Australia still doing bare minimum on new-build home energy efficiency
New housing in Australia must meet minimum energy performance requirements. We wondered how many buildings exceeded the minimum standard. What our analysis found is that four in five new houses are being built to the minimum standard and a negligible proportion to an optimal performance standard.
Before these standards were introduced the average performance of housing was found to be around 1.5 stars. The current minimum across most of Australia is six stars under the Nationwide House Energy Rating Scheme (NatHERS).
This six-star minimum falls short of what is optimal in terms of environmental, economic and social outcomes. It’s also below the minimum set by many other countries.
There have been calls for these minimum standards to be raised. However, many policymakers and building industry stakeholders believe the market will lift performance beyond minimum standards and so there is no need to raise these.
What did the data show?
We wanted to understand what was happening in the market to see if consumers or regulation were driving the energy performance of new housing. To do this we explored the NatHERS data set of building approvals for new Class 1 housing (detached and row houses) in Australia from May 2016 (when all data sets were integrated by CSIRO and Sustainability Victoria) to December 2018.
Our analysis focuses on new housing in Victoria, South Australia, Western Australia, Tasmania and the ACT, all of which apply the minimum six-star NatHERS requirement. The other states have local variations to the standard, while New South Wales uses the BASIX index to determine the environmental impact of housing.
The chart below shows the performance for 187,320 house ratings. Almost 82% just met the minimum standard (6.0-6.4 star). Another 16% performed just above the minimum standard (6.5-6.9 star).
Only 1.5% were designed to perform at the economically optimal 7.5 stars and beyond. By this we mean a balance between the extra upfront building costs and the savings and benefits from lifetime building performance.
The average rating is 6.2 stars across the states. This has not changed since 2016.
The data analysis shows that, while most housing is built to the minimum standard, the cooler temperate regions (Tasmania, ACT) have more houses above 7.0 stars compared with the warm temperate states.
The ACT increased average performance each year from 6.5 stars in 2016 to 6.9 stars in 2018. This was not seen in any other state or territory.
The ACT is the only region with mandatory disclosure of the energy rating on sale or lease of property. The market can thus value the relative energy efficiency of buildings. Providing this otherwise invisible information may have empowered consumers to demand slightly better performance.
We are paying for accepting a lower standard
The evidence suggests consumers are not acting rationally or making decisions to maximise their financial well-being. Rather, they just accept the minimum performance the building sector delivers.
Higher energy efficiency or even environmental sustainability in housing provides not only significant benefits to the individual but also to society. And these improvements can be delivered for little additional cost.
The fact that these improvements aren’t being made suggests there are significant barriers to the market operating efficiently. This is despite increasing awareness among consumers and in the housing industry about the rising cost of energy.
Eight years after the introduction of the six-star NatHERS minimum requirement for new housing in Australia, the results show the market is delivering four out of five houses that just meet this requirement. With only 1.5% designed to 7.5 stars or beyond, regulation rather than the economically optimal energy rating is clearly driving the energy performance of Australian homes.
Increasing the minimum performance standard is the most effective way to improve the energy outcomes.
The next opportunity for increasing the minimum energy requirement will be 2022. Australian housing standards were already about 2.0 NatHERS stars behind comparable developed countries in 2008. If mandatory energy ratings aren’t increased, Australia will fall further behind international best practice.
If we continue to create a legacy of homes with relatively poor energy performance, making the transition to a low-energy and low-carbon economy is likely to get progressively more challenging and expensive. Recent research has calculated that a delay in increasing minimum performance requirements from 2019 to 2022 will result in an estimated A$1.1 billion (to 2050) in avoidable household energy bills. That’s an extra 3 million tonnes of greenhouse gas emissions.
Our research confirms the policy proposition that minimum house energy regulations based on the Nationwide House Energy Rating Scheme are a powerful instrument for delivering better environmental and energy outcomes. While introducing minimum standards has significantly lifted the bottom end of the market, those standards should be reviewed regularly to ensure optimal economic and environmental outcomes.
Trivess Moore, Lecturer, RMIT University; Michael Ambrose, Research Team Leader, CSIRO, and Stephen Berry, Research fellow, University of South Australia
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Yes, building efficiency is driven by regulation. Big surprise, not.
I would think that in sticking to the minimum required standard buyers are responding to several drivers.
– Government standards imply that the minimum is acceptable and optimal
– Project home developers have pared standards to the minimum (e.g. tie bricks not used around openings, lowest acceptable quality window frames, etc) as they compete with the builder next door
– Councils prefer larger free-standing ‘family’ homes over potentially more efficient row house developments
– Bigger is perceived as better by home owners, again partly in response to Sylvania Waters but also to housing lender requirements
– The short duration of builder occupancy of a house, if energy costs aren’t recovered before the new build owner moves out in seven years there is no point in going higher star rating
The whole star rating system seems a rort and apparently easy to get anyway. We’re building a new house to near Passiv Haus standard, hopefully 9+ star rating, but in our council building application the only data our designer provided to demonstrate meeting 6-stars was a glazing calculator spreadsheet listing lower spec windows & doors than the triple glazed ones we’ll actually be using.
For years many home builders have used a loophole called VURB to meet compliance but not achieve a 6 star rated home. NCC 2019 effectively closes this loophole so homes soon to be built will be more energy efficient.
Achieving 7 stars is not really that hard, some councils require this as a trade off for non compliance in other design areas.
When will Australian home buyers realise that it’s not all about money and status? An energy efficient home is a comfortable home. A pleasure to live in. A pleasure to come home to. Whatever the weather, too hot or freezing cold outside, you come through the door and sigh, oh, that’s so much better!
As with so many purchase decisions, quality is remembered long after price is forgotten.
A frequently overlooked aspect of housing efficiency is reducing the size of the house. Why do people think they need a formal living room, a separate dining room, a family room, a study, a games room, 6 bedrooms each with a bathroom, and a home theatre? And a 4 car garage? Will it make them happy?
I don’t think so. It is far more likely to make them miserable from mortgage stress, the extra cleaning that needs to be done, and the impossibility of heating and cooling all that space, much of which has no doors to close off areas not in current use.
OK for the CEO of a major company, with a multi million annual salary, and high-level entertaining requirements, but for Ron and Rhonda average, just a monstrous millstone around their necks and a recipe for marriage breakdown and other miseries.
A big enough house, with kid’s bedrooms of a size to allow for homework and other activity, a room for family time that can be conveniently heated and cooled, and good orientation, top spec double glazing, insulation, and tight construction, will probably cost far less to build than that cavernous McMansion, and will certainly cost far less to run, leaving funds available for leisure activities not available to those who spend far more than they can afford on far more house than they need.
End of rant.
The punters are excepting lower rated houses because they don’t know any better. They also don’t have a clue as to the poor performance and efficientcy of appliances, namely big ducted air cons. They have no idea as to what a financial disaster they are getting into when they go for that option. It’s not uncommon for me to receive a phone enquiry about the cost of solar from people who have power bills of $2.5-3k/ quarter.
It’s far worse than this. The NATHERS software is full of loopholes, overstates efficiency and most of the time is not even used via the comparison to a reference house method which is used instead to lie.
The actual performance of the homes built are even worse than these researchers would expect.
I built a model from scratch via first principles to direct the design of my house, so that i knew the effect of eave widths, window size and placement, materials of construction etc etc. Put my design in and came out with 7.5 stars, which i thought was a bit low. So i put the Government’s 6 star house that you can download off their website into the model, came out at 4.3. Which is no surprise when you take a look at it, there’s no way that it’s a 6 star house, but it’s equivalent to the pieces of rubbish that get built.
The single most stupid thing we are doing across the suburbs is building brick boxes with black roofs! In the middle of winter, we forget, but there are very few areas which don’t suffer terribly in Summer from heatwaves.
Even with extreme roof insulation, all the heat from a black roof adds heat to the environment creating a heat island effect.
It is stark raving madness!