10. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister of Energy
Has the Green Party initiative “Switch on the Sunshine” announced last November been successful in the goal to double the number of solar water heating systems being installed?
Hon DAVID PARKER (Minister of Energy) Link to this
The solar water heating initiative has been successful in establishing quality systems for solar hot water systems, ensuring energy savings are known, and starting new training courses for installers at polytechnics throughout the country. Obviously, as the new incentive programme began in May we have not doubled installations from when we started, but those installations are at over 400 percent of where they were at the end of the member’s time in Government.
Hon Dr Nick Smith Link to this
How does the Minister explain the fact that the industry grew by 23 percent in 2002, by 58 percent in 2003, by 41 percent in 2004, by 37 percent in 2005, and by 26 percent last year but that after the Greens announced the “Switch on the Sunshine” initiative, installations, far from doubling, have actually dropped by 5 percent?
I think I addressed that in the previous question. I note that during May installations increased by about 10 percent—and, obviously, it will go up and down from month to month. I also note that Dr Smith’s reported solution is to cut the cost effectiveness criterion, which ensures we subsidise only those systems that repay their cost from electricity systems within 20 years. It is that sort of economic illiteracy that shows the difference between this Government and his proposals.
Hon Dr Nick Smith Link to this
Does the Minister agree with the Government spokesperson on energy efficiency that: “I don’t want consumers being conned into buying solar heating if it isn’t cost-efficient for them.”; if so, what sort of nanny State is it when the Government, rather than consumers, is left to decide what is cost effective; and what would this carbon-neutral Government view as a con for people wanting to invest in solar technologies for the altruistic reason of wanting to reduce their carbon footprint?
I would tell the member to stop digging, actually, because the cost-effectiveness threshold is designed to subsidise only those units that are cost effective. If they do not repay themselves in 20 years out of electricity systems, they should not be subsidised. People are still free to buy them if they want to buy a system that is not cost-effective, but I am certainly not recommending—and neither would the Government spokesperson recommend—that we subsidise those ones.
Jeanette Fitzsimons Link to this
Is the Minister aware of any solar suppliers who believe that they can sell at prices that are cost-effective for consumers?
Indeed, I am. I think that one of the very good aspects of this project, which has been designed in great part by the member who just asked the question, Jeanette Fitzsimons, is that we now, for the first time, have comparable data as to the comparable cost-effectiveness of different systems.
Hon Dr Nick Smith Link to this
How does the Minister reconcile his statement to Parliament on 23 November last year that the policy was a very significant advance and was well designed when the Chief Executive of the Energy Efficiency and Conservation Authority, Mike Underhill, has stated that since the scheme was launched in May, after its announcement in November, not one single grant has been made; and if this is a well-designed policy, would he like to tell us what a badly designed policy might look like?
I am informed by the Government spokesperson on this issue that amongst the applications that have been made for funding have been applications by organisations that are bulk-builders of houses, and that one such application alone represents a proposal to fit solar hot water devices to 1,200 new houses. I think that is an illustration that this policy is going to work and is succeeding.
Peter BrownNoting those answers, will the Minister confirm that some household solar panels are experiencing corrosion, and that many have been installed without the necessary building consent; and as these problems are creating additional costs for homeowners, will he advise—if he aware of it—just how deep the problem is; and can he confirm that the Green’s spokesperson on this is aware of the issue and has dismissed the allegations as non-events?
No, I cannot confirm that the spokesperson has dismissed those concerns. She has raised concerns with me in relation to the various quality aspects of some installations, and that is why the programme includes criteria to ensure that only effective, efficient, well-priced systems are subsidised and that other systems are not.
Hon Dr Nick Smith Link to this
Does this policy suffer not from the same flaw as the Government’s so-called 20 free hours early childhood policy in that the Government is imposing price restrictions and regulations nationwide when it should leave the issue of prices to consumers and to a competitive market; and if he is so convinced that this policy will work, given that it has resulted in a drop in the number of installations, will he commit to a date as to when it will achieve a doubling of installations of solar water systems?
Madam SPEAKERI say to the member who asked the question that that suggestion is just daft. If there are inappropriate systems that do not repay their cost to those people who purchase them within 20 years, they ought not to get a Government subsidy. There is no prohibition on people who want to purchase inferior systems from doing so. They are free to do so, but this Government will not subsidise them to do so.
Jeanette Fitzsimons Link to this
Would the Minister agree that one of the primary considerations for a well-functioning market is for consumers to know what they are buying and to have accurate information; that they have never had the information about the energy savings of particular solar water heaters until the performance-testing system that is being developed under this scheme; that there has never been a training scheme for installers in New Zealand until this scheme began; and that its success is shown by the huge enthusiasm for the Volume Build Scheme, where we have already signed off grants for the first 20 houses only a month after launching it and when it is rumoured that there are another 1,300 coming up in the system?
Yes, I can. I would also add that the answer to all things does not lie in subsidies. In fact, one of the most effective parts of this scheme is to ensure the reliability of systems, their cost-effectiveness, and to give confidence in the industry.
Hon Dr Nick Smith Link to this
I seek the leave of the House to table the data from the New Zealand Solar Industry Association showing the first ever drop in the number of solar water heater installations.
Hon Dr Nick Smith Link to this
I seek the leave of the House to table the international data that shows that in terms of solar water heating installations per 1,000 people, New Zealand is running at one thirty-third of the rate—
I seek leave to table two documents. The first is the industry figures showing a 400 percent increase since 2001, and an increase in May this year.