Jeanette Fitzsimons
Government Spokesperson on Energy Efficiency
23 November 2006
Media Statement
Switch on the sunshine
The Government is investing $15.5 million in a Green Party initiative to increase the use of solar water heating in New
Zealand.
Government Spokesperson on Energy Efficiency and Conservation Jeanette Fitzsimons says with climate change accelerating
and energy prices rising, it makes sense to use the sun to heat our water.
The programme will run for five and a half years from now, with $15.5 million allocated for the first three and a half
years. Funding levels for the final two years will be decided after a review in 2009. The programme includes:
* Providing independent information to help consumers decide whether solar is suitable for them, and what kind of system
they need;
* Motivating demand through promotion;
* Improving quality and cost effectiveness by working with industry including setting standards and encouraging training
opportunities;
* Providing financial assistance to home owners;
* Putting more solar water heating systems into Government buildings; and
* Encouraging new ideas through an Innovation Fund.
"Our initial goal is to double the numbers of solar water heating systems being installed,"Ms Fitzsimons says.
This will see approximately approximately 15,000 to 20,000 systems installed by 2010. Assuming this electricity would
have otherwise been supplied by coal and gas power stations, the estimated CO2 savings are equivalent to getting 5000 to
7000 cars off the road.
Solar water heating will help many New Zealand families reduce their power bills while also reducing their impact on the
environment, Ms Fitzsimons says.
Energy and Climate Change Minister David Parker says the Government has developed this programme as part of its broad
approach to promoting energy efficiency and renewable sources of energy in the home as well as reducing greenhouse gas
emissions.
"Further initiatives in this area will be made clear in the New Zealand Energy Strategy and the draft National Energy
Efficiency and Conservation Strategy, which will be out for public consultation shortly.
"I am pleased to be working closely with Jeanette Fitzsimons as we make progress in these areas,"Mr Parker says.
The finance assistance available from the Government for purchasing solar water heating systems will increase from $300
to $500 from February 2007. This is provided in the form of a contribution to the cost of interest on a loan.
Access to the increased finance assistance will be subject to systems meeting criteria on energy performance and cost
effectiveness.
The criteria will mean taxpayer funding will only be available to the systems that deliver most effectively for
homeowners.
"We know solar water heating is more cost-effective for larger households (four or more people) and that it is important
that it is installed properly, to maximise the capture and transfer of the sun's energy. We want to help families select
the system that is best for them,"Ms Fitzsimons says.
From May 2007 there will also be assistance for new home builders. Details are still being finalised.
Switch on the sunshine
Solar Water Heating Programme Outline November 2006
The Government has agreed to a five and a half year solar water heating programme, starting now, and is investing $15.5
million for the first three and a half years on top of existing EECA funding. Funding levels for the final two years
will be decided after a review in 2009.
The proposed programme will increase demand through information, demonstration and promotional programmes, and direct
financial incentives. This will be supported by measures to strengthen the industry's ability to respond to increased
demand by delivering quality, cost-effective installations. The programme includes:
* Providing independent information to help consumers decide whether solar is suitable for them, and what kind of system
they need;
* Motivating demand through promotion;
* Improving quality and cost effectiveness by working with industry including setting standards and encouraging training
opportunities;
* Providing financial assistance to home owners;
* Putting more solar water heating systems into Government buildings; and
* Encouraging new ideas through an Innovation Fund.
This overview of the programme refers only to the first three and a half years, although it is likely that many of these
activities would be continued into the final two years.
The core programme
The core programme enhances EECA's existing information provision, adds a new promotional campaign, and continues and
enhances EECA's existing quality assurance and capability building activities, which are essential to support and
strengthen the solar water heating industry to respond to increased demand. Key elements are:
* Enhanced objective information provision through upgrading the existing website and 0800 service to support informed
decision-making;
* Promotion to raise awareness of government support and motivate consumers to access information through the website
and/or 0800 service;
* Education and training of the industry (including architects and builders) about best practice and standards;
* Monitoring and auditing of training providers and the installation industry to ensure standards continue to be met;
* Short term assistance with training costs by paying approximately half the fee for approved solar water heating
installation courses in the first half of 2007;
* Developing case studies and monitoring the performance of selected installations to support the commercial and
government sectors'decision-making.
The government sector
The aim of the government sector programme is to demonstrate leadership by installing solar water heaters, including
larger scale systems, in its own buildings. The programme will provide funding for feasibility studies, direct grants,
and assistance with tender processes. Benefits will be demonstrated to other agencies, commercial operators and the
public.
At least 12 potential projects have been identified across district health boards, the New Zealand Defence Force,
Ministry of Agriculture and Forestry, Department of Corrections, Housing New Zealand Corporation, Child, Youth and
Family and local authorities.
The first installation to go ahead will be at Auckland District Health Board's Greenlane Clinical Centre.
This element ties closely to the Govt3 programme led by the Ministry for the Environment, which also requires
departments to accelerate the adoption of sustainable building practices and energy efficiency measures.
The residential sector
Solar water heating is most cost effective where capital costs are low and the operating costs of hot water usage are
high.
The potential solar water heating residential market is large, so in order to maximise cost effectiveness the programme
will target households of four or more people. The programme will deliver information to homeowners and developers to
enable them to determine if solar water heating is suitable for them, and if so, what type of system is most
appropriate.
Existing houses and new one-off houses
To retrofit an existing house or install a system on a new one-off or custom-built house, a homeowner will be able to
apply for finance assistance.
The finance assistance available from the Government for purchasing solar water heating systems will increase from $300
to $500 from February 2007. This is provided in the form of a contribution to the cost of interest on a loan.
Access to the increased finance assistance will be subject to systems meeting criteria on energy performance and cost
effectiveness.
Volume-built new houses
For volume-built new houses (major projects involving multiple houses built "on spec") the builder or developer will be
eligible to apply for assistance from May 2007. Details are still being finalised. This will encourage volume builders
to make solar water heating a standard feature on all suitable homes.
Innovation Fund
The aim of the contestable Innovation Fund is to provide support for projects not otherwise eligible for grants and
loans. Strong weighting would be given to proposals that will result in the installation of a large number of systems,
or can otherwise demonstrate significant impact on increasing the uptake of solar water heating.
Examples of possible projects could be demonstration projects with commercial applications, multiple dwelling building
installations, lease to buy schemes or new technologies.
Heat pumps for water heating
Heat pumps for water heating compete with solar water heating systems and in certain applications are more cost
effective. There are currently a small number of domestic heat pump water heating systems available in New Zealand. The
heat pump water heating industry will be eligible to compete for support through the contestable Innovation Fund upon
meeting appropriate criteria. When the SWH scheme is reviewed decisions will be made about whether the heat pump water
heaters should participate in any other aspects of the programme.
Switch on the sunshine
Frequently Asked Questions on solar water heating (SWH)
November 2006
1. How much can I save by installing a solar water heating (SWH) system?
The answer will be different for every home, depending how many people live there, how much hot water they use, how much
sun the home gets, the electricity or gas tariff, and which SWH system they use.
In the average New Zealand household, about one-third of energy costs can be attributed to heating water. An effective
SWH system will reduce electricity consumption for water heating by 50% or more over the course of a year. In summer
months, the reduction of electricity consumption for water heating should be more than 80%, but in winter months it will
be less.
An effective SWH system in a four person home saves about 2,200 kWh (kilowatt hours) of electricity consumption a year.
At current electricity prices, that's around $350 to $450 a year, depending on the rate you're paying.
2. How does a solar water heating system contribute to reducing greenhouse gas emissions?
A SWH system contributes indirectly to reducing greenhouse gas emissions by reducing the use of electricity that might
otherwise be generated from fossil fuels
3. How much does a SWH system cost?
The total cost of installing a SWH system in a residential property varies greatly depending on a number of factors but
for a residential property can range from about $3,500 to about $8,000. In general, the cost of installation for new
buildings is significantly less than for retrofits.
4. Has any public input been sought on this policy?
The Government issued a discussion document on SWH in September and received 135 written submissions and feedback from
about 120 people at public meetings. There was general support for:
* The provision of objective information, quality assurance and industry capacity building;
* Government leadership through the installation of solar water heating systems on Government buildings; and
* Financial incentives.
5. What's included in the new programme?
* Providing independent information to help consumers decide whether solar is suitable for them, and what kind of system
they need;
* Motivating demand through promotion;
* Improving quality and cost effectiveness by working with industry including setting standards and encouraging training
opportunities;
* Providing financial assistance to home owners;
* Putting more solar water heating systems into Government buildings; and
* Encouraging new ideas through an Innovation Fund.
6. How long will the programme run?
The programme will run for five and a half years from now, with $15.5 million allocated for the first three and a half
years. Funding levels for the final two years will be decided after a review in 2009. It is expected that in the longer
term changes to the Building Code to increase energy efficiency requirements and the Home Energy Rating Scheme will
contribute to encouraging people to install solar water heating.
7. What's the Building Code got to do with SWH?
The Department of Building and Housing is seeking feedback on proposals to improve the energy performance of buildings.
One of the proposals is to develop an acceptable solution for solar hot water heating systems, which will make it easier
for territorial authorities to assess building consent applications for the installation of such systems.
The benefit of solar hot water heating systems is a reduction in consumer power or gas bills for heating water.
The energy efficiency discussion document is available at www.dbh.govt.nz
8. What's the Home Energy Rating Scheme and how does it relate to SWH?
The Home Energy Rating Scheme will provide a star rating (or similar) to householders based on the energy efficiency and
energy performance of their houses, and is expected to be launched from December 2007.
As well as rating the building envelope and space heating, it is intended to include a rating of the efficiency of a
home's water heating system. It will also provide home owners with recommendations of how to improve their rating, which
could include recommending solar water heating as one option.
Overseas experience has shown that homes with better ratings are starting to be valued more highly by buyers, which
creates an incentive for people to better their rating and to make improvements to their homes - including potentially
by installing solar water heating.
Further information is available at www.eeca.govt.nz
9. What about heat pumps for water heating?
Heat pumps for water heating compete with solar water heating systems and in certain applications are more cost
effective. There are currently a small number of domestic heat pump water heating systems available in New Zealand. The
heat pump water heating industry will be eligible to compete for support through the contestable Innovation Fund upon
meeting appropriate criteria. When the SWH scheme is reviewed decisions will be made about whether the heat pump water
heaters should participate in any other aspects of the programme.
10. Why fund solar water heating?
The promotion of solar water heating is one of the initiatives in the Labour-led Government Co-operation Agreement with
the Green Party. It gives people direct experience of using renewable energy in their homes and may provide a model for
supporting uptake of other renewable energy forms in the future.
Solar water heating is one part of a broad approach to promoting energy efficiency and renewable energy sources. It's
not the only option the Government is interested in, but it's an important energy choice for consumers.
11. What else is the Government doing about energy efficiency?
The government is working hard to ensure secure energy supplies and at the same time reduce carbon emissions by
promoting energy efficiency and energy from renewable resources.
The government is developing a New Zealand Energy Strategy (NZES) that will set a long term strategic direction for the
energy sector, and a new National Energy Efficiency and Conservation Strategy (NEECS) that will focus on managing energy
demand into the future. The government is also working on a comprehensive work programme to help New Zealanders adapt
and respond to climate change.
Other initiatives include:
* Improving energy efficiency in homes and buildings through the Building Code;
* Developing a Home Energy Rating Scheme (HERS);
* The existing Warm Homes programme, which helps New Zealanders to reduce the pollution effects of home heating while
staying warm;
* The Govt3 programme which helps central government agencies to become more sustainable and to pursue energy savings;
* Proposals for a biofuels sales obligation, which would see a proportion of biofuels included in petrol and diesel
sales by law; and
Measures to improve the fuel economy of vehicles.
ends