When the 6 Star energy performance standard was introduced into the Building Code of Australia in 2010, many in the construction industry said it would break the bottom line.

However, as a report prepared by the Moreland Energy Foundation, WT Partnership, Building Environmental Assessment Company and Strategy. Policy. Research. has revealed that not only did the move add only marginally to construction costs, it is likely to that increasing performance requirements further to 7 Star would have negligible impact – and good design is the key to keeping costs under control.

The Changes Associated with Efficient Dwellings Project report was commissioned by the Federal Department of the Environment and Energy as part of work towards the National Energy Productivity Plan goals for residential dwellings.

The research combined 17 stakeholder interviews and a survey with 167 respondents from across the industry. There was also a quantitative component involving an analysis of 58 dwellings constructed since 2010 across all states and building typologies.

A key finding was that 34 per cent of builders reported initial cost impacts of less than $2000 or a cost-neutral effect (with a few actually saving money) complying with 6 Star (34 per cent), while others reported cost increases of between $2000 and $5000 (36 per cent) or more than $5000 (30 per cent).

One of the main ways builders or designers complied was through increasing the specifications for glazing or insulation. Others took a design-based approach, for example, reducing glazing-to-wall ratios, improving passive design or adding eaves for shading.

The design-based approach was particularly evident for apartments, where the use of an architect in the early stages of development made improving performance a no-cost element of design iteration, the report said.

Volume builders were also able to incorporate design changes as part of regular evolutions of their product designs by in-house design teams.

Design changes were experienced as a cost predominantly in detached dwelling, townhouse and project home sectors, as these projects may not have engaged an architect – so builders would need to engage a design consultant or the energy rater would need to make design suggestions.

A further complication for some project home builders is their arrangements with developers may necessitate them offering a range of designs that are orientation neutral.

“Anecdotally what this has led to is a trend since the introduction of the 6 star standard to spreading a number of moderate sized windows across a dwelling to reduce sensitivity to a poor orientation,” the report said.

“At the same time as this reduces the benefit of a north orientation to the rear of the property, it reduces the risk of a rating less than 6 star on a poorly orientated lot and having to increase the insulation and glazing specifications at cost. That is, designs are being optimised with the builder’s costs in mind, and not the lifetime running costs of the dwelling.”

Other key findings of the research include a need for capacity building in the industry in terms of understanding thermal performance. Capacity is a key factor in managing costs associated with increased performance stringency requirements.

Learning rate calculated

The report found a “learning rate” associated with increased performance requirements of about 7.5 per cent a year.

Principal of Strategy. Policy. Research. Phillip Harrington said the learning rate indicated the rate at which the costs of complying with the BCA 2010 code change fell over time.

The fall in costs has been driven both by changing designs, and by economies of scale for higher specification materials such as insulation.

SPR undertook the cost-benefit analysis and statistical analysis element of the research.

Mr Harrington said the analysis of the 58 dwellings that achieved 6 Star or more showed a broad spread of results in terms of costs, particularly for Class 2 (multi-residential) buildings.

“A lot of apartments already over-comply,” he said. Many are already achieving 8 or 9 Star, he said, depending on location in the building and individual apartment orientation.

That means if the rating requirement was lifted, those builders and designers would “not need to do a thing” differently to comply.

Design matters

He said he was pleased the research found that to achieve a given level of performance, “design really does matter”.

In terms of the distribution in terms of costs reported by builders, Mr Harrington said the cost impact really depended on the builder and how they were doing their projects.

There is a case for ensuring the training and professional development system is working, he said.

A report on compliance he was engaged on that was released in 2014 found that only NSW and Tasmania had mandatory professional development.

Compliance was also highlighted in the current research, with some stakeholders stating that increased stringency around compliance was crucial for ensuring what is built actually achieves the 6 Star standard or above.

Another issue flagged in the report was that the introduction of Certificate IV credential requirements for energy raters has in some cases separated building designers from the process – even though a designer that also undertakes the rating is in a position to test solutions for their performance as the design evolves.

Mr Harrington said the introduction of these requirements was “a bit controversial”.

Further research needed to deliver certainty

The research team concluded that further investigation was needed to really deliver certainty about their findings. However, Mr Harrington said he believed that was unlikely to happen in the near future.

The process as it was undertaken was “quite intensive”.

One pathway that could lead to a clearer national picture is CSIRO’s Energy Use Data Model (EUDM) project.

Mr Harrington said that as CSIRO is capturing data on every new dwelling completed since 2014, the information is building up into a “very important database”.

The EUDM project is integrating this data with other streams, such as smart meter data on household energy use, data on appliances, household demographics and other sources to create an online resource that can deliver information on actual energy use by households.

The pilot system is expected to launch this year, and CSIRO’s aim is that it will be useful for industry, government researchers to support energy forecasting and more informed energy policies.

Mr Harrington said he did not think the upcoming NCC 2019 would include an increase in residential thermal performance requirements.

However, some of the states are looking to “go out on their own” with increasing standards.

Apartment buyers have no idea what they’re getting, new research projects show

His consultancy is currently finishing a research project for the South Australian government in partnership with Marsden Jacobs on Class 2 standards, he said.

Early findings are that there is an “enormous spread of results”. A north-facing apartment with a single facade, for example, can reach 8 or 9 stars. However one in the same building on a southwest corner is “lucky to get 5”.

“The key thing from a consumer point of view is that consumers have no idea,” Mr Harrington said.

They are largely unaware of what orientation means in terms of thermal comfort and ongoing running costs.

“There’s a strong case for needing to rate every individual apartment and disclose that information,” he said.

The SA research is part of testing the case for higher standards in the state, he said.

The SA government plans on sharing the findings with the other states and the federal government.