Many homes in Australia were constructed before the implementation of building energy standards. As a result, millions of homes require an excessive amount of heating and cooling energy to maintain optimal living conditions for residents.
The Australian Government is working with state and territory governments to improve home energy efficiency, reducing power bills and carbon emissions, whilst making homes more comfortable, productive and healthy to reside in.
The What:
Energy Ministers released the Home Energy Ratings Disclosure Framework Version 1 on 19 July 2024, which sets out a national approach to:
- Assess the energy performance of homes and;
- Provide an energy performance rating and certificate to households at the point of sale or lease.
As an initiative under the Trajectory for Low Energy Buildings, it is the first key step on the journey to implementing residential energy performance disclosure schemes.
The Why:
Whilst several home energy rating tools are available to the residential market including NatHERS, Residential Scorecard and BASIX, the absence of a national framework for disclosure of home energy ratings creates confusion and limits incentives for consumers.
Below are some unsavory, cold hard truths regarding existing homes within Australia:
- Cold living environments account for 6.5% of deaths in Australia each year – a mortality rate almost double that in Sweden.2
- Most Australian homes are too cold in winter and too hot in summer. The average NatHERS3 rating of existing homes is estimated to be less than 2 stars out of 10.4
- Research in 2016–2018 found that 81.7% of new housing is designed to meet only minimum NatHERS requirements, and 98.5% of existing housing stock falls below optimum economic and energy performance.5
- In homes with poor thermal performance and inefficient appliances, householders rely on artificial heating and cooling to stay comfortable, causing them to use more energy and spend more money to keep their homes at a comfortable temperature. Low-income and disadvantaged households spend disproportionately more of their incomes on electricity and have less choice and control to reduce bills.6
- Several barriers prevent renters from making energy efficiency upgrades. These barriers include a lack of information about the property, split incentives, insecure tenancy, and an uneven power dynamic between renters and landlords7 and housing owners and managers.
- Insecure tenure can make it difficult for tenants to request repairs and upgrades, as they have limited rights to make changes to properties and may fear eviction.7 This inhibits renters from contacting landlords about energy issues and upgrades.
- Social housing dwellings are among Australia’s least energy efficient. Currently, most social housing dwellings have a very low energy efficiency rating due to ‘the age of much of that stock, backlogs in maintenance, and the selling off of better-quality properties over the past 50 years.’8
The How:
The Australian Government is working with state and territory governments to improve home energy efficiency. This will reduce energy bills, make homes more comfortable to live in, and help reduce carbon emissions.
Key measures include:
- Improving the energy efficiency of new and existing homes
- Improving home energy ratings and disclosure
- Assisting households to make informed choices about their energy use and appliance purchases.
The Home Energy Ratings Disclosure Framework outlines policy parameters for disclosure schemes, which can be adapted and implemented by governments, providing guidance on developing a supportive market environment.
State and Territory Policy Parameters:
Whilst state and territory governments are primarily responsible for energy efficiency regulations in residential buildings, the Framework will strengthen implementation and enforce uniformity among jurisdictions by establishing the fundamental guidelines for disclosure schemes.
Policy Parameters include:
Dwelling Types
- The Framework currently applies to single dwellings defined as National Construction Code (NCC) Class 1a.
Triggers
- The Framework focuses on disclosing energy efficiency when a property is advertised for sale or lease.
- Disclosure at this time guarantees that buyers and renters will receive energy performance information when a home is advertised for sale or rent.
Energy Ratings and Assessments
- The Nationwide House Energy Rating Scheme (NatHERS) is the most suitable rating scheme for residential disclosure.
- NatHERS assessments are currently used for new homes and provide accurate and comparable home energy performance ratings and information.
- NatHERS is being expanded to provide ratings and detailed upgrade advice for existing homes.
- Governments continue to investigate the feasibility of simplified assessments.
Quality Assurance
- Compliance for energy ratings and assessments will be managed under NatHERS, while compliance for the public disclosure of these ratings will be overseen by the individual jurisdiction if they are mandated, or if they are voluntary but part of a government program.
The Trajectory:
As previously acknowledged, whilst several home energy rating tools are available to the residential market including NatHERS, Residential Scorecard and BASIX, the absence of a national framework for disclosure of home energy ratings creates confusion and limits incentives for consumers.
The Home Energy Ratings Disclosure Framework has been developed to standardised the assessment process to be used by all participating jurisdictions and delivery partners, ensuring consistency and meeting specific criteria.
- It will enable like-for-like comparison of the energy performance of different dwellings, including new and existing homes.
- Assesses thermal performance, fixed assets and whole-of-home efficiency (i.e. combined performance of the building shell, major fixed appliances and fittings and onsite renewable energy systems)
- Is market tested across jurisdictions, in all major climate zones, and for various built forms.
- Is verifiable and accurate
- Provides information about potential upgrades
- Is easily understood by consumers and others who need to use the assessment outputs.
Nationwide House Energy Rating Scheme (NatHERS):
Based on these criteria, NatHERS was chosen to underpin residential disclosure. This choice was backed by the Australian Government, state and territory governments, the REEDI Forum and industry.
NatHERS is administered by the Australian Government on behalf of state and territory governments. It has been providing ratings for new homes since 1993 and, since 2003, it has supported the minimum energy efficiency requirements for new homes.
NatHERS works by accrediting various tools that can be used to measure and rate a home’s energy efficiency. Through the accreditation process, each tool is checked to confirm that its calculations and outputs align with the NatHERS Benchmark Tool. The tools provide a consistent certificate or report with a rating and other energy efficiency information.
In this way, NatHERS acts as a ‘measuring tape’ for rating the energy performance of Australian homes. A detailed NatHERS assessment of a new home currently provides a whole-of-home rating and a thermal rating based on house plans.
Tools for assessing the energy performance of existing homes are also being developed.
CSIRO is establishing a NatHERS Benchmark Tool for rating existing homes, against which other tools will be tested and accredited or benchmarked.
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The Home Energy Ratings Disclosure Framework Version 1
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References:
2 A Gasparrini, Y Guo, M Hashizume, E Lavigne, A Zanobet ti, J Schwartz, A Tobias, S Tong, J Rocklov, B Forsberg, M Leone, M De Sario, ML Bell, Y-LL Guo, C-F Wu, H Kan, S-M Yi, MdSZS Coelho, PHN Saldiva, Y Honda, H Kim & B Armstrong, ‘Mortality risk attributable to high and low ambient temperature: a multicountry observational study’, Lancet, 2015, 386:369–75.
3 NatHERS accredits tools that can measure and rate a home’s energy efficiency. State and territory governments use NatHERS for regulatory purposes to support the building industry to demonstrate compliance with the National Construction Code.
4 COAG Energy Council, Report for achieving low energy existing homes, Australian Government, Canberra, 2019.
5 G Moore, S Berry & M Ambrose, ‘Aiming for mediocrity: the case of Australian housing thermal performance’, Energy Policy, 2019, 132:602–610.
6 Australian Council of Social Service, Energy transformation, ACOSS website, n.d.
7 K Wrigley & RH Crawford, ‘Bridging the gap: energy efficiency improvements for rental properties’ [conference presentation], Living and Learning: Research for a Better Built Environment: 49th International Conference of the Architecture Science Association, 2015.
8 Australian Housing and Urban Research Institute, New social housing will be more energy efficient, but older houses are still costing us dearly, AHURI website, 2023.
