Saturday, February 16, 2008


Back in 2006, the Greens secured a major policy coup of $15.5 million in funding to increase the use of solar water heating in New Zealand. A central component of this was the provision of $500 grants for homeowners installing a new solar water heating system. In its first year (2007), EECA expected to hand out 500 such grants. In fact, they handed out none [audio]. To call this embarassing is an understatement.

Exploring the reasons for this outright failure of policy, it seems the weak point in the chain is the installers, who simply have no incentive whatsoever to fill out paperwork to help their customers get a grant (some of them also seem to be unwilling to fill out the paperwork required to get resource consent for an installation, instead pocketing the cash and lying to their customers, but that particular small business dishonesty is a seperate issue). Which suggests that the point of application needs to be moved to the end customer rather than the installer. Upping the level of the grant, which is small compared to the total cost of installation, would help as well (and really, a quarter of a million dollars a year is chump change for the government). And of course letting people know about it would help as well; I'm aware of these grants because I pay attention to such things, but I doubt many other people are.

Overall, the rest of the policy seems to be in good shape. EECA has done a lot to reduce consent costs, train plumbers to do installations, and make it easier to install these things. But if they're going to rely on financial incentives to increase installations, then they clearly need to make it a lot easier for people to take them up.