Australian housing for decades has had very low national standards for energy efficiency. Despite this, housing industry lobby groups have consistently argued that any changes will lead to little benefit and excessive costs – that they are simply red tape that impacts negatively on housing affordability.

With more than a decade since the introduction of the 5 Star Standard for residential energy efficiency in Victoria, it’s timely to reflect upon the extent to which the standard is delivering its intended policy objectives, and whether consumers are realising the benefits of better-designed buildings.

The State of Victoria led the nation by introducing housing insulation regulations in 1991. Raising the regulatory stringency bar from a notional three star NatHERS base level to five stars a decade later as part of the Victorian Greenhouse Strategy would not have been seen as a radical policy initiative at the time.

Nevertheless, the housing industry objected vehemently. One senior industry executive was quoted as saying “it could cost up to $10,000 per house to implement, which could cut out a significant section of the population from home ownership” and even that “builders may stand as candidates in the next State Government election to campaign against increasing regulations and costs for new homes”.

Robert Enker
Robert Enker

As part of my research for the Cooperative Research Centre for Low Carbon Living, I recently undertook an analysis of the 5 Star Standard to see whether it has measured up as a policy instrument for greenhouse abatement, and if industry concerns about impacts to housing affordability and damage to the state’s housing market have been borne out.

The analysis used current building industry statistics to assess the impacts of the standard on Victorian residential greenhouse emissions and on housing market performance. The trajectory of compliance costs was tracked on the basis of a series of relevant studies published over the last decade.

Results were very encouraging, both in relation to the standard’s effectiveness and the consequent potential for regulatory reforms to building energy standards in the National Construction Code.

It was apparent that principles of regulatory best practice had been followed in practice, and that policy outcomes exceeded original targets for greenhouse abatement. Compliance costs in terms of upgraded building design and construction not only fell below original government estimates, but also progressively diminished over time as anticipated industry learning processes kicked in.

Concerns about negative impacts on housing affordability were therefore not substantiated, and there was no evidence of negative impacts on Victoria’s housing market.

Of course that’s the good news. The bad news in relation to implementation of national energy efficiency provisions in the Building Code of Australia came out of recent analytical work on residential energy efficiency standards by the CSIRO and by consultant Pitt & Sherry for the National Energy Efficient Building Project.

These studies identified major shortcomings in the design and construction of new Australian homes, meaning that compliance with NCC energy efficiency provisions is being widely flouted, compromising government policy objectives and failing to deliver on consumer expectations when it comes to comfortable, cost-effective, energy-efficient homes.

Earlier research by the Victorian Building Commission (now Victorian Building Authority) discovered that, while the average rating of new homes actually exceeded the five-star minimum by a clear margin at building permit stage, design responses to the NCC’s performance-based requirements were sub-optimal. Building designs were brought into compliance through the shortcut of re-specifying existing designs rather than actually re-designing homes to take advantage of the performance-based NCC.

So in practice consumers are not getting sufficient value for money at the design stage, and the onus is now on state and territory building administrators to correct systemic flaws in the national building control regime. How effectively this issue is actually being addressed remains an open question.

Still, the overriding message is clear: building energy efficiency standards are potentially a very effective instrument for delivering on triple-bottom-line policy objectives – economic, environmental and social.

Of course, to fully realise their potential they must be supported by an effective enforcement regime coupled with well-resourced industry capacity-building and comprehensive cultural change processes. Fear campaigns by housing industry lobby groups have been just that.

The Australian public deserves better housing energy efficiency.

Robert Enker is a PhD researcher with the Cooperative Research Centre for Low Carbon Living and Curtin University Sustainability Policy Institute.

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  1. I am sorry to tell you this but has been a mandatory six star rating in Victoria for quite some time….

  2. Something we are not very good at in Australia is long term planning. Stephen totally support your comment.

    If you include the effects of climate change into home design long term planning is essential. We need to develop homes appropriate to our varying climates that will optimise comfort in all future homes. Dare I say in many cases it is ground up redesign not the cooking cutter approach as we have now with variations at the upper end.

    Then we have to bulk of homes built prior to 2000 another issue to be addressed if we are to make all buildings/homes more energy efficient and comfortable in all seasons.

    It does not matter what has gone before but what we see as the sustainable future. We have to be pragmatic about what we propose. We have to find a place between those proposing passive house certification and the basic certification (Basix NSW). I know it has to be a lot better than it is now.

    Personally it’s how we produce homes that can adapt to a worst case climate future.

    I know that any developments I will be involved in the future will find the sweet spot between environmental, social and economics. We will be building low impact sustainable urban communities and I would like to find people interested in doing the same

  3. The root cause of HERS failings is that there isn’t any reliable analysis of energy use in houses, where you know precisely what insulation levels are in the houses. Mr Enker does mention the bad news coming out of CSIRO 5 Star Evaluation (2013), and the Pitt & Sherry NEEBP report (2014).

    I provide some indicative revelations.

    The Evaluation of the 5-Star Energy Efficiency Standard for Residential Buildings – CSIRO Dec 2013
    Pg 17: “The CSIRO was contracted to evaluate the effectiveness of the 5-star energy efficiency standard for houses introduced in 2006, compared to the previous 3.5 to 4 star standard. Their work has culminated in this report, ‘The Evaluation of the 5-Star Energy Efficiency Standard for Residential Buildings. It is the first evaluation of energy efficiency standards for houses in Australia based on comparison of actual energy use in a large sample of houses. This comprehensive report has added to our understanding of how well energy efficiency star ratings in residential buildings actually work, for homeowners and builders alike. The study monitored the energy use of more than 400 houses (with around half the houses undergoing more detailed monitoring of heating and cooling) in Brisbane, Melbourne and Adelaide, from June 2012 to February 2013.”
    Key findings: page 81 TABLE 9-2
    Electricity cost increases for cooling in summer with increasing ceiling & wall R-values, when adopting 5+ star
    Adelaide 11%, Brisbane 28%, Melbourne 37%

    “a great deal of further measurement and analysis is required to enable effective decisions about the future of house cooling energy efficiency in Australia…For example, under what conditions do people turn on their air conditioners? What room temperatures are being achieved when the air conditioner is switched on?”

    NEEBP – Nov 2014

    Pg xii:
    Another policy issue consistently raised by stakeholders was the need for mandatory disclosure of building energy performance. It was felt that this would provide a much-needed focus on actual, whole-building performance and on existing as well as new buildings. It would also help ‘accountability’ through the supply chain by making performance outcomes more transparent to consumers.
    Pg 200: A building with two layers of reflective sarking in a ventilated roof cavity ? and no bulk insulation above the ceiling ? does not rate highly in many assessment tools or schemes but works well in the tropics.
    Pg 230: Some designers reported some material suppliers as “pushing ‘climate wrong’ products” due to their lack of understanding and desire to make a sale. Some respondents were also concerned that inappropriate use of materials was counterproductive and damaging to the broader reputation of energy efficient materials and policy aims in this area.

    I think one conclusion from the NEEBP report is to implement a star rating more suitable for the tropics, and that no bulk insulations be used. And sealed buildings are not suitable in the tropics.

  4. Spot on, Mr Enker has clearly highlighted the difference between what should be done for the common long term good, but is not done in the name of short term profits.

    Maybe the Victorian Building Authority should take a leaf out from the Japanese business model, “plan for the long term good of the company and the country”

    More of the same please Mr Enker.