The announcement
Prepared statements from the Prime Minister and two ministers.
[…] Future Energy for hosting us here at their place today. It's great to be here with the Minister for Energy, Simeon Brown, and also the Minister for Local Government, Simon Watts. A few weeks ago I talked about how in a more volatile and uncertain world it's really important that we can control what we can control.
And of course what we can control and we need to focus on is building a much stronger, more resilient, more secure New Zealand to withstand that global geopolitical volatility. A big part, of course, of achieving greater national security is building our energy resilience and independence. But here's the thing about resilience.
It's not only built in Wellington or through our big infrastructure projects, which as important as they are, real resilience is actually built in thousands of homes, on thousands of rooftops, by thousands of Kiwis taking back a measure of control over their own lives. A stronger, more resilient energy system means giving Kiwis access to a more diverse and reliable mix of power when weather events or global shocks put pressure on supply. And of course, more resilience and choice also helps make our power bills much more affordable.
Through our Electrify New Zealand agenda, National has delivered widespread regulatory reform that is driving a record amount of investment in renewables. Consequently, we've been able to build out more renewables in the last two years than the previous eight years. That growth in renewables is also backed by a strategic coal and diesel reserves and the prospect of LNG to keep the lights on in dry years, and they are absolutely critical investments to lowering the dry year risk and the risk premium that is reflected in all of our power bills.
While renewable energy projects are taking off across New Zealand, the uptake of residential solar, battery storage, and on-farm generation remains low. And to give you a feel for it, just 3% of Kiwi households have installed solar in their homes. In the US, it's around about 9%, and in places like the Netherlands and Australia, it's one in three households.
National has a plan to change that, and today we're announcing that if re-elected, National will introduce a new package to build on the success of Electrify NZ and support a greater uptake of residential solar and home batteries. There are two key components to our plan today that we're announcing. Firstly, we're gonna tackle the single biggest barrier of all, which of course is the upfront cost.
The cost of installing solar and batteries remains out of reach for too many families, and the green loans that are on offer from the banks are limited and patchy. So a re-elected National Government will establish the Home Energy Fund, which has been long called for by local government New Zealand, and some outstanding work done by Mike and his team at Rewiring AotearoaRW. And what that is is to let homeowners and property owners finance energy upgrades with no large upfront costs, repay it over time through their rates, and as they save on their power bills.
It's a low-interest loan, secured against the homeowner's own equity, so that those who benefit also carry the cost, and it gives Kiwis genuine control over their power bills, rather than leaving them exposed to rising electricity costs. The second part of the plan is to clear away the red tape that has actually made it absurdly hard for New Zealanders to generate power on their own land. And I wanna give you a real example of some of the madness that has been happening.
In Canterbury, one of the regional council there demanded a water discharge consent for ground-mounted solar panels, on the theory that the rain runoff of the panels may contain or carry bird droppings. You know, that is exactly the kind of nonsense that has been holding New Zealand back, and exactly why our RMA reforms are so critical, because we're gonna end all that stupid stuff. We will make small-scale renewables largely permitted as of right, so that New Zealanders can install rooftop solar without a consent.
They can put ground-mounted solar on their farms with sensible safeguards, add small-scale battery storage as of right, and run small-scale micro-hydro on their own land. Frankly, your roof, your land, your power. Electrify NZ 2.0 is part of National's plan to ensure that New Zealand has greater resilience, energy resilience, and energy independence.
It strengthens self-reliance, it improves energy security, and it gives Kiwis genuine control over their power bills. We're empowering New Zealanders to build for themselves. Every rooftop that generates its own power is new electricity being generated.
Every battery is just a little bit more resilient in our energy system. Every family that takes control of its own energy makes our whole country stronger. This is national resilience built from the ground up, roof by roof, home by home, family by family.
That's how we fix the basics, that's how we build the future, and that's how together we build a stronger, more resilient, more secure New Zealand. With that, I'll pass off to Simon Watts to talk a little bit more about the Home Energy Fund, and then I'll pass to Simeon to talk a little bit about the regulatory reform, and then we're happy to take your questions. Thanks.
Well, thank you very much, Prime Minister, and as we've said today, today we are announcing the Home Energy Fund to help more Kiwi families reduce their power bills without needing thousands of dollars upfront. For many households, the biggest barrier to installing solar panels, batteries, or insulation isn't the technology, it is the upfront cost. Under the Ratepayer Assistance Scheme that has been advocated strongly by LGNZ and rewiring AotearoaRW, along with a number of councils across the country, eligible homeowners will be able to access long-term, low-interest finance for approved energy upgrades.
The scheme pays for the installation upfront, and homeowners repay the cost over time through their rates bill. Because the loan is secured against the property, it can be offered on better terms and on over longer periods than many other finance options available today. Importantly, under our policy, those who benefit are the ones that will pay.
This is a practical solution that helps families lower their power bills, improve the efficiency of their homes, and importantly, keep more money in their back pockets. I'll now hand over to Simeon Brown, who will outline further details on how the scheme will work.
Well, thank you. Thank you, Simon, and it's great to be with you, Prime Minister. National is the party of renewables, and we're already delivering at scale through Electrify New Zealand, which is driving a record pipeline of renewable energy in New Zealand right now, including a 47% increase in solar connections over the last few years.
This is another part of our plan to lower household power bills and also increase our energy generation in New Zealand. Some of the key changes that we're making around consenting will also add to the Home Energy Fund, and these changes have been called for by many people in the sector, but also from rewiring AotearoaRW. Some of these changes are critical to ensuring that we have standardized rules across the country to install rooftop solar without a consent.
It's nuts how some councils have particular rules in particular parts of the country which make it complicated and harder. We need to make it easier. Allowing farmers to put ground-mounted solar on farms as a permitted activity is gonna make a huge difference for farmers up and down our country, another common sense change.
Adding small-scale battery storages of right and running small micro hydro for on-site use subject to standard environmental conditions. Again, more common sense changes all about powering up Kiwi farmers, making cheaper power bills, and it's all part of national plan for affordable energy. Thank you so much.
Media Q&A
Questions from reporters (Q), answered by the PM and ministers. Verbatim auto-transcript — some names/phrases marked where audio was unclear.
QDo you mind just running us through logistically how this works? You mentioned it's offset by rates, but imagine it's somebody's rate. Can you just walk us through how it works?
Yeah, I'll let Simon just clap. Yeah, absolutely. So, in effect, we're establishing a passing legislation to establish an entity which will be under LGNZ, Local Government Funding and Financing Authority.
They'll set up an entity and then, basically, individuals will be able to apply for a loan and that will be then allocated. The entity will do all the credit checks required and all of those other aspects. Individuals will need to have a 20% equity position within their home.
Again, the loan is on the property, not on the individual.
QAnd you pay it back through a discount rate?
And then you pay it back through your rates. You also have the opportunity to do some deferral of that as well, depending on your circumstance. One of the big barriers at the moment is if you think about retirees, for example, don't have access to traditional mortgage opportunities, then this financing opportunity opens that up.
It also applies to landlords as well if they want to be putting solar on homes, which will obviously benefit the broader people that are renting as well.
QRight, and you've said this is backed by LGNZ, groups like Rewiring AotearoaRW. Have you got buy-in from councils, specifically Auckland, Christchurch and Wellington?
So, I've spoken with all of those mayors this morning. They have been very positive around the fact that we're looking to progress this. Those councils were part of the design team.
There was eight councils that have been putting together the business case along with LGNZ. So, this is something that, across the sector, a local government sector, that they've been strongly supportive of.
QWon't they take a revenue hit because of your offset against rates?
No, this is on the property owner. The loan is on and with the property owner, the individual that will be looking to repay the loan. It's not a subsidy of any of that context for local government or central government.
It's on the property owner. And I think the other thing, sorry, Jason, I'll just say is that the idea's actually probably been around since 2015. There's massive enthusiasm amongst the councils.
The LGFA model which we use to fund and finance councils has been really successful. So, we're using the same principles of that. But importantly, it means that someone can actually take out that long-term loan, add it onto their rates bill as it gets dished up to them each quarter.
And importantly, also make the savings and electricity savings to order to fund and pay down that loan. The loan through the LGFA dynamic will mean that we'll end up with interest rates that will be well below market rates by virtue of having the councils and the government backstopping it as well. So, we know the mechanism has worked through the LGFA.
We know there's massive enthusiasm from the councils and from local government in New Zealand. And importantly, when you look at the work of rewiring AotearoaRW who've been advocating for this as well, it's actually meaning that people don't have to have the cash upfront and you don't have to be wealthy essentially to be able to put solar on your house. You can actually manage that out.
And then equally make lump sum payments, equally make yearly repayments, no dramas at all.
QWhy do we need this loan scheme when other big banks offer loans for solar energy?
Yeah, it's a really good question. The banks do offer green financing loans. They tend to be of quite small duration, often of only three years.
And equally, there's quite a high rejection rate in terms of credit rating and assessment as well. So, they're there, but what we've found is they actually frankly are quite patchy and actually don't do it at scale sufficiently, which is a system that's actually plugged into property owners. And it's not just homeowners, it's also small businesses.
It's also farms in particular. A number of us and actually Future Energy, this company was down at field days a couple of weeks ago and there's massive enthusiasm to actually say, I've got a spare paddock. I wanna be able to put some ground-based solar on.
I wanna be able to put some batteries in a shed. We wanna make all of that much more permissible, much more easy and more consistent nationally as well.
QHow much uptake are you expecting?
I'll let Simon talk to that. Yes, the original business case assumed an uptake of around 80,000 houses over a 15-year period. That was pretty conservative estimates.
We know that the economics are sensible in the context of putting rooftop solar on your roof. It reduces your power bills and it makes energy costs more affordable. That's the primary purpose of why we see this as such a good solution to challenges that Kiwi households are facing.
And we're pretty confident that with listening to the people from Future Energy here this morning, there is a strong element of demand that we can remove that upfront barrier of cost, which this policy will resolve, then we're looking ahead for some pretty positive opportunities.
QHave you taken this policy from the Greens? They've been calling for similar things.
No, I mean, this policy has been sitting around, I think, since 2016. And our conversations with local government, New Zealand and Simon particularly as local government minister in our quarterly meetings, that's something we've been talking about with them since we came to government. And again, I just say to you, look, when you step back and you see organisations like Mike and his team at Rewiring AotearoaRW making the case for this, when you see enthusiasm from local government and councils wanting to do it, and the government in the past hasn't stepped up on being the partner in that new entity that will enable these loans to take place, it's really, I think, quite common sense at the end of the day.
QAre you being ambitious enough here? I mean, Minister Watts rather mentioned 80,000 in Australia at one and three. Shouldn't we be aspiring to be closer to that?
Yeah, but I think you've got to start somewhere. And actually starting here and doing it in a way that I think is fair and principled. I think the challenge with what we've seen in other parts of the world where you've had massive subsidies, for example, is really challenging and difficult because often it's not particularly targeted.
The people that can access those subsidies are the people that can also afford for the installation. And as a result, low-income folk miss out. And the whole point of this is that you can get a finance structure that may be 10 or 15 years paying it back over time, you're generating the electricity savings, and that's then offsetting the loan repayments.
So I think this is a much fairer way. You'd expect a national government that's wanting to be economically responsible to think of a scheme and to leverage a scheme like this.
QWhat do the gentailers think of your announcement then?
Yeah, I spoke to one of the CEOs last night, very, very positive about it. I think the idea of having, it works on several fronts, right? Really it's about lowering the cost of living, making power bills more affordable for people by being able to have access to a financing vehicle that means that they can get the savings to offset the loan associated with that.
But the second benefit is that we actually are adding to generation and they support distributed generation. And the other thing that I'm really excited about is builds more resilience at the home level and at the property level because we've gone through, my time probably four to six extreme weather events and inevitably powers out for four days somewhere and your ability to be able to have your own battery storage and your own system where you're off-grid, managing your own resilience at a household level, I think it's really quite exciting for a country like New Zealand.
QDepends on the loan that the house has sold.
Yep, I'll let Simon talk to that. Yeah, so in that instance, there's a couple of options. Either the loan can transfer to the new purchaser or at that point when the house is sold, the loan is repaid.
So those two options are in play. Yep.
QHow will it impact ratepayers?
Well, again, it's a positive thing for ratepayers because essentially, we've created a vehicle which is off balance sheet and it's a separate, so it doesn't impact Council's ability to continue investing in infrastructure. It doesn't affect their financials or their ability to borrow money themselves as councils. But importantly for ratepayers, it's giving everybody, irrespective of all property owners, an opportunity to defray and avoid the barrier for solar, which in New Zealand has been those upfront costs of installation.
QWhat about those that don't want the solar panels?
They don't have to participate. It's a voluntary scheme. So you as a property owner could decide, I want to do this, but you may decide you don't want to do that.
And so, that's fine, but you'll just get the-
QIs there a disadvantage for those people though?
No, it's voluntary, it's choice. But yeah, you only get charged if you have the scheme. You only get charged if you've signed up to actually put solar on your roof and you agree a 10 or a 15 year repayment schedule, whatever it may be, at more favourable terms than what you can finance through a bank, because it's backed by the government and by the councils.
And then it's up to you.
QJust back on the Aussies, starting next month, they're gonna get three free hours a day of electricity because they've been able to sell solar back to the grid. Have we been a little bit slow on the uptake? Could this have been New Zealand if we got here a few years earlier?
Well, I've been the Prime Minister for two and a bit years, so I'm doing what I can do and focused on the future. And I appreciate different countries have embraced solar in different ways. As I said to you, the Netherlands, Australia have been really probably the world-leading adoptees of solar around the world.
But even when we look at the US, even when we look at the UK, places irrespective of climate, I think there's an opportunity here. And I think for us, it's been the barrier of that cost, installation cost, which only a certain number of people can afford. How do you make it so it's more fair, more equitable?
And that's through this scheme. One of the things I'll just add to that, though, is from the 1st of July, the electricity authority is requiring retailers to offer time-of-use plans to their customers. There's been a number of changes that we've made to rules for solar over the last two and a half years.
That's one of them. From the 1st of July, that's gonna come in, they're gonna be required to have those plans. So this is another major step forward to make power cheaper for customers.
Yeah, and again, that's our strategy here, is it's an and, and, and, right? We are doing, we're gonna find ways to encourage rooftop solar. We know we need some thermal backing energy as well for the dry year risk.
We're making it much more permissible, easier to get wind farms built in this country and renewables and geothermal as well. So that's what we need to do, because New Zealand has a high level of renewables, which is fantastic. We have this massive dry year risk, which happens typically every four years or so.
We get another external shock every four years or so. And as a consequence, we need to make sure we de-risk it and take the price premium out and lower our power bills. And so this is another initiative of and, and, and.
QYeah, and this is an election policy. What would be your pitch or your message to, say, for example, the Greens or New Zealand First or any of your other would-be coalition partners? I'm not saying that Greens are your would-be coalition partners.
Yeah, I just do wanna reassure you, I'm not very interested in loading up people with inheritance tax, death tax, higher income tax, higher corporate tax, all those things. Tax more, spend more, borrow more is not our plan. But irrespective of other parties, I hope that, again, they made a step back and look at it and say, hey, listen, this makes really good sense.
I think you've seen people and councils of different political persuasions all come united to say this is a good idea over now 10 years or so. We, as the government, can enable that to happen by partnering with the council. So it's just common sense, good policy.
Turn the questions, guys. Yeah.
QShane Jones spent six grand on a limo and he's suddenly saying in a hotel that he can still talk. Is this fair on the tax payer?
Well, again, as I said at the time, we make sure, it's up to ministers and their officers to make sure they build a budget for their travel. In this case, there was an administrative error. Shane has spoken to that.
I don't expect that to happen again.
QYou're asking for fiscal restraint from public service. Are you confident that your ministers are doing that as well?
Yes, we have a process in place where ministers and officers are there to project the budgets and any associated travel they do. That then is signed off and then comes into cabinet for a formal sign off. We expect ministers to adhere to their budgets.
In this case, that didn't happen. But again...
QActivist Eru Kapakimin has posted a video of him punching a punching bag, saying he's imagining it's you. What are your thoughts on this and do you think that's acceptable?
I don't give it any thought.
QI mean, you called for a little bit of a calming of the political tone, though. I mean, hearing about that, that must... Are you reiterating that message?
Well, I just think it's up to political leaders, community leaders, business leaders, everybody to manage their own rhetoric. I manage mine and all I can do is call on other leaders to do their own. But if you seriously think I'm wound up about that, I've got a few other things on my plate that I'm more focused on, which is policies like this that actually help build New Zealand's future.
QA couple of New Zealand firsts has gone in fact government's health and safety changes?
Yes, yes, it's a government bill, government decision. Each party may have their own policy as they go into an election campaign.
QHave you had any changes, though, before that is brought out in the...
Well, again, Winston and Shane Jones and Casey Costello sit in our cabinet. We made a cabinet decision around that. But again, I appreciate that each party will have its own policies as they go into an election.
Okay, thanks, team, have a good day. Take care, thanks for coming.