Don't count on that energy saving ...

Retrofitted insulation makes your house warmer, but don't count on that saving.
Retrofitted insulation makes your house warmer, but don't count on that saving.

If you're planning to recoup through energy savings the several thousand dollars you have just spent, or are planning to spend insulating your home, then don't. At least, not any time soon.

The Energy Efficiency and Conservation Authority (EECA) claims installing ceiling installation alone will save homeowners in colder regions up to $400 a year. That's 16% of a monthly $200 power bill, and a saving not be sneezed at. Add underfloor insulation and you save even more, enthuses the EECA website.

But studies which have been done on thermal insulation retrofits tell a different story. One such study by the Department of Statistics, admittedly done some years ago now, found energy use in an insulated group of houses was actually higher than in a group of uninsulated houses.

More recent work done for research consortium Beacon Pathways found Papakowhai, Wellington, homes had unchanged energy use during 2006-08 after being fitted with basic ceiling and floor insulation as part of a study.

"If you're thinking payback [in terms of lower energy use and cost], then think long," says general manager Nick Collins. A cost-benefit analysis done by Beacon Pathways of simple payback in terms of energy savings only for the measures attracting government subsidy showed that:

Thick underfloor insulation payback time was 22.8 years, dropping to 19.3 years for a more thermal-resistant insulation material.

Ceiling insulation payback time was 10 years for the minimum grade required by the Building Code (R2.8 in industry parlance), and 12.9 years for higher quality R3.8 insulation.

Hot water system insulation paybacks are 4.1 years for instant gas, 12.9 years for heat pump hot water and 13.1 years for solar hot water systems.

Not available for government subsidy under the recently announced scheme are double-glazing of windows, with a payback time of 48.8 years where the glass and frames are replaced, and 12.1 years if just the glass is replaced. Double-glazing of windows is estimated to cost an average home-owner between $8000 and $10,000.

Wall insulation, again, is a very expensive operation. Payback time, 48.8 years, where interior linings are removed and replaced.

A 10-year study by Building Research Association of New Zealand (Branz) reviewed local experience of before and after insulation refits on 400 homes. There were small temperature increases of 0.6-1.0% after retrofit and small or zero energy savings.

The study found savings in total energy (all fuels) of perhaps 5% were feasible, but most savings would come in non-electric fuels. Electricity savings could be about 1%. The study concluded: "We cannot expect to get large energy savings from insulation retrofit of houses in New Zealand."

What's happening and likely to happen as the rush to insulate gathers momentum is people in cold homes suddenly find they have warm(er) homes and they like it. "So instead of taking savings by using less energy and having lower power bills, they're taking the comfort instead," says Branz scientist Nigel Isaacs.

It's what researchers call "takeback", and it seems likely many Kiwis will register a 100% takeback from the insulation retrofit.

That's comforting news for power companies chafing under the government directive that they not raise power prices while a review of the electricity market is under way. The consumer rush to heat pumps 110,000 were sold last year has certainly been good news for power companies. Heat pumps might be an efficient way of heating homes, but many people have seen power bills blow out not decrease since they installed them.

Every new heat pump installed has been another brick in a new power station, says Isaacs. Like filling a bath tub with hot water, but forgetting to put the plug in. Heat pumps are making our homes warmer and bring many health and other spinoffs. Retrofitted insulation would ensure the benefits of heat pumps were not dissipated.

Beacon Pathways estimates the temperature rise in retrofitted houses means a health saving of $215 a year.

Collins says providing warmer, drier homes for families and children is more important than energy savings. "Turn the argument on its head and you realise that one night spent in hospital is about the cost of installing ceiling and underfloor insulation in a home, and then you've got to ask where we are better spending our time and money."

This is the nature of the "compelling evidence" that has led the government to initiate a $323 million insulation and heating subsidy scheme that has been running red hot. More than 7000 homes were insulated or fitted with clean heat in the first two months.

The aim is to retrofit 27,500 homes in the first year and 180,000 homes over four years. But even that will only scratch the surface. It's estimated about one million of the 1.6m Kiwi homes are not adequately insulated.

Some form of insulation in new houses was made mandatory only in 1978, and since then the building code has been slowly upping the ante.

But even by 2000 things were not that good, says EECA chief executive Mike Underhill. Which is why the $1300 government retrofit subsidy is for houses built before then.

For too long, says Underhill, we have considered our climate temperate, even sub-tropical, and failed to accept while we don't have extremes experienced elsewhere, we still have a cold and usually very damp winter.

"The reason we have a high mortality rate in winter, and why we have the highest incidence of respiratory illnesses among OECD countries, goes back to the kind of houses we have," he says. Danes use about 15kw/h square metre heating their houses, while Kiwis use about 80kw/h per square metre. "Their houses are designed for the cold with triple-glazing on the windows," says Underhill. "We are very slow off the mark."

Research by both Branz and Beacon Pathways provides some useful insights. Understandably, the cost-benefit (interpreting "benefit" in the wider sense) of installing good ceiling and underfloor insulation when none previously existed increases as you travel south to Invercargill. The same is true of topping up ceiling insulation. The cost-benefit of a top-up in Auckland is marginal true of 1920s' villas and of houses built since the late 1970s.

Isaacs's research shows no relationship between how much income comes into a home, and how warm it is. "The rich, it seems, are just as cold and miserable as the poor," he says. So no surprise to him that the well-to-do are taking as much advantage of the government's subsidy offer as the less well off.

Sunday Star Times