Evaluation of the Warm Up New Zealand: Heat Smart programme
This is a $340 million multi-year programme funded by the NZ government that provides funding for insulation retrofits and clean, efficient heating grants for NZ households. It began in 2009 and is the largest programme of its type in NZ history, intended to produce a range of energy and health related benefits.
A cost benefit analysis of the programme, commissioned by the Ministry of Economic Development, was done by a consortium including NZ Centre for Sustainable Cities members Philippa Howden-Chapman and Nick Preval.
The cost benefit analysis produced very favourable results, driven largely by savings in hospitalisation costs and reduced mortality for a vulnerable sub-group (people aged 65 and over who had recently had a circulatory system related hospitalisation). The final cost benefit analysis suggested that the programme would have a net benefit of $1.2 billion, and a benefit cost ratio of approximately 4.32:1 (based on the favoured model).
Under the programme, subsidies are provided towards the costs of retrofitting insulation and/or installing clean heating for pre-2000 houses. The benefits that are included in this report are analysed in more detail in 3 separate papers produced as part of this study that assess the impacts on energy use, health outcomes and producer surpluses, with additional data on employment. The costs of the programme are also assessed in this report and include the costs of the additional insulation and clean heating plus the administrative costs falling on the government. Administrative costs for companies are assessed as part of the report on impacts on industry.
We analyse the impacts on monthly metered electricity and reticulated gas use of the houses retrofitted with insulation or clean heat source under the New Zealand Insulation Fund (NZIF) programme, titled “Warm Up New Zealand: Heat Smart”. Our study covers the period from the scheme’s introduction in July 2009 to November 2010.
Improvements to housing can potentially prevent ill health, especially in sections of the population exposed to substandard housing. People in developed countries spend more than 90% of their time indoors, most of it in their own homes but although research in the area is growing, we still know little about the specific health effects of the indoor environment at a population level.
This report provides an input to an evaluation of the New Zealand Insulation Fund that is coordinated and delivered by the Energy Efficiency and Conservation Authority (EECA). The report is part of a wider study on the costs and benefits. It examines the expected impacts of the programme on production and installation of insulation and clean heating, the impacts on producer surplus, and the impacts on additional employment.