Voluntary Targeted Rates

Schemes

Presented by:Richard Popenhagen – Nelson City CouncilFred Braxton_ Waitakere City Council

Voluntary Targeted Rates Schemes

• What are VTR schemes?

• Why do Councils do this?

• How do they work?

• Benefits

• Problems

• Examples of existing schemes

What are VTR schemes?

• Schemes that encourage homeowners to invest in energy efficient and sustainable initiatives.

• The aim is for a Council to be the facilitator, and to remove barriers that are normally associated with installing these types of systems.

What are VTR schemes?

• This is effectively a loan, but under the Rating Power Act, Council is providing a service (supply of insulation, solar water heating), the cost of which is progressively recovered from the property that benefits from the service (including the borrowing costs).

What are VTR schemes?

• The Council pays the upfront cost for the installation of the systems on residents homes, and they pay it back over a set period as a voluntary targeted rate on their property, while saving money on their energy and water bills, and health costs.

Why do it?• Councils strongly committed to sustainability.

• Living responsibly – with sustainability at the heart of everything we do.

• Shows innovation.

• Strengthening Region’s identity.

• Future-proofing our communities through building local resilience.

• Encouraging solid and sustainable economic development.

How VTR schemes work

• Council sets up and promotes scheme

• Client expresses interest and contacts Council

• Client provided with supplier contacts to obtain quotes

• Client gets quotes, selects supplier and signs an agreement

• Council approves loan

How VTR schemes work

• Supplier organises building consent, installation, inspection.

• Council inspects completed work & issues CCC.

• Council collects any subsidies (eg EECA) on behalf of client and deducts that from the loan balance.

How VTR schemes work

• Council sets up repayments for after 1 July.

• Council provides independent advice throughout and monitors performance of suppliers.

Benefits of VTR schemes

• Eliminates the need for an upfront investment.

• Pay it back as you make savings on your energy and water bills.

• Reduced per unit cost.

• Simplified selection and installation process from start to finish.

• Low hassle one stop shop.

Benefits of VTR schemes

• No hidden costs.

• Loan stays with the property.

• Reduced red tape/ free building consents.

• Part of making our communities more sustainable

• Part of wider Council promotion activities.

Benefits of VTR schemes

• Councils can provide financing at or below OCR to ratepayers through a voluntary targeted rate.

• Administration costs low using existing Council systems.

• Good news story for Council

Problems

• Concern over whether it is core Council business and the impact on the level of Council debt.

• It is important to keep at arms length from suppliers so the Council is not perceived to be ‘in bed’ with one in particular.

Problems

• Don’t build unrealistic expectations.

• When providing finance need to comply with Commerce Commission requirements.

• Don’t apply GST twice.

• Need to manage budgets.

• Alert future owners.

Examples of existing schemes

• NCC - Clean Heat Warm Homes

• NCC – Solar Saver

• WCC – Retrofit the City

• ECAN – Clean Heat

• TDC – Warm Tasman

• Greater Wellington – insulation and heating

• ESOU – Warm up Southland

Comparison of Nelson and Waitakere schemes• Households involved:

–Nelson: Clean Heat Warm Homes

–2007 to 2009 1267 homes upgraded, project another 1316 (2010 to 2012)

–Solar Saver 12/09 to 6/10 113 + 23 systems, to date 168 + 26

–Budget for up to 1500 over 3 years

–Waitakere: 9/10 to 6/11 goal is 200, 100 applications to date

Comparison of Nelson and Waitakere schemes• Scope:

– Nelson: insulation and clean heating, solar waterheating

– Waitakere: insulation and clean heat, solar and heatpump waterheating, water efficient outlets, raintanks, double glazing, heat transfer systems, kitchen and bathroom extraction, solar tubes

• Methodology:

– Waitakere: home assessment based on Beacon tool done by trained building inspectors > retrofit plan > discussion

Solar Saver Video

Questions

Further information

• Home Heating Incentives Workshop

23 September

NIWA, Greta Point

Wellington

Contacts• Nelson:

Richard Frizzell, Policy Planner (03) 546 0423

richard.frizzell@ncc.govt.nz

Richard Popenhagen, Eco Building Design Advisor (03) 546 0151

richard.popenhagen@ncc.govt.nz

• Waitakere:

Michelle Dawson, project manager, (09) 836-8000

ext 8539, michelle.dawson@waitakere.govt.nz

Fred Braxton, Eco Design Advisor, (021) 542-761,

fred.braxton@waitakere.govt.nz