Energy Efficiency and Energy Ratings

During the conference, numerous ideas were tabled that could significantly reduce emissions including lighting changes, better usage of heat pumps and a range of options for retro fitting homes. One topic that was also raised was the lack of equity in achieving energy efficiency. In order to achieve our emissions targets, we need to provide options for all Australians.  

A 2019 OECD working paper detailed that 30% of houses in New Zealand were poorly insulated. New Zealanders at the time had the highest incidents of respiratory illness in the OECD1,  and the paper suggested that “40 000 hospital admissions per year could be avoided”. 

The New Zealand Government, the largest single home provider through social housing, understood its responsibility and commenced updating housing. This action alone allowed energy efficiency businesses to invest and flourish due to the security provided by the volume of work.  This then resulted in a flow on effect in the private housing market, followed with banks providing interest free or low interest loans, encouraging homeowners to update the energy efficiency aspects of their house. 

In 2023, the discussion is now about mandatory disclosure. This is where a landlord or a selling property owner would need to disclose energy efficiency ratings prior to lease or sale.  

Through the recent Federal Budget, the Australian Government has allocated funds to modernise and expand energy efficiency standards. This will include expanding the Nationwide House Energy Rating Scheme to cover existing homes as well as new builds.  

Ratings systems, and the tools used in assessing efficiency, vary in different parts of Australia. While this is not climate based, some states and territories vary from the national model, leading to confusion and lack of trust for the consumer. Another area that is inhibiting the industry is the limited numbers of qualified skilled technicians available.  

Yet when a system is in place, such as in the ACT, houses with high energy efficiency ratings are attracting a 10% premium at the time of sale.  

Let’s hope the New Zealand example is front of mind in modernising and expanding energy efficiency standards for Australia and altruism prevails. Perhaps it might even assist in reducing the burden on our health system! 

1.Baker Andrew (2019), “Improving Well-being through better housing policy in New Zealand” Economics Department Working Papers No: 1565, pp 10 OECD Publishing