Energy Hardship is a Thing, MBIE Report Shows. (Yes, we already knew that).
Published 30 June 2023
Energy hardship is a thing, MBIE report shows. (Yes, we already knew that.)
By Georgie Ferrari, Chief Executive, Sustainability Trust
Recent research from the Ministry of Business and Innovation and Employment shows that 110,000 households could not afford to keep their homes adequately warm for the year ending June 2022, with Māori and Pacific households, renters and low-income households more likely to experience energy hardship.
The report on Energy Hardship Measures by MBIE compares data across 10 years from 1 July 2012 to 30 June 2022 and draws on MBIE’s recently released list of 5 measures of ‘energy hardship’ and its earlier released definition. Developing a definition of energy hardship and ways in which it can be measured were recommendations to government by the independent Electricity Price Review, which Sustainability Trust contributed to.
The measures of energy hardship include:
putting up with feeling cold a lot to keep costs down
a major problem with dampness or mould
not being able to pay utilities bills on time more than once.
Sustainability Trust visits thousands of homes in the Wellington region every year. We see significant mould and dampness in homes daily. We speak to people who suffer through cold winters rather than risk high electricity bills by putting a heater on, and we speak to hundreds of families who have been threatened with power disconnection notices through their inability to pay their rising bills.
MBIE noted that “Overall, about 4% to 6% of households reported experiencing at least one of the 5 energy hardship measures. However, the proportion of households that experience each of these measures rises considerably for Māori and Pacific households, renters, and for crowded households,” Daniel Griffiths, from MBIE said.
The most recent data also showed about 110,000 households could not afford to keep their homes adequately warm.
Concerningly, 10.2% of all Māori households reported not being able to afford to heat their homes. The same measure is 14.4% of all Pacific households, compared to 5.8% for the total population. Notably, 12.2% of renters reported not being able to afford to heat their homes, compared to 2.5% of owner-occupiers. Households that were crowded or relied on a low-income were also more likely struggle to heat their homes.
Data also showed 74,000 households said damp or mould was a major problem. Dampness and mould are indicators of poor housing quality. Damp homes require more energy to heat, which puts further financial pressure on households.
In addition, we know from our home visits that low-income households often have heating appliances that suck power making them more expensive to run than something like an energy efficient heat pump. It’s a double blow when you have a home that is cold and damp, costing extra to heat and then an appliance that is more costly to run. Low-income homes just can’t get ahead!
MBIE make the point that energy hardship can harm households in various ways. If people are unable to properly heat their homes, or they’re living in damp and draughty conditions, it can have a detrimental effect on their mental and physical health.
Sustainability Trust runs several programmes that addresses energy hardship and home energy efficiency. We’ve been part of the EECA Warmer Kiwi Homes programme for close to 20 years. Warmer Kiwi Homes provides generous subsidies of up to 80% for eligible households to install insulation and heat pumps into their owner-occupied homes. See if you’re eligible here. In some parts of the region we partner with other funders to top the subsidy up to 90 or 100% of cost. That could mean you can have a new heat pump installed for as little as $200 or sometimes even free of charge!
We also run the Well Homes and Warm Fuzzies programmes where we can come to the home of any low-income family in the Wellington region. Our trained assessors will work with the family to ensure the house (can be owned or a rental) is performing as it should to ensure everyone is warm and dry. This programme can also provide interventions to make the house healthier for everyone. These can include draught stopping kits, heaters and in some instances bedding and curtains, all free of charge.
If you’re a Wellington city resident you’re probably eligible for a Home Energy Saver assessment, funded by Wellington City Council and delivered by Sustainability Trust. The Home Energy Saver is a comprehensive assessment of the performance of your home from heating, hot water, lighting, draughts, switching from gas to electricity and even EVs! At the end of the consultation, you’ll get a complete report on your home and how you can save energy and money! Click here if you want to book.
Did you know that it is not a requirement by law to provide curtains in rental properties in Aotearoa? The Wellington Curtain Bank has been providing free, upcycled quality lined curtains to low-income families in the region for 12 years. Our curtains come from donated fabric that would have been otherwise put into landfill. Curtains will be made to measure and will be full length for extra insulation. Research from Otago University indicates that with good quality curtains and adequate draught stopping a room’s temperature can increase by 1.4 degrees, so curtains work!
It's not a surprise to us that the MBIE research finds that renters are between 4 and 6 times more likely to report experiencing measures of energy hardship. Thankfully the government introduced the Healthy Homes Standards for rental properties in 2019. Since then Sustainability Trust has conducted thousands of health homes standards assessments for landlords wanting to get their rental properties to comply. There are some deadlines for compliance coming up in 2025, however these final deadlines can be a cause for confusion. If you’ve recently signed or renewed a private rental tenancy, you may already have less than 120 days to meet the Standards. If you need an assessment done get in touch with us today.
Sustainability Trust has been worried about energy hardship for many years. Last year we did something about it. We launched New Zealand’s only not for profit electricity retailer, Toast Electric! Toast Electric has one ambitious aim; to eradicate energy hardship in Aotearoa New Zealand! For every six regular customers Toast has we can support one low-income household with their winter energy costs, halving their bills in the winter months. We also provide energy wellbeing customers with a home energy check. This includes draught stopping, window kits to insulate from the cold, providing lined curtains for insulation, turning down hot water cylinder thermostats, replacing lightbulbs with energy efficient ones and referring to other services to help with free minor repairs to the home.
Sustainability Trust welcomes MBIE’s report into energy hardship. It’s great to see government focusing on an issue that we’ve been advocating on for close to 20 years.
The good news is that MBIE will continue to release data and insights every year going forward to provide a snapshot of energy hardship levels nationally and amongst key demographic groups. “This will provide insight into the effectiveness of existing polices or intervention programmes, and help new initiatives target those who those most in need,” Daniel Griffiths from MBIE said.
The Report on Energy Hardship Measures draws on data from Stats NZ’s Household Economic Survey. It can be found here.