ENERGYWISE ™ Programme Request for Proposal
Questions & Answers - as at 04 June 2008
Who is expected to apply?
It is expected that there will be some interest from organisations already operating in the market who are keen and able to implement solutions which will improve the energy efficiency of the New Zealand housing stock, including possibly some existing Home Grants partners.
When will the grants and interest subsidies be available?
These are available now. See the link to the list of partners [PDF 19KB].
What will the partners do?
The partners will deliver funding provided by EECA as grants and interest free loans to homeowners who meet the programme criteria.
They will be expected to manage all aspects including:
- Marketing to target groups;
- Assessing the energy efficiency needs of homes and recommending solutions;
- Selling and installing energy efficient products;
- Providing access to loan finance;
- Claiming subsidies and grants on behalf of customers and administering these back to customers;
- Providing back up service and support to customers
How much money is available?
The Government announced in the 2007 Budget an allocation of $23 million over four years in contingency to help homeowners pay for energy efficiency and efficient heating upgrades. This funding will be spread over four years. The amount distributed in the first year will depend on the proposals put forward by partners.
How often will EECA be issuing RFPs for further funding and when will the next tender be issued?
EECA has now run two RFP's. Further RFP's are anticipated from
1 July 2008.
How many partners is EECA looking for?
EECA has not set any limit on the number of partners.
What was the result of the Request for Information (RFI) on this programme?
EECA invited interested parties to comment on the programme through an RFI earlier this year. 33 replies were received which generally supported the scheme’s objectives and approach and provided some useful input.
A list of organisations have stated their willingness be contacted by other parties to discuss possibilities for submitting collective proposals under the scheme.
>> View list of interested parties
Who will be eligible for the grant or interest subsidy?
The funding will be available to homeowners earning less than $100,000 pa (1 or 2 earners) or $140,000 pa (3 or more earners), with houses or other dwellings built before 1 April 1978. It will also be available to private residential landlords, where they are insulating and applying other energy efficiency measures to residential properties built before 1 April 1978.
How does this funding assistance differ from the existing Home Grants scheme?
This programme is looking to reach a wider population group and will include middle income households as well as lower income groups whereas Home Grants targets Community Services Card holders and offers a different type of funding.
How many homes will benefit from this funding?
It is expected that the programme will benefit approximately 3,000 homes in the first year and will be expanded in future years.
Will this funding be available throughout New Zealand?
That depends on the partners who respond to the RFP. There is potential for this to be available nationwide.
How will the interest subsidies or grants work?
Partners will provide access to loan capital for customers. They can provide this directly or establish partnerships with banks or other reputable lenders. EECA will provide an interest subsidy to qualifying customers, effectively reducing the cost of the core energy efficiency products being purchased. A maximum interest subsidy of $1,250 will be paid in respect of any one loan/customer.
How much will the grant be?
If customers prefer a grant to an interest subsidy, EECA will pay partners an amount equivalent to 10% of the capital cost of core products purchased (incl. GST), up to a maximum of $500. Grants will not be paid if the capital cost of core products purchased is less than $1000.
Can a homeowner claim for ENERGYWISE™ Funding if a dwelling has previously received the benefit of EECA funding e.g. a grant for an insulation retrofit?
Yes, so long as the same measure is not being subsidised twice. A retrofitted dwelling could therefore be eligible for ENERGYWISE™ Funding on the cost of a heating solution only, assuming other criteria are met.
Can Partners offer a customer two types of subsidy in one package i.e. mix an interest subsidy or grant from ENERGYWISE™ Funding with funding from other EECA programmes?
Yes, so long as the measures being subsidised are different. An ENERGYWISE™ home grant can therefore be offered on the insulation measures and an interest subsidy (or grant) offered on the heating solution, subject to the eligibility criteria for both funds being met.
Can a customer be eligible for a solar water heating subsidy as well as ENERGYWISE™ Funding (interest subsidy or grant) for a space heating solution?
Yes, provided the requirements of the solar subsidy are met.
Will Partners be allocated a set amount of funding? Can respondents seek funding for “out-years” beyond 30 June 2009?
EECA is not setting quotas or budgets under ENERGYWISE™ Funding. Instead, we will pay subsidy and grant claims “on demand” (likely to be on a monthly basis) as the business is transacted, for as long as the funding is available and the quality of delivery is maintained. Currently we have funding approved for four years. Partners will be asked to provide ongoing forecasts to enable us to report back to Government on the scheme’s take-up and to seek further funding if required.
Do respondents need to have signed agreements in place with suppliers and other 3rd parties for their proposals to be accepted?
No, though respondents do need to be able to demonstrate that their proposed business model is sufficiently well advanced to deliver the programme from early 2008. Any arrangements with 3rd party financiers should at least be at the MOU stage, and a copy of this provided as part of the RFP response.
Is the cost of preparation and application for building consents covered by this scheme? Also is the installation of the products covered or just the cost of the capital goods themselves?
Loans should cover all the costs of purchasing core products, including building consent fees, product purchase, and installation.
How do homeowners learn of the scheme and who do they approach in the first instance to apply to be part of the scheme?
EECA is undertaking an extensive general awareness campaign to promote the interest subsidies and grants as well as the broader ENERGYWISE™ Homes range of programmes. It will also work with Partners wishing to undertake joint marketing campaigns, with options for Partners to utilise differing levels of endorsement of the ENERGYWISE™ brand.
The intention is that customers approach Partners to seek ENERGYWISE™ solutions. EECA’s role in the customer experience is mainly focused on payment of interest subsides and grants to Partners and ensuring its product and service quality standards are met.
Is the cost of preparation and application for building consents for the installation of solid burners covered by this scheme? Also is the installation of the products covered or just the cost of the capital goods themselves?
Loans should cover all the costs of purchasing core products, including building consent fees, product purchase and installation.
If your application is successful are you allocated a set amount of money?
No. EECA is not setting quotas or budgets under ENERGYWISE™ Funding. Instead, we will pay subsidy and grant claims 'on demand' (likely to be on a monthly basis) as the business is transacted, for as long as the funding is available and the quality of delivery is maintained. Currently we have funding approved for four years. Partners will be asked to provide ongoing forecasts to enable us to report back to Government on the scheme’s take-up and to seek further funding if required.
Would the loan subsidy apply if we installed products that exceed the minimum EECA requirements - R 4.6 ceiling insulation into ceilings in Auckland for example?
The measures installed should be based on a needs analysis of the house. As long as the products selected meet or exceed EECA’s standards the customer may choose to have products of a higher specification installed. However, there is a cap on the value of the interest subsidy of $1,250 per customer ($500 for the grant option) and selecting products with higher R values (for example) may mean that the larger loan required to cover the additional cost is not entirely interest free.
Is there any flexibility in the home eligibility date of 1 April 1978?
No. This was a Cabinet decision.
Are loan documentation fees part of the cost of finance?
Yes, loan application fees can be included in the eligible loan amount on which EECA will pay a subsidy (refer Appendix 1. p. 32 of the RFP).
Can you please elaborate on the method used to calculate the Net Present Value (NPV) of the interest payable over the term of the loan?
>> The NPV model [PDF 27 KB]
>> The loan amortisation schedule [Excel 3.54 MB]
>> Reserve Bank of New Zealand 90 day discount rate as used in the NPV calculator.
Is there an application form we need to fill in?
There is no application form for this RFP. This is a new programme and we are trying to minimise the constraints on respondents to encourage innovation.
If we do not include some of the elements included in the RFP (such as the fridge retirement scheme) in our proposal can we include them later?
Yes. If you do not include these elements in your proposal it will not preclude you from adding them to your package to households at a later date, should your proposal be successful. EECA will work in partnership with organisations who are delivering packages under the scheme to ensure as many benefits as possible reach householders.
If we negotiate a relationship with a finance provider can we change these agreements once we have signed an agreement with EECA?
Yes. The scheme will operate with a flexible approach provided that quality standards are met. A change like this would be made by negotiation. EECA wants to accommodate as many business models as possible to encourage innovation.
The RFP refers to $70 million being made available for this scheme, but the government press release on the topic refers to $23 million over 4 years. Can you clarify the difference between these two numbers?
The government announced an ENERGYWISE™ homes package in Budget 2007 costing $66 million over four years.
$23 million of this is for the new ENERGYWISE™ interest subsidies and grants scheme for energy efficiency installations or upgrades.
The remainder covers:
- on-going ENERGYWISE™ home grants and clean heat upgrades,
- the voluntary Home Energy Rating Scheme (HERS),
- an information campaign for householders,
- research and sector development to identify new energy-efficient technologies and to ensure that industry has the capability to deliver to the public,
- support for local councils to implement the new Building Code,
- and other energy efficiency related initiatives partnerships with the private sector to develop new financial incentives for energy efficiency.
How can we verify the age of the house, or are we to take the homeowner’s word for it?
Dwelling age can be ascertained from a LIM report or valuation report, if held by the homeowner. The insurance schedule attached to the dwelling’s insurance policy may also state the dwelling age. Otherwise, a declaration from the homeowner will be sufficient.
What sort of evidence is required to confirm we have financial capacity to administer the programme, and our organisation is in sound financial health?
The following information would be desirable for EECA’s initial due diligence purposes:
- Statement of Financial Performance [Profit & Loss Account] for the last 3 Financial Years - (audited if available).
- Latest Statement of Financial Position [Balance Sheet] - (audited if available).
Please note that EECA may still exercise its right to undertake further due diligence on a respondent’s financial strength as part of its evaluation and selection process.
Is the HERS subsidy likely to cover the total cost of the assessment, or will trial participants (providers and/or customers) be expected to cover costs?
The cost of a HERS assessment will vary from house to house and some assessments are likely to exceed the maximum subsidy available in the trial. In those cases the provider can either (1) meet the additional cost themselves (so that the HERS assessment is free to the customer), or (2) pass the additional cost on to the customer. The customer can pay the additional cost in cash or add the amount owing to a loan, along with the insulation and heating costs. If added to a loan, the cost is eligible for an interest subsidy under ENERGYWISE™ Funding.
We would like to submit a proposal through the RFP process but some of our arrangements cannot be confirmed until after the closing date due to timelines beyond our control. Will this eliminate us from the process?
No, this will not automatically eliminate your application from the process. However the evaluation panel will need to see the arrangements you are negotiating and the timeframe in which you expect them to be confirmed. If there is a significant delay in finalising your arrangement EECA would need to be assured that your final arrangements are consistent with the proposal that was evaluated by the panel.
Does EECA have results of market surveys commissioned that give an indication of the likely response to the proposed new ENERGYWISE™ Homes programme?
EECA undertook a Request for Information process in August which provided feedback from around 40 respondents who collectively indicated strong support for both the delivery and uptake of the scheme. EECA has not commissioned any market research as such at this point.
Can we include polythene moisture barriers as a core under-floor insulation product?
Insulation must be installed in accordance with NZS 4246:2006. In certain circumstances (in line with that standard) polythene is a requirement when installing under-floor insulation. In those circumstances polythene is a core product.
We are preparing documentation for use under the scheme if our proposal is accepted. Can we use the ENERGYWISE™ logo on these?
You can refer to subsidies being made through EECA in your documentation but use of ENERGYWISE™, and/or its logo, is subject to a separate contract between EECA and your organisation.
What kind of documentation will be required to confirm householders meet the income eligibility criteria?
EECA is presently preparing a form of declaration through which the homeowner will confirm matters relevant to their eligibility. Partners will not be asked to obtain evidence of income beyond this except where they have reason to believe the homeowner is not answering honestly or where it is inconsistent with any other information provided e.g. in their application for finance to the Partnering Lender. In these cases, the Partner should request evidence of income to confirm the homeowner’s declaration and may decline eligibility based on the information provided. Partners will, in all cases, be expected to act prudently.
Is the $100 payable for fridge retirement inclusive or exclusive of GST?
This payment would be exclusive of GST.