power companies among its membership were generally positive about a grants scheme and some had already started looking at ways to offer loans.

Westpac head of corporate responsibility Suzie Marsden said the bank might offer mortgage top-ups, or small loans of around $2000-6000 to help people take advantage of the funding.

Details would be worked out after the announcement today, she said.

The Energy Efficiency and Conservation Authority estimates it costs between $2200 and $3400 to retrofit ceiling and floor insulation to a 100sq m home.

It has been suggested power companies could offer loans for the rest of the cost not covered by Government grants, to be repaid through a customer's power bill.

A spokesman for Contact Energy said the company had expressed its willingness to work with the Government on whatever insulation package was announced.

Mercury Energy general manager James Munro said the company did not see itself as a lender or administrator of loans.

But the company was willing to promote the scheme, perhaps by advertising it in mail-outs or offering preferential rates to customers who committed themselves to upgrading their homes.

Ms Fitzsimons said she was not concerned that the lack of an income cap for claimants would see high-earners snap up many of the benefits.

"We're confident the package is big enough that everyone will get a fair go," she said.

Government funding is already available for some low- and middle-income earners to help with draught-proofing, insulating floors and ceilings, wrapping hot water cylinders and pipes and installing heat pumps and wood pellet burners.

Business council home performance improvement project manager Heather Stonyer said removing the income restrictions would spur many more people to upgrade their homes.

She said homes should be rated for energy efficiency to make sure owners got credit for their investment.

A ShapeNZ survey of 2610 people for the business council found 26 per cent would consider taking out a home insulation loan from their electricity provider, 22 per cent would consider taking a mortgage top-up from a bank and 21 per cent would consider taking up a loan from their council to be paid back through their rates.

Many owners and renters of New Zealand's 900,000 pre-1978 homes live in chilly and damp conditions because their houses have not been adequately insulated.

The Government's package is not expected to bring those homes up to current building code standards, but supporters of the scheme say it would stop a large chunk of household heating being wasted through uninsulated ceilings and floors.

* How we stack up

900,000: Estimated number of homes built before insulation became compulsory in 1978.

$2200-$3400: Estimated cost of adding ceiling and floor insulation to a 100sq m home ($1850 for floor-only).

$1 billion: Amount Government is expected to offer homeowners to help with insulation costs.

$475 million: Estimated yearly cost of energy wasted from poorly insulated homes.

180,000: Number of sick days each year that could be saved by properly insulated homes.

Sources: EECA, New Zealand Business Council for Sustainable Development, Green Party