• About this site|
• Site index|
• Contact us|
• Jobs

Warm Homes Technical Report: Social Drivers: Phase 2 Report

Executive Summary

1 Overview of Social Drivers Work Programme

2 Four Local Workshops

3 Interpreting the Concept of a 'National Programme'

4 Recommendations for Developing a National Warm Homes Programme

Appendix A: Analysis of Issues and Options for Programme Design

Appendix B: Attendance Lists for the Four Community Workshops

Appendix C: Comparative Analysis of the Four Warm Homes Workshops

4 Recommendations for Developing a National Warm Homes Programme

4.1 Introduction

This section discusses the elements that the consultants see as being essential for developing a national Warm Homes programme. It is 'national' in the sense of country-wide coverage, with common elements provided by central government through the co-ordinated efforts of principal agencies (eg, the Ministry for the Environment, the Ministry of Health, the Energy Efficiency and Conservation Authority and district health boards). But it is also a decentralised programme, the concept being that the programme is run out of local bases, with community ownership, and allowing for regional/local differences in circumstances.

The analysis in this section has been informed by the social drivers framework (Phase 1 report), which covers:

• influences within the individual's immediate day-to-day circumstances
• influences in terms of individual capabilities, particularly the level of knowledge, understanding and skills to make decisions to change
• influences from the public policy environment, particularly the decisions, commitments and agency behaviours most likely to be perceived by householders, and often mediated by the media
• influences from the community and the immediate social environment
• the orientation of home heating and related commercial services.

The analysis also draws on the key informant interviews undertaken as an integral part of Phase 1, the findings from the four workshops and the prioritisation of social drivers that were summarised in section 2.

4.2 Policy and programme outcomes

The Warm Homes agenda has mixed objectives that may conflict with each other

The mixed objectives include improving air quality, improving energy efficiency [This is taken as meaning increasing the benefits (sometimes described asenergy services, eg, hot water, drive power from motors), derived per unit of energy used.] and improving the average temperature of homes. There is generally no conflict between improving energy efficiency and improving air quality or average temperature, [Although improving energy efficiency can be an objective in itself, it is more properly stated as a means to achieve other objectives. Often energy efficiency is pursued as a proxy for these other objectives. However, energy efficiency is subject to diminishing returns, so investment in further levels of energy efficiency may not always represent the cost-effective optimum.] but there may be a conflict between increasing temperature and improving air quality. Solid fuel heated homes tend to be warmer than electrically heated homes. Improving air quality may reduce the range of heating options and/or increase the cost of heating, which may reduce the amount of heating and hence the temperature.

There has tended to be a very mixed institutional framework in operation, with the clean air and healthy homes agendas largely going down separate tracks, although both are generally linked to improvements in home insulation.

The potential negative social impact of improving air quality addressed by large ratepayer subsidies

In pursuing their respective air plan objectives, both ECan and Nelson City Council have instituted a comprehensive package of assistance aimed mainly at lower-income households initially, and funded largely from the councils' ratepayer base. This has come about as a result of social impact analyses carried out by these councils, and a desire to avoid adverse income and health impacts on the low-income sections of their communities. Such targeting has received a favourable response from low-income households, but has largely failed to produce similar outcomes for households earning higher incomes.

Cold/unhealthy homes addressed through energy-efficiency retrofits

The cold homes agenda was largely initiated at the grassroots community level through concern about energy poverty. Many new organisations have formed in the past few years focusing on delivering a basic package of energy-efficiency measures to needy homes. Low-income households, or those with special needs, are generally targeted. [Usually defined as those qualifying for a Community Services Card, but not exclusively so: some groups use other assessment criteria, such as a system of referrals from other agencies.]

Central government policy, specified in the NEECS, supports this energy efficiency focus. There are two main programmes: upgrading the energy efficiency of the country's older (pre-1977) housing stock through the EECA's EnergyWise home grants scheme (which embraced properties owned by local councils), and a 10-year retrofit programme initiated by Housing New Zealand for its 60,000 properties.

The programmes are currently strongly focused on outputs (ie, the number of energy efficiency measures implemented and theoretical energy savings) rather than outcomes related to healthy homes (ie, the numbers/proportion of households that are able meet a minimum warm home standard in winter time). At a local level, the involvement of district health boards has been shaped by the extent to which community enterprises (often iwi-based), established to carry out the retrofitting, have lobbied for money to complement funding made available from the EECA and other agencies.

A high-level, integrated, outcomes framework is needed

There is a need to define outcomes for both clean air and healthy homes within an integrated framework of thinking. For clean air, the pollutant limits have been defined through the NES, and these can be translated into specific policy objectives and actions via the respective regional councils. For 'healthy homes' activities, such outcomes have not been defined. In the absence of clear outcomes, various outputs (such as insulation improvements) have been used as de facto measures of achievement. Yet from the work reported in the Phase 1 report, such energy efficiency improvements on their own will only raise average indoor air temperatures by about 1ºC, and will not necessarily provide for healthy indoor living environments.

The World Health Organisation recommends 18ºC as the minimum indoor temperature for rooms occupied by the elderly, children and people with disabilities. Below 16ºC and there are health risks. The Christchurch Older Persons Co-ordinating Group has recently established a preliminary Canterbury Warm Home Standard for older people of 18ºC for the living area, and no less than 12ºC as the minimum night temperature in the bedroom. [This standard has been developed by the Canterbury District Health Board, Christchurch School of Medicine and Health Sciences, Department of Public Health and General Practice, Medical Officer of Health, Older Persons Health, and community groups such as Community Energy Action, but it is undergoing review because of concern that the temperature standards are too low for the elderly and infirm.]

There is a need to determine whether this is an appropriate warm homes standard that should apply across the country. After determining this, energy modelling can be carried out to ascertain the energy requirements needed to achieve those minimum standards, based on the Building Research Association of New Zealand house thermal model (annual loss factor, ALF) and the home heating options work undertaken as part of the Warm Homes project. This will enable optimal solutions for heating, appliance type and energy efficiency to be determined based on a number of standard house types in various areas around the country. This could then form the basis of some relatively simple standard solutions to be used by advisors in the field. The model could also be further developed as an in-field operational tool to enable a range of options to be compared quickly.

4.3 Household participation and community buy-in

The 2013 timeframe set by the NES is a challenge

Compared to the time taken to make progress with clean air initiatives and energy efficiency, the 2013 NES timeframe is a challenge. For example, in Christchurch it has taken years of debate and policy development to reach a consensus on an air plan approach. [The air plan appeals process is still ongoing.] Significant subsidy programmes have been under way for clean air since the late 1990s and have reached about 10,000 households. But within the next eight years a further 30,000 households will be required to change at least their heating appliance.

Energy efficiency projects funded by the EECA in 2003/04 reached about 4000 homes, yet if the targets specified in the NEECS are to be reached a rate four to five times higher will be required. In particular, the Warm Homes initiative will need to get traction in smaller centres that so far have had limited awareness of cold homes and air pollution issues.

Achieving the outcomes will require a mix of policies and actions that work together in a synergistic way. The key elements of this mix are:

• developing a national Warm Homes framework, with successful implementation reliant on community-level responsiveness, utilising the momentum and sense of community that exists in smaller centres
• understanding the social drivers of people's heating decisions, with policies designed to 'work with the grain' of those social drivers
• implementing high-profile local programmes of change that are wide-ranging (ie, involve awareness raising, education, incentives, rules, etc)
• delivering the programme through a co-ordinated 'single hit' on each home - beginning with a comprehensive energy assessment, which is then followed up by the set of actions needed to bring the home up to the Warm Homes standard.

An important starting point is understanding that different things drive different people. The range of social drivers detailed in the Phase 1 report shows this. The prioritisation of social drivers undertaken at the four workshops showed that the same driver can act to enhance change for some market segments and individuals, but act as an inhibiter for others. The Warm Homes programme must therefore set out, from the outset, to appeal in the broadest way possible to as many people as possible.

Figure 1 sets out a schematic representation of the way a Warm Homes 'market' might work under a range of inducements. Starting at the left, there will be some level of market-driven response that will require no inducements. Beyond that, a range of inducements will probably be required if specific targets or outcomes are to be achieved. The inducements range from low-cost (eg, information-driven campaigns) through to high levels of financial assistance. From the point of view of programme design, as long as the required outcomes are being achieved in the desired ways, programme cost efficiency will be best achieved by exploring all the ways of getting market uptake with the lower-cost inducements.

Figure 1: Schematic representation of uptake under a range of inducements

Drive the programme of change through local, co-ordinated leadership

It is impossible to define the perfect institutional arrangements required in each local level from a national level. Each community will have their own circumstances: the extent of the air quality problem may be more or less acute; there may be unique local drivers for existing behaviours or for alternatives; the history and effectiveness of organisational relationships will be unique; some will have more local resources at their discretion to support change than others; and some may have already experienced publicly funded programmes.

A multi-agency approach is most likely to provide the platform to raise community awareness, locate households in need of change, and develop local capacity to service the changes required. Regional councils (or unitary councils) will have a key leadership role through their responsibility for clean air outcomes. Local health providers and social agencies have key roles in addressing the cold homes issue. District nurses, Plunket nurses, primary health organisations, general practitioners, etc. have important existing relationships with many households and are trusted by the community, so failure to incorporate them may effectively reduce programme accessibility to, or uptake by, many households.

Local agencies must also ensure that the innovation, enthusiasm and potential leadership offered by both the non-profit sector and the commercial sector are not marginalised. Failure to incorporate social service, community groups and local non-government organisations (NGOs) effectively reduces programme accessibility to many households, and misses out on local leadership and champions for promoting the programme, particularly for communities that are 'starting cold'. Involving a mix of community groups, service clubs, larger-scale local employers and so forth increases the likelihood of accessing households who need to change, and helps build positive peer influence and word-of-mouth reinforcement for change.

Creating a local 'steering group' will be a good start

The social drivers project team experienced much enthusiasm at the facilitated meetings in Masterton, Tokoroa and Timaru, indicating that communities are receptive, with some collaborative initiatives already under way. The creation of a local community 'steering group' which includes (at least) local government, health agencies, NGOs, energy sector representatives, commercial players, landlords and other property interests should be the foundation for each community getting started. This could evolve into a more formal local Warm Homes 'partnership'. The consultants would expect the concept of 'roving leadership' to emerge, perhaps driven initially by the appointment of an education co-ordinator, and then evolving as programmes get under way (see next section).

Get local businesses involved by pointing out the implications for future resource consents

The NES is part of the broader national resource management framework. Consequently, failure of a community to meet the NES target will result in a situation where the regional council may decline future resource consents involving the significant discharge of PM₁₀ to air. The NES comes with an expectation that regional councils will devise a strategy to produce a downward trajectory of winter-time exceedances - from present levels down to one exceedance per year, which will be allowable from 2013 onwards. It is expected that the obligation on regional councils to decline air discharge consents will be triggered by any failure to keep below this 'downward trajectory'. Consequently, local businesses have a very real and immediate interest in their community's ability to meet these targets.

Lessons from past and current programmes should be carefully considered

Recent evaluation undertaken by ECan [Personal communication, Ken Lawn, Director Operations, ECan.] suggests that the main factors inhibiting people participating in the current Clean Heat programme are:

• the overall cost to the householder
• the perception that some of the required changes don't offer many benefits
• the complexity of the process
• limited heating choices
• delays in processing
• not having to make the change immediately.

A related issue is the capacity to do the work required. If the required number of households are to be engaged, then the capacity of skilled people to make individual household assessments will need to increase significantly in the very near future. The same can probably be said of the capacity of enterprises offering high-quality home heating and insulation retrofits. [Experience has shown, however, that commercial services are generally able to gear up quite quickly to meet customer demand.]

These lessons, and experience from the range of other programmes undertaken (both in New Zealand and overseas) should be tapped in to. No new Warm Homes initiative need 'reinvent the wheel'. New initiatives should be able to get started quite quickly, largely avoiding some of the pitfalls experienced in the past. However, it will require all the elements for programme success to be meshing together, and for all the Warm Homes partners to be focused on delivering the outcomes required.

A national Warm Homes programme offers new opportunities in New Zealand

The discussion above has focused on localised action, largely reflecting the New Zealand experience where there has been no national programme of action. However, a commitment to a national Warm Homes agenda offers the opportunity for co-ordinating, resourcing and profiling this issue in completely different ways, perhaps in much the same way as has occurred in the UK with Warm Front. [Warm Front is the UK Government's nationwide grant-funded scheme for tackling fuel poverty. See:http://www.defra.gov.uk/environment/energy/hees]

The consultants recommend that a high-level national establishment group comprising representatives from some of the parties identified for local groups, government officials and others offering specific expertise be set up to drive this initial process.

4.4 Publicity, awareness raising and education

There needs to be a systematic drive to raise awareness of Warm Homes issues and solutions

Outside Christchurch and Nelson there appears to be a relatively low awareness of air pollution issues and their related health impacts. There is little awareness about the air pollution issue, the NES, and the limitations on granting new resource consents for significant discharges to air in already polluted airsheds..

There is, however, growing awareness of cold homes issues among social agencies, with many communities now having programmes of some type under way to address cold homes and the unaffordability of home heating. However, there needs to be a focus on raising awareness and educating particular groups who are at risk from cold-induced health effects (and from air pollution). In particular, the elderly need special attention because of behavioural/psychological barriers, such as a tendency towards frugality and doing without, not spending money on heating, objecting to paying higher prices for electricity, etc. Information is needed to specifically address and counter some strongly held attitudes.

There are other groups who for various reason are more vulnerable to negative health impacts, including infants, who have under-developed immune systems; people with existing respiratory health conditions; people with physical disabilities, who are less mobile than others and who therefore require higher ambient temperatures in their homes; and people recuperating at home after stays in hospital. Special efforts are needed to assure such households that their circumstances will not be overlooked in a Warm Homes programme.

Awareness raising is a necessary first step in galvanising community support and focusing on solutions

There will be a time delay between awareness-raising campaigns and public acceptance and willingness to take action. For this reason, publicity programmes can, and should, commence as soon as is practicable, even if implementation does not begin until July 2006, which seems likely. There will always be people who are ready to change immediately, and the programme needs to accommodate these people and avoid creating frustrating delays. Such early adopters are vital to building change momentum in the community, and provide local experience of positive change.

Consistency of messages from trusted agents is vital

It is vital that there be a consistent message coming from all sources. It would be fair to observe that so far consistent consumer information has been lacking. For example, the benefits of retrofitting insulation improvements are often misrepresented: typically 30–40% savings on energy are cited, but experience shows that such savings are rarely achieved in New Zealand's under-heated houses. Rather, a large proportion of the theoretical savings is taken back as improvements in comfort and health. From the Warm Homes perspective, this is a benefit that should be more widely cited and promoted.

Information and awareness-raising is most likely to succeed by working through local agencies and groups (and commercial agents) with established relationships to households. This creates a local network of agencies, all promoting consistent messages. People are receptive to some forms of messages coming from some particular players and not from others, but they still need to receive the same message. Some suggestions for how this could occur are to:

• involve key local community agencies and businesses in education/training, and then in developing educational/information resources
• employ an education officer/co-ordinator/advisor
• set up an information centre - a one-stop shop for Warm Homes information and programme facilitation
• have national-level resources to call on (ie, generic material that can be localised, national identities who can champion the cause, etc).

Initiating educational and information programmes, raising awareness within communities, developing attitudinal and behaviour change and supporting householder decisions through customised information can be considered an initial part of the local capacity building required in each community.

Develop 'active' information tools that will help to stimulate the market

Educational, informational and awareness-raising activities need to be reinforced by providing more 'active' information, such as the Home Energy Ratings Scheme (HERS). If home energy ratings were actively used in the marketplace, then it would be possible to see energy improvements in houses being recognised through the HERS, and some degree of value being attributed by the market to these improvements (including the rental market). This would reinforce the market as a driver of energy efficiency and clean heating improvements. A HERS may also help in the development of a Warm Homes standard.

The more the value of a warm home can be reflected in marketplace information, and the more the private benefits of changes to heating can be promoted, the more voluntary change is likely to occur – without resorting to large subsidies/ incentives. Information resources should also be focused on messages reinforcing the private benefits of change.

Personalised advice

The Warm Homes concept (achieving a warm, healthy indoor environment while minimising external pollution) can be technically complex to achieve. Many householders will require specific guidance about the current status of their house and heating system, the advantages/disadvantages of their options, the applicability of incentives available and how to access them, etc.

ECan's Clean Heat programme includes an individualised household assessment and advice, which has proven to be a vital part of the process. Community Energy Action also includes a household check and heating advice with all its energy efficiency retrofits, but because these retrofit packages generally do not include subsidised heating the feedback from customers about the value of the advice is not as positive (eg, householders will often respond with,"Why are you telling me about this when I simply can't afford it?").

The key lessons are:

• all programmes need skilled and trained people to communicate the concepts of the programme and provide individualised technical advice to households
• if information/advice is to be useful, the 'total package' offered by the Warm Homes programme must include sufficient opportunities to enable all households to act.

4.5 Financial assistance and incentives

Reasons for using financial incentives/assistance

Financial incentives and assistance are widely regarded as being essential within the mix of measures necessary for inducing behaviour change towards warm homes. In theory, additional regulation could be used as the sole means of achieving a shift to clean air compliance, but in practice regulation alone is likely to result in a number of perverse and adverse effects. These include the likelihood of exacerbating cold homes impacts, pushing people towards low-initial-cost appliances that have other adverse health effects (such as unflued gas heaters), probably creating a community sense of unfairness, and a likely high level of non-compliance. Regulation will also be too slow to achieve the required outcomes because of the time taken to finalise rules through the Resource Management Act process.

Similarly, in theory the issue of cold homes might be addressed by requiring minimum standards in homes, or through high levels of awareness-raising and education. In practice however, the willingness/ability to pay for capital investment is generally the biggest barrier in those segments of the market where there are cold home health risks. Providing incentives and assistance has proven to be relatively effective in addressing this issue.

The current levels of publicly funded incentives range from the 100% for clean-air and energy-efficiency packages associated with ECan's and Nelson City Council's programmes for low-income homeowners (Community Services Card holders); 75–90% (typically) for energy-efficiency packages part-funded through the EECA's residential grants programme; [The total incentive comprises a mix of both central government funding through the EECA, and local funding derived from a range of sources.] and 30–50% (typically) through clean-air assistance schemes for non-Community Services Card homeowners and for landlords. The higher levels of incentive exist entirely for social reasons: to achieve change without incurring social costs on the target group, and to avoid perverse effects.

Efficient reduction in air pollution suggests non-discriminatory funding

An efficient reduction in air pollution is one that is achieved at least cost. This will likely be achieved by focusing on:

• appliances that are the heaviest polluters
• households where the change away from a heavily polluting appliance can be achieved at minimal cost.

The trajectory of pollution reduction specified by the NES will put an emphasis on achieving immediate and ongoing air pollution gains. [This is to show that ambient air quality is consistently moving down to the designated 2013 target.] While there may be some coincidence between high-pollution open fires and low-income households, there is no reason to suppose that focusing the programme on low-income earners achieves the outcome efficiently. Indeed, if high-income people use more fuel they are likely to generate more pollution, and high-income households will be less likely to be restricted by the cash-flow constraints that inhibit change.

Incentives should be transparent and based on need

There is the argument that any cut-off level or criterion for assistance is arbitrary. Those just above the Community Services Card level – the 'kiwi battlers' – are just about as unable to afford the payments as those who are just below the cut-off, and are often those with much higher levels of other household expenses such as mortgages. This particular group has been consistently identified throughout the consultation undertaken for this project as a group who are disadvantaged by current eligibility policies. [Note that any means-tested subsidy may raise issues concerning effective marginal tax rates at whatever cut-off level is chosen.] Also, there are some people who are eligible for a Community Services Card but choose not to have one. Better and more flexible ways of identifying need in the community are required.

Limited forms of incentive can't cater for a wide range of needs, and may increase public costs

The almost exclusive focus of incentives has been on providing one-off grants. The key gap has been the provision of time payments or loans. Energy loans offer the potential to:

• provide greater coverage in the market and cater for households where the current system of grants may not be suitable
• go beyond the basic package of energy-efficient heating initiatives being offered at present to include higher-priced options such as double glazing (which would be effective and attractive to many households)
• reduce the overall call on public money (or increase the total number of households benefiting from the same level of public expenditure).

An appropriate loan scheme would reduce the social cost (eg, government interest rates rather than private sector rates), and would have low compliance costs (eg, security through a targeted rate on properties with a loan). There has been limited experience with the use of loans, [The EECA's Solar Water Heating loans scheme was launched in 2004, and ECan is currently considering a loans scheme that would allow payback via individually targeted rates.] and more is needed to gauge uptake and market potential. Also, the financial services sector has so far not been active in providing such services, and efforts need to be put into encouraging the sector to provide financial services that support the Warm Homes agenda.

Try to avoid incentive 'creep'

Part of the philosophy of incentivising households through the Clean Heat programme was to provide a time-limited incentive, with the idea that this would reward early movers. However, experience suggests that because uptake has been slow in some incentive streams, the (institutional) tendency is to try to correct this by offering greater levels of inducement as time goes on. The net result is that slow movers are rewarded, early movers are effectively disadvantaged, and public costs increase - which achieves the exact opposite of what was intended.

If the general public perceive this to be the usual typical institutional response, then it would be predicted that a certain amount of 'gaming' of the system as people hold off changing in the belief that doing so will result in more generous subsidies being offered later. If this sort of incentive creep is to be avoided, all the required elements of inducements need to be present from the start: a range of incentives set at realistic levels (and able to be responsive to genuine need), publicity and information encouraging change, plus real rules and regulation that could (and would) be applied.

4.6 Regulations and rules

Air plan rules take time to become operative

The time taken to give effect to rules promulgated through the Resource Management Act planning processes may be several years (allowing for consultation, appeals, etc). For ECan, the process was begun several years ago, and could be a further two years before the rules become operative. For some other councils this process has barely begun.

Both Nelson City Council and ECan have developed rules limiting the types of appliances that can be installed, and providing cut-off dates for when certain classes of solid-fuel appliance need to be phased out. The main implication for councils is that in the absence of the ability to apply rules, the options come down to the threat of a future rule (which has proven to be a very poor driver of change), information and persuasion, and financial incentives. Without the effective back-up of rules to ensure appliance phase-out and compliance, councils may lack the ability to pursue Warm Homes outcomes efficiently, and may have to revert to higher levels of incentives than would otherwise be the case. Yet experience suggests that even very large incentives may not be sufficient to induce some people to change.

Implementing rules requires good information

Effective implementation of rules often comes down to effective targeting, and effective targeting requires good quality information. For example, if a 15-year age exclusion rule for enclosed solid-fuel burners is to be implemented, councils should have a good quality database that enables all such appliances to be known by location (ie, a complete inventory of all solid-fuel appliances in use, including their types, age, location, etc). This will enable every applicable household to be effectively targeted, both for the provision of information and incentives, and for compliance monitoring.

Integrate Warm Home objectives into other rule-making jurisdictions

Warm Homes objectives might also be pursued beyond the Resource Management Act/NES air quality framework. For instance, it will be worth considering whether Warm Homes outcomes could be usefully enhanced through requirements within the Residential Tenancies Act and the Building Code, both currently being reviewed, led by the Department for Building and Housing.

4.7 Funding sources

Current funding and products provided

Current sources of funding for clean air and socially focused energy-efficiency retrofit programmes are as follows.

• ECan and Nelson City provide 100% assistance for Community Services Card holders, with lower incentive levels for landlords and non-card homeowners. Money is mainly sourced from local rates, with the EECA making a small contribution to the insulation component. Overall, ratepayers are shouldering the cost for what are mainly social outcomes, which means that those on 'non-low' [This term has been used deliberately by the consultants. Many households that miss out are not on high incomes, and include those whose incomes are just above the cut-off point for defining 'low-income'.] incomes are paying to improve community health.
• The EECA, through the EnergyWise home grants scheme, aims to achieve a 1:3 (government: local sources) funding ratio, although in practice funding is generally in the 1:1 to 1:2 range.
• Housing New Zealand are retrofitting houses throughout New Zealand with energy efficiency measures and some heating appliances. This project is fully self-funded via central government.

Organisations using EECA funding supplement this support with a range of other funding sources, including local energy trust funds, health funding, employment-based funding sources, energy lines companies, energy retailers, local rates, community funding trusts, other one-off grants and donations, as well as customer contributions.

Extrapolating current funding arrangements to a national Warm Homes programme will place an unwarranted burden on local ratepayers

The total cost for Christchurch to convert 30,000 homes over eight years is estimated to be about $90 million. [This is total investment, not public funding (average of around $3,000 per household).] The Christchurch Clean Heat scheme has been able to be sustained largely by ratepayer contributions because:

• the ratepayer base is being used to fund less than 40% of households (ie,. the costs can be spread to a wider population)
• the scheme (and its predecessors) was intended to run for a 15+ year period, allowing costs to be spread over time.

Compare this to other areas of the country, where up to 75% of households use solid-fuel heating and there may need to be a rethink on heating types in order to improve air quality. As well, the change will have to be made within an eight-year timeframe (to 2013). The consultants conclude that an extrapolation of the Christchurch/Nelson funding arrangements may be unsustainable in many of these communities.

The overall level of investment in change required to achieve the NES target by 2013 may be substantial – possibly in the hundreds of millions of dollars nationally. While this is a large sum, it needs to be put into the context of annual household heating expenditure and potential savings in government health expenditure.

The need for a fair and efficient funding model

If the benefits are seen as being a mix of better health outcomes, which is a local community benefit, and lower health costs, which is a saving to central government, then there is a logical argument for perhaps half of the funding to come from central government. Not only would this make economic sense in terms of where the benefits accrue, but it is also likely to make the target outcome achievable in high-impact communities.

4.8 The Warm Homes package of measures

Providing for customer choice

People's willingness to change is strongly influenced by the heating choices available, and the perceived benefits offered by those choices.

The psychological impact of losing the comfort/flame effect of an open fire is real, and there may also be a perceived loss of a social and convivial atmosphere. But experience has shown that when a package of measures is offered that provides an overall warmer, more comfortable environment with a more easily controllable heating system, many of these initial barriers can be overcome. The experience in both Christchurch and Nelson suggests that when the capital cost of alternatives to open fires is fully subsidised, about 70% of people choose a heat pump (despite qualms about cost and reliance on electricity figuring strongly as a social driver inhibiting change). Post-installation surveys have overwhelmingly shown high levels of satisfaction with the outcomes. [Community Energy Action 2003/04 surveyed 22 Christchurch households that had been assisted out of an open fire to a heating package involving a heat pump and energy efficiency measures (as part of either ECan or Housing New Zealand programmes). The survey was undertaken one winter after the change, and sought quantitative information on changes in electricity use, as well as qualitative information on the householder's attitudes and behaviours. See:http://www.cea.co.nz/Reports/Heat%20Pump%20Survey.pdf]

Improving insulation is an integral part of the change

Part of the reason for the very high levels of satisfaction referred to above is that ceiling and floor insulation are provided as part of the total package. Improving dwelling insulation helps to achieve both air-quality and cold homes objectives - potentially reducing the household demand for heat, increasing the range of clean heating options that are viable, and making all forms of heating more effective in warming the house to adequate levels. Insulation helps reduce the conflict between air quality and cold homes objectives.

Insulation is a means to achieve healthy homes and clean air, not an end in itself

There are limits to the effectiveness of insulation as a sole solution. Because there are diminishing returns to insulation investment, and because insulation investment is not the only route to the outcomes being sought, there will be 'optimum' insulation levels for Warm Homes outcomes as part of an integrated package of measures.

The requirement for insulation to be part of the total package of ECan's Clean Heat measures has met with some resistance from householders, who have regarded it as an added cost burden with little benefit. While this mainly shows a lack of understanding of the benefits of the investment (also, until an HERS is actively promoted in the marketplace, insulation investment is often 'invisible'), in some cases this might be true, as where the additional insulation simply tops up existing insulation and provides minimal energy saving.

'Clean' wood-fuel burning needs to be part of the solution

Patterns of home heating, especially those related to solid-fuel burning, are often strongly entrenched. Solid-fuel heating has a number of strong drivers, including historical habit, perceptions of comfort, ready access to cheap sources of wood supply, ability to heat larger areas of the house, cost considerations, heating of hot water as well, and a reluctance to depend on electricity (especially in parts of the country that can count on extended outages several times a year).

Accommodating clean wood burning as part of the solution, as much as possible, offers benefits of low cost and readily available sources of supply, avoidance of higher electricity system winter loads, and the security associated with retention of diverse energy sources.

One of the issues that has not really been faced by current clean air programmes, but which will likely be a central focus of a Warm Homes programme, is the phase-out of large numbers of old polluting wood burners. Arguably this may be where some of the biggest challenges associated with programme participation will lie, because wood burner replacements may not be so amenable to other options - apart from replacement by another burner (ie, for reasons of high energy output, access to cheap or self-collected wood supplies, house may already have insulation, etc).

However, the challenge may lend itself to some innovative approaches, such as:

• promoting the benefits of pellet fires as an option (stressing flame effect, low running costs, low pollution and high heat output, with controllability and high efficiency)
• developing messages that don't victimise the solid-fuel burner, but instead encourage a positive attitude to change
• an incentivised appliance exchange concept - "out with the old, in with the new" etc., which might achieve a relatively high rate of clean appliance investment.

Of course this will all need to be done within the context of achieving the air quality outcome in that community, bearing in mind the number of solid-fuel burners that will be able to be sustained within the air shed. At the very least, clean wood burning needs to be part of a longer-term transition. The extent to which it continues in the long term will probably be different in different parts of the country.

Incentivising increased electricity load

Current Clean Heat-type programmes are resulting in a large proportion of participants taking up electrical heating (through heat pumps). Even although the appliances are highly efficient, they appear to be adding load to the system at peak times. [Community Energy Action, op. cit.] It is unclear at this stage whether overall this represents a significant cost that will end up being borne by electricity users.

4.9 Monitoring and programme evaluation

Re-orientate monitoring towards outcome evaluation

Subsidised home energy efficiency programmes have been running for almost 10 years in New Zealand, and while there has been a lot of publicity over achievement (numbers of homes insulated, personal stories of benefits, etc.), until recently there has been very little actual outcome monitoring of warmth and achievement of healthy indoor living conditions. The monitoring and surveys that have been done have tended to focus on output achievement (eg, numbers of houses retrofitted, theoretical kWh savings from efficiency measures), or have been market-type surveys addressing issues around programme participation. [See C Lamb, Christchurch Household Survey: A survey of Christchurch residents' opinions of proposed air pollution control methods and clean air incentives and assistance, Report No R02/27, Environment Canterbury, Christchurch, 2002.] Although it is important that this form of monitoring continue, if Warm Homes outcomes are to be achieved then the type of monitoring undertaken should reflect this re-orientation.

The Wellington School of Medicine Healthy Homes project has now provided a short-term body of knowledge related to the health effects of a warmer, drier indoor environment resulting from insulation retrofitting. [See:http://www.wnmeds.ac.nz/academic/dph/research/housing/insulation.htm] Some other forms of outcome evaluation are now taking place, such as the Community Energy Action survey of houses retrofitted with insulation and heat pumps. [This initial survey has now been extended longitudinally, with data collection for the second winter, and further attitude/behaviour questions added.]

More extensive monitoring of programmes will enable the outcomes achieved to be judged against the proposed Warm Homes standard, and will enable ongoing programme improvements to occur from a base of knowledge and understanding. The monitoring can also serve as an excellent information base for case studies, publicity and promotion, etc. In this way the monitoring can be used as an active tool to promote wider participation in the community.

Develop methods of outcome monitoring that can be achieved at low cost

Some forms of outcome monitoring can be very expensive, involving data logging of indoor temperatures, appliance use, etc. To provide the required level of monitoring at a reasonable cost, the consultants suggest that a monitoring process be established that brings together a number of monitoring tools into a package that can be readily applied during and after programme implementation. The tools might include simple before-and-after checklists of measures installed, some quantitative temperature monitoring in individual houses, perception attitude and behaviour surveys of participants, as well as setting up a few houses where longitudinal studies might be carried out.

A number of current programmes offer good opportunities for developing this toolbox approach. For instance, the Canterbury Elderly Persons project would be appropriate because it has set out with an outcome focus, and hence mirrors the orientation suggested for the Warm Homes programme.