Solar Water Heating Programme Outline

The Government has agreed to a five and a half year solar water heating programme, starting now, and is investing $15.5 million for the first three and a half years on top of existing EECA funding. Funding levels for the final two years will be decided after a review in 2009.

The proposed programme will increase demand through information, demon­stration and promotional programmes, and direct financial incentives. This will be supported by measures to strengthen the industry's ability to respond to increased demand by delivering quality, cost-effective installations. The programme includes:

• Providing independent information to help consumers decide whether solar is suitable for them, and what kind of system they need;
  
• Motivating demand through promotion;
  
• Improving quality and cost effectiveness by working with industry including setting standards and encouraging training opportunities;
  
• Providing financial assistance to home owners;
  
• Putting more solar water heating systems into Government buildings; and
  
• Encouraging new ideas through an Innovation Fund.
  

This overview of the programme refers only to the first three and a half years, although it is likely that many of these activities would be continued into the final two years.

The core programme

The core programme enhances EECA's existing information provision, adds a new promotional campaign, and continues and enhances EECA's existing quality assurance and capability building activities, which are essential to support and strengthen the solar water heating industry to respond to increased demand. Key elements are:

• Enhanced objective information provision through upgrading the existing website and 0800 service to support informed decision-making;
  
• Promotion to raise awareness of government support and motivate consumers to access information through the website and/or 0800 service;
  
• Education and training of the industry (including architects and builders) about best practice and standards;
  
• Monitoring and auditing of training providers and the installation industry to ensure standards continue to be met;
  
• Short term assistance with training costs by paying approximately half the fee for approved solar water heating installation courses in the first half of 2007;
  
• Developing case studies and monitoring the performance of selected installations to support the commercial and government sectors’ decision-making.
  The government sector

The aim of the government sector programme is to demonstrate leadership by installing solar water heaters, including larger scale systems, in its own buildings. The programme will provide funding for feasibility studies, direct grants, and assistance with tender processes. Benefits will be demonstrated to other agencies, commercial operators and the public.

At least 12 potential projects have been identified across district health boards, the New Zealand Defence Force, Ministry of Agriculture and Forestry, Department of Corrections, Housing New Zealand Corporation, Child, Youth and Family and local authorities.

The first installation to go ahead will be at Auckland District Health Board's Greenlane Clinical Centre.

This element ties closely to the Govt3 programme led by the Ministry for the Environment, which also requires departments to accelerate the adoption of sustainable building practices and energy efficiency measures.

The residential sector

Solar water heating is most cost effective where capital costs are low and the operating costs of hot water usage are high.

The potential solar water heating residential market is large, so in order to maximise cost effectiveness the programme will target households of four or more people. The programme will deliver information to home­owners and developers to enable them to determine if solar water heating is suitable for them, and if so, what type of system is most appropriate.

Existing houses and new one-off houses

To retrofit an existing house or install a system on a new one-off or custom-built house, a homeowner will be able to apply for finance assistance.
The finance assistance available from the Government for purchasing solar water heating systems will increase from $300 to $500 from February 2007. This is provided in the form of a contribution to the cost of interest on a loan.
Access to the increased finance assistance will be subject to systems meeting criteria on energy performance and cost effectiveness.

Volume-built new houses

For volume-built new houses (major projects involving multiple houses built “on spec”) the builder or developer will be eligible to apply for assistance from May 2007. Details are still being finalised. This will encourage volume builders to make solar water heating a standard feature on all suitable homes.

Innovation Fund

The aim of the contestable Innovation Fund is to provide support for projects not otherwise eligible for grants and loans. Strong weighting would be given to proposals that will result in the installation of a large number of systems, or can otherwise demonstrate significant impact on increasing the uptake of solar water heating.

Examples of possible projects could be demonstration projects with commercial applications, multiple dwelling building installations, lease to buy schemes or new technologies.

Heat pumps for water heating

Heat pumps for water heating compete with solar water heating systems and in certain applications are more cost effective. There are currently a small number of domestic heat pump water heating systems available in New Zealand. The heat pump water heating industry will be eligible to compete for support through the contestable Innovation Fund upon meeting appropriate criteria. When the SWH scheme is reviewed decisions will be made about whether the heat pump water heaters should participate in any other aspects of the programme.