The cost of upgrading Melbourne’s poor-performing homes from 1.5 star NatHERS to four stars could be paid off in energy savings in nine years, according to new research from the University of Melbourne, while a six-star upgrade would take 14 years.

More than 95 per cent of Australia’s housing was built before the introduction of minimum energy efficiency regulations for residential buildings in 2005. And while residential housing efficiency has gradually improved since the introduction of minimum standards in 2005, old housing is only being replaced at a rate of three per cent a year.

This means existing housing will continue to pose a large climate, energy and health problem, regardless of minimum standard increases. Housing built before 1990 has on average a performance of just 1.5 stars, and that built between 1990 and 2005 is at 3.14 stars.

University of Melbourne Department of Infrastructure Engineering Professor Greg Foliente looked at the composition of Melbourne’s housing stock over 31 local government areas to determine the costs involved in upgrading housing to the current six-star standard, and options for five-star, four-star and three-star retrofits.

He found that raising buildings to the six-star standard would cost between $42,000-$63,000 for a typical detached house and $9000-$18,000 for semi-detached, depending on age. But doing this would have massive benefits in terms of operational energy savings and greenhouse gas emissions (not to mention health and comfort).

“Bringing the city’s housing stock to a six-star energy rating would lead to a 73 per cent reduction in greenhouse gas emissions and significant cuts to electricity bills,” Professor Foliente said.

“This would save the city about 2.35 terawatt hours per year in heating and cooling, equating to around $3784 million.”

Aside from the obvious environmental outcomes, he said homeowners were missing an opportunity to save money in the long term if they didn’t consider retrofits. And, strangely, there’s no penalty for aiming higher between 3/4 star retrofits and 5/6 star retrofits.

“It’s better to aim for an energy rating of four rather than three, or six rather than five, because the cost difference is minimal and the payback time around the same.”

In fact, a five-star retrofit would take longer to pay back than six star because they both cost similar amounts, but the six-star house uses less energy.

Professor Foliente said point of sale energy ratings – which the Victorian government is looking into – could help the transition to better-performing existing dwellings.

“If it [were] a requirement, it would be reflected in house prices,” he said.

“If you’re choosing between house A or house B in the same location, where both have been renovated but one has a higher energy efficiency rating and therefore lower operating costs, then of course that’s the one you would choose.”

Retrofitting to a six-star standard would include a number of measures such as improving air vents, installing ceiling and wall insulation, and double glazing and external thermal curtains.

Professor Foliente said retrofits could involve relatively cheap fixes such as improving seals around doors and windows, which could cost just $15 a square metre. Five and six-star retrofits necessitated more expensive solutions like double glazing and high levels of insulation.

The study also said it was important to take embodied energy into account when making retrofit decisions.

For a three-star upgrade, embodied energy was 19 per cent of annual energy use, while for a six-star upgrade it was about 30 per cent.

“We need to think about the balance between the savings in energy and greenhouse gas emissions brought by a product or solution used in a retrofit and the embodied energy of that same solution,” Professor Foliente said.

“A product or solution that lowers operating energy costs may have actually cost a huge amount of energy in production.”

2 replies on “The case for upgrading Melbourne’s poor housing stock”

  1. Great stuff, and love that it takes into account embodied energy!
    Just curious as to whether it takes into account the actual comfort conditions that people tolerate in their homes or assumes total comfort? E.g. Many live in cold and hot homes under free running conditions, or input low levels of heating in winter and perhaps to isolated (living) zones. They would obtain comfort from these measures with very little actual impact on energy use.

  2. Great insight re embodied energy considerations.
    So perhaps a first order priority is to ensure/monitor New construction actually operates at or exceeds NCC Section J requirements so that we aren’t repeating the mistakes of the past. Maybe lending institutions could play a role here as they do have an interest in sustainable mortgage repayments?

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