Talks underway to set minimum standards for “very energy inefficient” rental properties

The Victorian government has launched consultation on new minimum energy efficiency standards for rental properties that would lift the standard of living and slash the energy costs for renters by hundreds of dollars a year.

The proposed new standards would set minimum requirements for ceiling insulation and draught-proofing as well as for efficient hot water, heating and cooling.

This would include a 3-star cooling rating for air-conditioning systems in the main living area, 4-star shower heads in all showers, and weather seals on all external doors.

Further they would require landlords to install efficient electric hot water and air conditioning systems once old appliances reach the end of their life – a measure that could save renters $215 off their energy bill per year.

With improved standards for insulation and draught-proofing, D’Ambrosio says the energy bill savings for renters could reach up to $567 a year.

“Everyone deserves to live comfortably – these proposed standards will make rentals more energy efficient and cheaper to run – slashing their bills and making them more climate resilient,” D’Ambrosio said.

These new minimum standards build on existing rental minimum standards introduced back in 2021 which covered 14 categories including heating, bathrooms and kitchens, ventilation, and electrical safety.

The government says that any changes resulting from the consultation process will be phased in, to give landlords time to ensure their properties meet the new standards, with compliance starting from October 30, 2025.

D’Ambrosio notes that renters and landlords can access discounts to home energy and appliance upgrades through the Solar Homes and Victorian Energy Upgrades (VEU) schemes.

The launch of talks on the new standards, and a set date for implementation, has been welcomed by the Energy Savings Industry Association, as addressing “another tough area” in the efficiency and electrification space.

“This proposal is a major step that will open the door currently jammed for renters and vulnerable Victorians that live in very energy inefficient properties where landlords currently have no stick or carrot to improve conditions,” ESIA president Rod Woolley said on Tuesday.

“The VEU is well placed to support landlords with upfront financial incentives that will make upgrading their investment properties more affordable in a tough economic environment.”

Woolley says the consultation will drill into specific requirements such as minimum efficiency equipment installations for hot water systems, heating and cooling, draft proofing and shower heads.

“We see that ceiling insulation is also a proposed minimum requirement and look forward to continued engagement with the Victorian government to consulting on introducing financial incentives to support this activity under the VEU,” he said.

To have your say on the proposed new minimum standards, visit engage.vic.gov.au.