The Victorian government, if re-elected, wants to replace the subsidised Victorian Energy Efficiency Target with a voluntary home rating scheme called My Star.
However, environment groups say the proposal is seriously flawed and disadvantages low income people. They say 1.9 million homes in Victoria have a NatHERS ratings of two stars or less, with poor housing sometimes impossible to cool, and point to a report by Victoria’s Auditor General that found Victoria needed a comprehensive heatwave plan.
According to energy minister Russell Northe, government should “encourage people to make the right choices for themselves, not subsidise activities and drive up energy prices in the process”.
“That is why we are currently piloting the voluntary My Star Energy Rating Scheme that helps households identify the most cost effective ways to save on their energy bills and make their homes more comfortable,” Mr Northe said in a media statement. “The My Star Rating Scheme will also provide hundreds of job opportunities, particularly for many of the businesses currently participating in the VEET scheme.”
The program would provide house energy efficiency ratings provided by accredited assessors and be based on a 10-star scale.
A spokeswoman for Mr Northe told The Fifth Estate the program was currently in pilot “in and around Melbourne on a variety of homes including apartments”.
She said the availability of a star scorecard could promote voluntary action to improve household energy performance, with the greatest driver for participation being the desire to reduce bills, and to be competitive in the property market when selling or leasing a house.
“The star scorecard will deliver a valid 10 star energy rating which estimates the average cost of energy for key features of a house, including a rating of performance in hot weather,” she said. “The star scorecard will include suggestions for a range of improvements that householders can undertake to increase their home’s star energy rating.”
The scheme is voluntary, and besides providing the accreditation framework for assessors, the government isn’t providing any financial incentives for upgrades.
“The scheme will be a user pays scheme to avoid the cross-subsidisation of non-participants that occurs under the VEET scheme,” she said. “The cost will be determined by the market.”
The spokeswoman for Mr Northe said consultation with industry had yet to occur.
“However if re-elected the Victorian Coalition Government will undertake a consultation with stakeholders before rolling out the full scheme statewide,” she said. “It is anticipated these peak bodies may include the Property Council of Australia, the Real Estate Institute of Victoria, the Master Builders Association of Victoria, the Housing Industry Association, the Association of Building Sustainability Assessors, Building Designers Association of Victoria, Australian Sustainable Built Environment Council, Consumer Utilities Advocacy Centre, Consumer Action Law Centre, Environment Victoria and Victorian Council of Social Services and Energy Safe Victoria.”
Environment group unimpressed
When the government first came to power in 2010, it had an election promise to raise existing household energy efficiency to five stars.
Anne Martinelli, One Million Homes campaign coordinator for Environment Victoria, said this hadn’t happened, and the My Star program would do little to progress energy efficiency and do nothing at all to address the barriers low income households had in getting more energy efficient housing – namely upfront cost hurdles.
“Unless you’re doing something that tackles these barriers, low income households won’t see a lot of value,” Ms Martinelli told The Fifth Estate.
“The rating tool is really just sticking with the age old easy model of saying, ‘Here’s some information; do with it what you will.’ It fails to understand it’s not just a lack of information. It’s really practical hurdles that people face around not being to afford those upfront costs.”
She said there were 1.9 million homes in Victoria that had NatHERS ratings of two stars or less, and a high proportion were low income households, who tended to live in the poorest quality housing.
Not only were these households spending money on electricity unnecessarily, but it was also becoming a health issue, with poor housing sometimes impossible to cool, and with Victoria’s increasing heatwave deaths, measures were needed to protect the vulnerable.
A recent report by Victoria’s Auditor General found that Victoria needed a comprehensive heatwave plan. Environment Victoria thinks this plan needs to include a way to raise housing thermal performance.
“These houses are not providing adequate shelter,” Ms Martinelli said.
The time had come, she said, to see energy efficiency and thermal performance as “no less important than having a landline” or sewerage, and people needed to start talking about minimum standards in the existing housing market.
“[Energy efficiency] was not an issue in the past,” she said. “It is now. It’s now reasonable to say houses need to have reasonable energy efficiency.”
Environment Victoria’s One Million Homes plan calls for extensive retrofits of the existing housing stock, with subsidies for those on low incomes, as well as minimum standards at point of sale or lease.
Success of ACT’s disclosure scheme
Disclosure of energy efficiency schemes can push forward energy efficiency, as the ACT’s mandatory Energy Efficiency Rating scheme has shown, which incorporates existing properties.
A review of the EER conducted a few years ago found it provided multiple benefits.
For property owners, a one star improvement translated to a three per cent increase in market value, the review found, meaning cheap energy efficiency upgrades could realise big increases in value.
For consumers, disclosure of EER helped inform decisions on house purchase or lease, as better EER has reduced operational energy costs and greater thermal comfort.
For the real estate industry, a more efficient market was created through the mandatory scheme, because all players had information about property energy efficiency, leading to more accurate property valuations.
And for the building industry, the report said mandatory disclosure encouraged new residential buildings to be created above minimum energy performance requirements.
Whether a voluntary system can see these benefits realised is another question.
Ms Martinelli said that Environment Victoria supported a mandatory scheme but that it still excluded those with little market power, like renters in low vacancy markets, where there was little choice.
Cecille Weldon, head of sustainability at LJ Hooker, told The Fifth Estate in an article on the company’s Liveability rating scheme that LJ Hooker supported a national mandatory disclosure program, and that the piecemeal approach of states was not effective.
Economist Dr Veronika Nemes from the University of Melbourne, however, is sceptical that a voluntary or even mandatory rating system is the best solution. There was, she said, already a voluntary market available. Home owners can, if they choose, already use private services to get a home energy rating for around $300-500.
That not many people were opting for this before making such a big purchase as a house was an indication that home energy efficiency is currently not a major consideration for most consumers, in contrast to things like location, Dr Nemes said.
“And if the government were to lower the cost of assessment, it would be shifting cost from private homeowners or landlords to the taxpayer.”