Avoid a cold shoulder
There’s less than a year left to apply for insulation subsidies, and it’s first-in, firstserved
IT’S this time of year we start cursing our ancestors’ penchant for building charming but wildly impractical houses. Yes, the bay windows are lovely, but why aren’t they double-glazed? Also, did you really have to make the ceiling four metres high?
Back in the day, fuel was so cheap that no-one cared about retaining heat. These days, insulation is a must-have for keeping warm through winter, unless you don’t mind blowing your power bills through the roof.
Retro-fitting insulation typically costs several thousand dollars, but there are all sorts of subsidies and support packages to help you out.
The most generous is a government grant covering 50 per cent of the cost for rental properties. To be eligible, the house had to be built before 2000, and the tenant has to either have a Community Services Card or a referral from the Healthy Homes programme. Both landlords and tenants can contact one of the approved service providers on Energywise’s list to find out how to take the next step.
If you don’t have a Community Services Card but someone in the house has health problems exacerbated by cold and damp, don’t give up hope. Provided you’re on a low income and have a referral from a health professional, you may still be able to get the grant.
The Government’s initiative leaves a lot of owner-occupiers out in the cold. However, several community organisations have stepped in with additional grants and funding. The Community Energy Action Trust (CEA), for example, offers a 25 per cent subsidy for those who don’t meet the other criteria, as well as some limited money for heating and insulation on a case-by-case basis.
Most of these organisations are regional – the CEA services Canterbury, the West Coast, and Kaikoura – so find one in your area, or ask the approved providers to let you know what’s on offer.
Finally, some of the providers offer their own discount – for example, EnergySmart will chip in 25 per cent in certain circumstances. Between all these various subsidies, it can be possible to get 70 per cent or more of your costs covered.
Once you know what you’re eligible for, it’s time to figure out how you’re going to cover the remainder. Cash upfront is always best, but there are a couple of decent finance options too.
Ten different local councils have come to the table by allowing ratepayers to take out a loan for insulation, then repay it through their rates over several years. The amount you can borrow, interest rate and terms of the loan vary, so contact your council directly for more information.
The big five banks – ANZ, ASB, BNZ, Kiwibank and Westpac – have agreed to let customers apply to roll insurance costs into their mortgages, in some cases waiving the fees. Be wary of the fact that you’ll pay a lot more interest over the fullness of time.
Landlords, you better move fast. From July 2019, all rental properties must have a set standard of ceiling and underfloor insulation, where reasonably practicable. If you’re not motivated by your duties as a good human being, there’s a $4000 fine for non-compliance.
The Government’s 50 per cent subsidies will dry up in June 2018, if not before. There’s going to be an almighty last-minute stampede in the last year of the programme, and the subsidies are first-in, firstserved. The clock is ticking.
The incentives are strong for homeowners too, even though the power savings might not be that great. Studies have shown that people tend to use a similar amount of power before and after insulating – with the difference being that now they’re warm. This has huge health benefits, with some economists estimating a $6 return of investment for every dollar spent.
A warm and dry home makes for happier, healthier, wealthier and more productive citizens. Retro-fitting insulation is a nobrainer. Do it for your tenants, do it for yourself, do it for your kids, do it so you don’t get fined – just do it.
Got a burning money question? Email Budget Buster at richard.meadows@thedeepdish.org, or hit him up on Twitter at @MeadowsRichard.