30 October 2007 Media Statement

New homes will now be warmer and cheaper to run

The most significant improvements to the energy efficiency of new homes in 30 years come into effect from tomorrow, meaning warmer, dryer and healthier homes, says the Building and Construction Minister Clayton Cosgrove.

As well as increasing ceiling and wall insulation minimum requirements for all new homes and major extensions to existing houses, the new energy efficiency measures will mean most new homes are double glazed.

“New homes in the South Island and Central Plateau of the North Island are the first to meet the new requirements. From tomorrow (31 October 2007), all new homes and major extensions across these colder parts of the country will need to comply with the new provisions of the Building Code to gain code compliance from local authorities. The new provisions mean they will have to be built to use 30 percent less energy than was previously necessary to stay comfortably warm,” said Mr Cosgrove.

New homes in the rest of the North Island south of Auckland will need to meet the new requirements from July 2008 and from Auckland north from October 2008. “These reforms will see New Zealanders living in good quality homes that are warmer, drier, healthier and cheaper to run. This will deliver a triple win for our health, our environment and lower gas and electricity bills,” said Mr Cosgrove.

The insulation changes, including use of double glazing in most new homes, are part of the biggest improvement to energy efficiency in buildings since the late 1970s.

“While this will add modest costs to new homes ($3,000 to $5,000 approximately), these will be recouped through lower gas and electricity bills in three to seven years. The benefits continue long after that investment has been repaid, with projected annual savings for households of between $1,800 (Dunedin) and $760 (Auckland).

“Those building new homes will also be boosting the capital value of their home and increasing its appeal to prospective purchasers or renters,” said Mr Cosgrove.

Mr Cosgrove said having more energy efficient homes will help achieve sustainability by reducing the demand for non-renewable electricity generation.

The government is also introducing changes which make it easier to get a building consent for solar heating systems and will require more energy-efficient lighting and heating/ventilation systems in commercial buildings.

Mr Cosgrove today also released Your Guide to $marter Insulation, a free booklet from the Department of Building and Housing, which outlines the new insulation requirements and other energy-saving initiatives. Copies can be obtained by ringing the Department on 0800 242 243.

Media contact: Robyn Cubie, Press Secretary for Hon Clayton Cosgrove, MP
Minister for Building and Construction, 04 471 9136 or 021 227 9136
Background Information

What is being announced today?
The Building Code sets minimum performance standards for new homes and renovations. From tomorrow (31 October 2007), new minimum insulation requirements for new homes and major extensions to existing homes come into effect in the South Island and Central Plateau of the North Island. The new requirements take effect in the rest of the North Island south of Auckland from July 2008 and for Auckland north from October next year.
These new minimums, which will mean double glazing is used in most new homes, will result in 30 percent less energy being required to keep homes comfortably warm. This will result in lower electricity and gas bills and improved health. The new requirements will also help meet New Zealand’s commitments on climate change by reducing the need for electricity, a third of which is generated burning coal, oil and gas, creating greenhouse gases.

When do these changes actually take effect?
Any building consent issued from tomorrow onwards in the South Island and Central Plateau of the North Island will need to include the new minimum requirements for insulation. If someone in either of those two parts of the country has an existing building consent for an as yet uncompleted house, there is no requirement to meet the new standards but it would certainly be in their best interests.

What are the costs and payback periods for the extra insulation requirements in new homes?

Location Average cost of constructing a medium-sized house now Average additional cost of construction after the changes Annual saving in energy bills Return period on investment (in years)
Auckland $254,000 +$3,000 to $5,000 $760 7
Wellington $253,000 +$3,000 to $5,000 $940 6
Christchurch $251,000 +$3,000 to $5,000 $1,340 4
Dunedin $250,000 +$3,000 to $5,000 $1,800 3

What is the basis of these calculations?
These figures are based on a cost benefit analysis done by BRANZ in October 2006. They assume the entire house is heated to 16°C all day, and the living areas are heated to 20°C in the morning and evening. These are the temperatures recommended by the World Health Organisation. The costs are based on the prices people pay for energy. Data was used from the Household Energy End-Use Project.
It found that new homes, which tend to be more open plan and with more living space, are kept warmer than older, less energy efficient houses.

What is the current situation regarding insulation in New Zealand homes?
Since 1977 all new homes have been required to have a minimum level of insulation. From 31 October 2007 onwards, those minimums for walls and ceilings are being increased. For the first time, glazing (windows and glass doors) are also included.
The BRANZ 2005 House Condition Survey indicates that around 375,000 New Zealand homes still have inadequate ceiling insulation and over one million homes have inadequate under-floor insulation.

Does insulation really make a difference to power bills?
Yes. Insulating your ceiling is the single best thing that can be done to make a home warmer and cheaper to run. About a third of your heat escapes through the ceiling. The new insulation requirements further increase the minimum insulation that has been required in ceilings and walls for the last thirty years.

What about under-floor insulation?
The new requirements do not change the amount of insulation required from flooring systems. This is because you get better improvements for dollars spent in boosting the energy-efficiency of ceilings, walls and windows.
Anyone contemplating building work on an existing home, particularly putting foil insulation under the floor-boards, should be aware of the danger of nailing or stapling into electrical cables. People are recommended to engage a qualified professional.
The location of electric wires should be established and existing under-floor foil installations should be tested by a registered electrician or electrical inspector to ensure they are not ‘live.’

Does insulation offer real health benefits?
Yes there are significant benefits. Studies by University of Otago researcher Professor Philippa Howden-Chapman have shown that putting retrofitted insulation in the cold uninsulated homes of people suffering from respiratory illnesses, such as the flu or asthma, was effective in improving their health, and reducing the number of days they took off work and school. In retrofitted homes, visits to the doctor by family members dropped by 19 percent, admissions to hospital due to respiratory conditions dropped by 43 percent, days off school reduced by 23 percent and days off work by 39 percent.
Professor Howden-Chapman has welcomed the new minimum insulation standards as a timely addition towards making New Zealand homes warmer, healthier and better at conserving energy. (see www.otago.ac.nz – Latest Releases)

What is the environmental benefit of having more energy efficient homes when most of our energy comes from hydro power?
About a third of our electricity is generated by burning gas, coal and oil – usually to meet peak winter demand. This thermal generation creates greenhouse gases that contribute to global warming. So, every dollar saved on your power bill helps protect our planet from climate change.

How does today’s announcement fit into the government’s wider energy strategy?
The just released New Zealand Energy Efficiency and Conservation Strategy is a wide reaching action plan. It includes many programmes to improve the quality of new and existing homes.

What is the government doing to improve the quality of existing homes?
There are a range of government incentives available to encourage home-owners and landlords to make their existing houses more energy efficient, warm and healthy to live in. These include subsidised insulation for an additional 65,000 low income families in older houses by 2012 bringing the total to 100,000 properties by that time. This programme includes 800 heating retrofits annually.
An interest free loans programme to cover upgrades for a further 70,000 homes by 2015 is now being worked on now.
The Government has also recently introduced a scheme to make it easier for landlords to have their rental properties insulated if they are occupied by low-income tenants, offering a subsidy of up to 55% on this cost.

What is being done to improve the quality of state houses?
Since 2001 Housing New Zealand Corporation has completed retrofits in more than 15,000 properties at a cost of $23.6 million. Retrofits include ceiling and under-floor insulation, hot water cylinder wraps and pipe lagging, draught stopping and improved ventilation. HNZC is currently achieving 2,000 to 2,500 retrofits per year. And a further 6,645 retrofits are planned over the next three years.

Is there a way to measure energy-efficiency in homes?
In the coming months the government will introduce a home energy rating scheme. This is designed to provide professional advice to help homeowners and buyers make more informed choices about the energy efficiency of homes.

What about solar power?
Hot water accounts for about a third of household power bills, so using the sun’s rays to heat water can make real sense. A solar water heating system can generate up to 75 percent of peoples’ annual hot water needs in summer and perhaps a third in winter. The payback periods for a solar system depend on a number of factors including:
• the amount of sun your roof gets
• the amount of hot water your family uses
• whether you are currently facing the cost of replacing a traditional water heating system
• the type of solar system you install.

Are there incentives to put in a solar heating system?
Yes, the government provides funding of up to $500 towards a solar water heating system. To find out if you are eligible, see www.energywise.govt.nz/solar. A new Building Code compliance document is just being published for installing solar water heating, making it easier and cheaper to get a building consent to install a solar water heating system.

Where else can I get advice on energy efficiency?
There is a range of useful websites - www.smarterhomes.org.nz is a useful starting place. The website gives you the information you need when building a new home or making your current home more energy efficient. Or the new government sustainability portal – www.sustainability.govt.nz. And www.energywise.govt.nz is a good source of information on how to make smart energy decisions at home, work and on the road.
For more information on the new insulation requirements, go to www.dbh.govt.nz or request a copy of the booklet, Your Guide to $marter Insulation by calling 0800 242 243.

ENDS

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