The company in charge of repairing earthquake-damaged homes in Christchurch is being criticised for refusing to insulate them as it replaces uninsulated cladding.
The Government has allocated $323 million to insulate 180,000 homes by 2013.
Fletcher EQR initially encouraged homeowners to insulate previously uninsulated homes when it began repairing houses.
However, it has since changed its policy - only installing insulation when existing insulation has been damaged.
The Community Energy Action lobby group says not installing insulation at the same time as repairs are done represents a wasted opportunity, especially when the Government is spending millions of dollars subsidising home insulation.
The company says its contract prevents it from installing insulation to previously uninsulated houses.
Spokesperson Barry Akers says while it is theoretically possible to install insulation while cladding is being replaced, this falls outside the confines of the company's contract.
Mr Akers says Fletcher EQR cannot let anything get in the way of its primary task, which is to carry out repairs, and retrofitting uninsulated homes would cause delays.
The company says retrofitting would also create health and safety issues.