OT_087: Grimes & Preval (2020) — Warmer Kiwi Homes Evaluation 2020: Phase 1 (Motu, report to EECA)

OT_087: Grimes & Preval (2020) — Warmer Kiwi Homes Evaluation 2020: Phase 1 (Motu, report to EECA)

Source

https://www.eeca.govt.nz/assets/EECA-Resources/Research-papers-guides/warmer-kiwi-homes-evaluation-phase-1-motu.pdf — original source (opens in a new tab; the file is not redistributed)

Grimes & Preval (2020) — Warmer Kiwi Homes Evaluation 2020: Phase 1

Grimes A & Preval N. 2020. Warmer Kiwi Homes Evaluation 2020: Phase 1. Report to EECA, August 2020. Motu Economic & Public Policy Research (Grimes) with Allen & Clarke (Preval).

A health-mortality benefit-cost case, not an energy case

The headline 4.66:1 BCR is overwhelmingly (~82%) an insulation → reduced elderly mortality benefit; energy savings are a minor component and heating retrofits show a negative energy benefit (take-back). It is a societal-health economic justification, not an input the NI energy/resource engine computes.

Summary

The upstream primary behind LIT_044’s insulation benefit-cost ratio. A Phase-1 cost-benefit analysis of EECA’s Warmer Kiwi Homes (WKH) retrofit programme, building on the Warm Up NZ: Heat Smart (WUNZ:HS) evaluation. The primary model returns a benefit-cost ratio of 4.66:1 (4.66 of societal benefit per 1 spent, excluding comfort/wellbeing), robust across a wide range of assumptions (1.83–5.25) but dominated by insulation-driven mortality benefits among elderly occupants. Energy-use savings are small; clean-heating retrofits show a take-back (comfort) effect. The report also reviews the NZ retrofit evidence base (component BCRs, optimal retrofit sequence) and frames the market failures that justify public retrofit programmes.

Key claims

- claim: "The primary benefit-cost ratio for the Warmer Kiwi Homes programme is 4.66:1 (Table 5 primary model: 4% real discount, 30-year insulation / 10-year heating lifespan, 80% CSC households, 75% additionality, no heat-pump maintenance) — $4.66 of societal benefit per $1 spent, excluding comfort/wellbeing benefits. Total NPV of benefits $312.9M on resource costs of $67.2M."
  source_location: "Exec summary (p1); Part 2 Table 5 (p30)"
- claim: "The BCR is robust but mortality-valuation-dependent: across scenarios it ranges 1.83–5.25 — additionality 50%/100% give 4.11/4.99; CSC 60%/100% give 4.06/5.25; a 15-year insulation lifespan gives 2.99; using Pharmac's value of life ($45,000/life-year) instead of the transport-sector value gives 1.83; adding $20/yr heat-pump maintenance leaves it at 4.66. Every scenario remains favourable."
  source_location: "Part 2 Table 5 (p30); §sensitivity (p28–29)"
- claim: "Benefits are dominated by insulation-driven mortality reductions among elderly occupants: ~$255.5M of the $312.9M total NPV (~82%) is insulation mortality benefit. Energy-use savings are minor (NPV $11.8M insulation, −$0.59M heating), so the economic case is a health-mortality case, not an energy-savings one."
  source_location: "Part 2 Table 5 (p30)"
- claim: "Component BCRs from the NZ evidence base: the Chapman et al. (2009) insulation RCT found 1.87:1; the Preval et al. (2010) clean-heating RCT found 1.09:1; the WUNZ:HS whole-programme evaluation (Grimes et al. 2011) found 3.86:1. Insulation is the economically strong measure; clean heating alone is marginal."
  source_location: "Part 1 (p7–10); Background (p4)"
- claim: "Per-household energy effect (Table 4, $NZ2019): insulation cuts ~168 kWh/yr of metered energy ($44.75 value); clean heating slightly increases metered energy (−48 kWh/yr, −$25.06) — a take-back effect where warmth is taken as comfort rather than savings."
  source_location: "Part 2 Table 4 (p27)"
- claim: "Programme scale and cost (Table 1, 1 July 2018–26 March 2020): 20,296 homes received floor/ceiling insulation and 3,870 received a heater, at a total programme cost of $73.25M. NZ has ~1,600 excess winter deaths per year attributable to cold indoor temperatures (Howden-Chapman et al. 2012)."
  source_location: "Part 2 Table 1 (p25); footnote 33 (p20)"
- claim: "Optimal retrofit sequence for a cold NZ house (Lloyd, Bishop & Callau 2007), all options paying back within ten years via energy savings: (1) ceiling insulation, (2) floor insulation, (3) low-emission wood/pellet burner, (4) heat pump, (5) air-tightness, (6) wall insulation, (7) double glazing."
  source_location: "Part 1 (p6)"

Neobiome Intelligence relevance

Context: thesis/economic-justification, not a load-bearing NI cell. The 4.66:1 BCR is a societal health-mortality benefit ratio (insulation → fewer elderly deaths), which the NI energy/resource engine does not compute. The NI ④c building_standards lever trades a capex premium against heat-demand reduction — an energy/cost trade fed by CR_017 / OT_085 (capex) and CR_015 (heat demand), not by this BCR. OT_087’s NI value is contextual:

• D04 / I01 economic justification — independent, authoritative confirmation that insulating a community’s housing is economically rational at the societal level (the strongest single argument for high-performance habitat).
• Energy calibration colour — insulation cuts ~168 kWh/yr/household (modest); the take-back effect (heating retrofits raise metered energy) is a caveat the model’s building-standard demand-reduction should acknowledge (not all of the modelled heat-demand cut shows up as energy saved — some is taken as comfort).
• Design heuristic — the Lloyd et al. optimal retrofit sequence.
• Resolves RT_209: the upstream primary behind LIT_044’s BCR. Precise figure 4.66 (LIT_044 rounded to 4.7), range 1.83–5.25.

Key thesis insights

• Market-failure framing justifies public retrofit programmes: split landlord/ tenant incentives, imperfect information, and externalised health/environmental costs borne by society — a direct support for the thesis’s governance/policy argument on why self-provision and collective action are needed where markets under-deliver.
• Durable-intervention rationale: NZ’s ~90-year average home lifespan plus a large pre-1978 uninsulated stock means building/retrofit decisions have multi-generational consequences.
• Health–housing nexus: WHO’s 18 °C minimum (a strong recommendation on cold, a conditional one on insulation) and ~1,600 excess winter deaths/yr ground the basic-needs (I07) and resilience (I06) case for warm, healthy community housing.

Research targets

Documents to retrieve

• None — RT_209 resolved by this report.

Research gaps

• None new. (The report’s own Part-3 evidence gaps — clean-heating benefits, benefit distribution, peak-demand impacts — are WKH-evaluation gaps, not NI model gaps.)

Connections

Links to

Sources (3): CR_017 · LIT_044 · OT_085

Referenced by

Sources (2): LIT_044 · OT_152

EDT domains (1): D04: Sustainable Habitat & Building Technology