Rorting of the Government's multi-million dollar Energywise home insulation and heat pump scheme is rife and consumers can get a cheaper deal without the state handout, say complainants.

But the state has defended itself, denying ripoffs and saying the scheme is based on a competitive market.

Claims of abuse were made this week after the Herald showed that Aucklanders were cold-shouldering the scheme.

People said the state programme was failing taxpayers yet helping business get big grants after the Energy Efficiency and Conservation Authority released figures showing how since mid-2009, when the scheme started, 120,000 houses had benefited from the Warm UP NZ: Heat Smart campaign, of which just 24,000 were in Auckland.


Only 5.4 per cent of Auckland houses got the grant, second-lowest behind the West Coast, compared with 16 per cent of Nelson places and 13.8 per cent in Gisborne.

George Tyler said the outcome should be no surprise because ripoffs were rife.

"When my folks decided to get a heat pump and insulation put in, they got quotes with the handout and ones without.

"The companies that are allowed to be subsidised charge much more, to the point where my folks got their name-brand heat pump and insulation installed without the subsidy, for less than it would have cost them with it.

"The whole thing is a joke. You tell me, if it's cheaper to get something done without the subsidy than with it, which would you choose?" Tyler asked.

David Thew said one reason for low uptake was price gouging.

"A friend got a price to install a Fujitsu heat pump from a government-approved installer from the North Shore - didn't like it when they wanted payment in cash before they came, which is a big danger sign.

"They got a price off a Torbay Fujitsu agent. He was cheaper, even without the Government's $500 subsidy. Part of the problem is [approved installers] must provide all three systems - insulation, wood fires and airconditioning - so it cuts out all the local guys who are almost always cheaper."


Rachael McCarthy called for an investigation into "the scoundrels that have added the discount to their bill which actually negates any advantage".

"I happened to inquire about this from a non-registered installation person and he showed me a file he was compiling of the quotes other people had been given and what the real costs should be under the scheme. A lot of the registered suppliers had inflated prices so it wasn't the consumer who was benefiting but the installer ...

"This is what stopped me proceeding with this for the moment."

Richard Barrington of Wellington said a large percentage of homeowners, including those in more affluent suburbs, "were happy and motivated to climb into the ceiling or under the house to install Batts, when they find the time, but they don't like the idea of using companies ... who appear to be making large sums from our tax dollars. I'd rather encourage the Kiwi DIYer".

"If the Government worked with the insulation supply chain and offered a rebate to homeowners for self-installation then I'll believe it's about warmer, drier homes for all. As it stands, it still seems cheaper for me to drive down to Mitre 10 and buy Batts at the full GST-inclusive retail price to install myself," Barrington said.

Vicki Connor, team manager marketing services at the authority, said yesterday the programme was based on a "really competitive market and we don't think rorting is occurring".

"The programme offers certain benefits that not all businesses outside of the scheme would offer, and there are multiple providers in most areas so people are able to shop around to get a deal they are happy with.

"Occasionally we get feedback from people who are querying a high price. When this happens we contact the service provider or the house owner to check the details.

"In most cases, EECA has found that quotes are not comparable because different products, sizes, or R values of insulation are being quoted.

"Service providers have their contracts reviewed annually and any concerns are investigated and worked through."

Martin Wylie of Eco Insulation, one of the North Island's largest government-selected providers, said about 12,000 houses had been insulated by his business since 2009. He said Housing NZ work had resulted in the business fitting a further 11,500 houses.