Some low-income households are having to cut back on showering, washing and cooking to cope with rising power bills, researchers say.
Kimberley O’Sullivan and co-authors from the University of Otago have released a briefing that highlights that low-income households are spending disproportionately more of their income on power costs, but are often still unable to meet their basic needs.
“Our research shows those most vulnerable to energy poverty have already cut back on electricity use as much as possible. As prices continue to rise, there is no wiggle room for these households,” she said.
She said by using the 2m model, which measures how many households are spending twice the median proportion income on energy-related costs, about 360,000 New Zealand households were in energy poverty.
O’Sullivan said New Zealand had poor-quality housing compared to many other countries, which meant many people relied more on electricity to keep warm over winter.
“As well as causing physical health harm, energy poverty contributes to broader well-being impacts and increases the risk of severe mental distress. Living in energy poverty exposes many people to unsafe indoor temperatures which translates to the excess winter deaths.
“The evidence shows that those who can least afford to pay for electricity pay the most both per unit and relative to their income.
“Despite this, they still don’t meet their energy needs and as a result experience negative health and wellbeing consequences from cold housing.”
The highest earning 10 percent of households were spending $62.70 a week on power, compared with $35.10 for the lowest incomes.
“What low-income households are spending and what they are achieving versus higher incomes… the bang for buck is not really happening,” O’Sullivan said.
For the lowest earners, that was 7.7 percent of their income compared with 1.3 percent for the highest earners.
O’Sullivan said the situation was likely to get worse. High spot prices recorded in winter this year would flow through at some point, she said, and next year transmission costs would be reset which would add an extra $10 or $20 a month for most households.
She said it would help to think about what the country could do long-term to increase energy affordability, and to improve the housing stock so that people did not need as much heating in winter.
“Other countries don’t need to spend as much because their houses don’t change with the outside temperature like ours do.
“We know that the Healthy Homes Initiative is making such an amazing difference for low-income families with children that have been hospitalised for housing-related illnesses with interventions that are quite basic, so extending the Healthy Homes Initiatives so that they can do an even better job of making those homes more energy efficient – getting them closer to new-build standard or even aiming higher – would be impactful.
“Going further, we could include a roll-out of solar PV and that would support those households longer term.”