Blog | 3rd May, 2018

Delay raising new home standards could cost $1 billion

We’ve just made it through another summer, and households across Victoria are receiving higher than necessary electricity bills because their houses aren’t designed for the heat. Meanwhile the National Construction Code review process is about to lock in standards for new buildings until 2022 – without any increase in efficiency requirements for new homes.

The 6‐Star residential rating has not been strengthened since it was adopted in 2010, yet there is growing evidence that our homes are not up to meeting the challenges of a hotter, drier and more unpredictable climate.

With summers getting hotter, more households worrying about energy bills and time running out to turn around climate pollution, can we really afford to wait another 4 years for more sustainable new homes?

The answer is an emphatic no, according to a new report just released by ClimateWorks and the Australian Sustainable Built Environment Council.

The report found that adopting cost-effective efficiency improvements in the national code – equivalent to raising standards to around 7 stars – could save Australian households an estimated $4 billion on their energy bills by 2050.  Delaying this improvement by only 3 years could lock in more than $1 billion in unnecessary energy bills for the estimated half a million homes that will be built nationwide in the meantime, and add an extra 3 million tonnes of climate pollution to 2050.

For Melbourne’s climate zone, raising standards for basic measures like insulation and draught-sealing would cut household energy bills by around $230 a year. And because efficient homes can avoid or delay the need for air-conditioning on hot days when the grid is under pressure, every efficiency upgrade delivers wider network savings of more than $530. All for a one-off extra cost of around $2,000.

So what’s holding us back? Part of the reason is that opponents of higher efficiency standards can successfully argue to government that new home buyers don’t want and can’t afford any increase in upfront costs.  And because most homebuyers don’t have a great understanding of the trade-offs between a slightly lower purchase price and higher bills for the lifetime of the home, there’s not exactly a clamour coming from consumers disputing that view.  As a consequence, the longer term interests of new home buyers are not always represented in regulatory decisions which have such a significant bearing on their quality of life into the future.

But the tide of consumer sentiment might be turning. New polling commissioned by ACOSS, the Energy Efficiency Council and the Property Council released in April found a whopping 88% of Australians support strengthening minimum standards for new homes.

Nevertheless, the new national code does contain several positive proposals including new homes being required to meet minimum separate performance standards for summer and winter. This will begin to address a key problem with existing standards, where a home designed to perform well in winter could still be very uncomfortable and expensive to keep cool in summer.  With more homes in Victoria now having air-conditioning, and home cooling an increasingly significant factor putting additional strain on the grid on hot days, the days of designing our homes purely for winter heating should be over.

And in the meantime, Victoria has a golden opportunity to set an example by moving to higher standards beyond 6-star between now and 2022.  When we consider that nearly 60 percent of the buildings standing in 2050 will be built after 2019, the decisions we make now – or fail to make – will continue to affect the quality of life of millions of Victorians for a long time into the future.

There is also increasing evidence that compliance even with our existing 6-star standards is not as good as it could be – meaning that homebuyers buying a new home might not actually be getting the performance they’ve been promised.

So there’s plenty of room for improvement and Environment Victoria will be staying closely involved with this process at both the state and national level. We made a submission to the draft Code and will continue pushing for both strengthened standards and a clear pathway towards net-zero emissions housing before 2050.

As always, we’d love to hear from you if you live in a home built since 2010 and would like to share your experience, so please feel free to drop me a line.

Anne Martinelli

Efficiency and Clean Energy Campaigner

Header image credit: Light House Architecture & Science, Rodrigo Vargas