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Energy officials have been asked to examine whether heating and insulation companies are putting up prices to take advantage of a Government scheme.
There have been reports of companies raising prices in the wake of the Government-subsidised Warm Up New Zealand scheme, developed with the Green Party
Run by the Energy Efficiency and Conservation Authority (EECA), the scheme will see a $323 million fund to subsidise the insulation of 180,000 pre-2000 houses by 2013.
The fund will pay 33 percent of the cost of insulating floors and ceilings. It allows claims of up to $1300 in insulation subsidies and $500 for a heating appliance.
Community Service Card holders can get more funding.
Prime Minister John Key said yesterday he would be concerned if the subsidy had the effect of leading to higher prices and not the anticipated benefit to consumers, The Dominion Post newspaper reported.
"I've certainly said to my officials I think it's something we should have a look at."
One Lower Hutt man found that a Government-approved provider charged $700 more than a company that had not signed up to the scheme.
Approved companies say they offer a superior service and face compliance costs because of the scheme.
They are warning that many people will not have insulation and heating installed by next winter because the demand is so great, and the first year's subsidies will run out.
EECA residential manager, Robert Linterman, said some consumers had complained about excessively high quotes from Government-approved providers, but had usually not been comparing the same products.
Approved providers were on a contract until the end of September. Applicants for approved status after that had been asked to submit prices.