Half of insulation scheme users low-income - Govt

Peter Neilsen says people with higher incomes are more likely to apply for the Government's home insulation subsidy. File photo / Hawke's Bay Today

More than half of the 8000 houses insulated under the Government's scheme belong to low-income earners, Energy Minister Gerry Brownlee says.

Mr Brownlee was responding to an online survey which suggested big earners are lining up for the Government's home insulation subsidy, prompting fears middle income earners will miss out unless the scheme gets more Government money.

The survey of 1578 homeowners found high earners were twice as likely to want to take advantage of floor and ceiling insulation subsidies under which home owners must pay up to $3500 themselves.

The poll - paid for by the Business Council for Sustainable Development - suggested demand for the popular scheme is likely to greatly exceed the money available.

The $323 million scheme gives grants of up to $1300 to insulate floors and ceilings in homes built before 2000, and $500 towards a heat pump or other energy-efficient home heating.

The poll suggests about 280,000 home owners may apply - pushing demand well above the four-year target of insulating and improving heating in 180,000 homes.

Business council chief executive Peter Neilsen said the real number would be lower as people changed their minds, but "it looks as though there would be a risk that there would be more people applying than the programme provides for".

Those on high incomes tended to be more likely to say they planned to apply for the subsidy cash.

Homeowners making more than $200,000 a year made up only 1 per cent of respondents, but 45 per cent of them planned to get help with home insulation costs, as did 35 per cent of those making $70,000 to $100,000 and 29 per cent of those on $100,000 and $150,000.

That compared with 22 per cent of the general population - and 15 per cent of those making between $20,000 and $30,000 a year.

Mr Neilsen said that in a recession people with jobs and good incomes would be in a better position to pay the $2500 to $3500 shortfall between the subsidy and the full cost.

As well, a large proportion of them had cold homes despite their relative wealth.

People on very low incomes with a community service card - who get an insulation subsidy of up to 60 per cent - had been subsidised for close to a decade so some of their needs would have been met, he said.

Mr Brownlee said over 8000 houses had been insulated under the scheme.

While it was a "superb result", even more important was that 57 per cent of those houses belonged to low-income New Zealanders, Mr Brownlee said.

"The scheme is delivering to a lot of low-income New Zealanders right now.

"It's been a great scheme, very successful," Mr Brownlee told reporters today.

A spokesman for the Minister yesterday said people on middle incomes could pay the shortfall by increasing their mortgages.

All major trading banks had agreed to waive fees for this.

But Labour's energy and climate change issues spokesman, Charles Chauvel, said the Government needed to spend a lot more money on the scheme, or direct it at people who really needed it.

"There is this issue of whether the subsidy is set high enough to make it attractive to people who are not rich by any means but who don't qualify for enough assistance to make it worthwhile."

Anyone with an uninsulated pre-2000 home is eligible if they can find an approved installer to do the work.

Mr Neilsen said the results showed many people who could not pay the shortfall between the subsidy and the full cost of insulation were keen to borrow money from local councils and pay it back through their rates.

Four councils - Hawkes Bay Regional Council, Wellington Regional Council, Environment Canterbury and Nelson City Council - planned to allow this, and others are expected to follow.

The survey also showed huge demand for subsidised heat pumps from people who had already insulated their ceilings and floors.

- With NZPA