With costs a priority, data reveals 7-star natHERS ratings benefit new homeowners
Australia’s 7-star energy ratings benefit homeowners significantly,
Australia’s enhanced energy efficiency ratings for new homes are gradually being implemented across the nation.
Initially announced in 2022, the National Construction Code (NCC) increased the minimum energy rating from 6 to 7 stars.
This change applies when utilizing the Nationwide House Energy Rating Scheme (NatHERS) for newly constructed homes.
Historically, Australian homes have struggled with inadequate insulation, particularly given the country’s diverse and often extreme climate.
As a result, this has led to discomfort and high costs for heating and cooling.
The new 7-star standard aims to improve energy efficiency significantly.
Moreover, it contributes to Australia’s broader goal of achieving net-zero emissions by 2050.
NatHERS currently offers a rating scale of up to 10 stars.
It evaluates various factors, including a home’s design, construction materials, walls, insulation, windows, and roofs.
However, some builders express concerns that the new standards may impose a significant financial burden on them.
For instance, the Housing Industry Association (HIA) estimates that additional costs for building a new home in New South Wales could range from $20,000 to $40,000.
In contrast, recent data from The Australian Glass and Window Association (AGWA) disputes these figures, indicating upgrades typically cost around $4,300.
Australians generally place a strong emphasis on energy efficiency when selecting their homes.
According to the PropTrack Origin Australian Home Energy Report, 77% of prospective buyers consider energy efficiency ratings essential in their search.
This focus on efficiency is largely driven by the potential for reduced power bills.
Furthermore, data from NatHERS and CSIRO reveals that over 75% of new homes in New South Wales now achieve ratings above 7 stars.
As the new standard aims to enhance comfort and sustainability, homeowners may wonder where they can realize cost savings.
Increase in building costs – fact or fiction?
As most states adjust to the new standards, builders and industry groups across Australia acknowledge the rise in upfront costs.
The Australian Glass and Window Association (AGWA) recently reported that the average cost has increased by $4,300 per home.
In detail, the averages are $2,972 in Brisbane, $5,905 in Melbourne, $4,262 in Perth, and $4,105 in western Sydney.
Davina Rooney, the chief executive officer of the Green Building Council Australia, emphasized that these costs will be offset by energy bill savings.
Specifically, homeowners can expect to save around $326 per year on energy expenses.
When considering the average outlay of $4,300 over a 30-year mortgage, the additional building cost amounts to $143 per year.
However, with annual energy savings of $326, homeowners effectively save a minimum net of $183 on their energy bills each year.
The average figures consider the least favorable orientation for each house and the glazing requirements for those orientations.
In other words, this analysis examines the worst-case scenario from an energy efficiency perspective.
This information comes from a new report titled “7.0 Star Cost Upgrade Analysis.”
The report analyzed more than 50,000 NatHERS simulations to derive its findings.
It compared homes with minimal window areas, typical of market volume builds, to those featuring larger window areas found in architectural designs.
If your home is a custom or architectural build with many large windows, the costs will likely be higher.
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Achieving long-term savings and comfortable living
The Green Building Council Australia states that upfront costs will be balanced by energy bill savings of $326 annually.
“These upfront costs represent a smart investment,” Ms. Rooney explained.
Homeowners will experience not only reduced energy bills but also enhanced comfort in their living spaces.
Furthermore, the improved energy efficiency of these homes is projected to decrease carbon emissions by 18-28%.
This makes the investment beneficial for both the environment and household budgets.
Additional research indicates that the extra construction costs required to meet the new standards are expected to be minimal.
In comparison, the energy cost savings over the lifetime of a new home and an average 30-year mortgage are significant.
Using design to minimize costs
Incorporating smart design early in the home building process can help achieve a 7-star rating without significant extra costs.
One of the most crucial methods to accomplish this is by optimizing the home’s orientation.
The direction your home faces can greatly influence its energy efficiency.
Ideal orientation varies based on your climate and location within the country.
For many Australian homes, north-facing orientations are highly valued.
“Since the sun’s path in Australia is toward the north, the orientation primarily depends on whether the living areas face north,” explained yourhome.gov.au.
North-facing rooms enjoy sunlight for the longest duration during winter while being easily shaded by roof eaves in summer.
Additionally, taking advantage of passive heating in winter and shading in summer can be vital.
This can be achieved through improved insulation in ceilings, walls, or under floors.
Moreover, high-performance windows are essential for insulating the home against heat loss in winter and heat gain in summer.
“Although glazing improvements are necessary, high-performing windows can significantly lower a home’s energy consumption and running costs,” said AGWA executive director Clinton Skeoch.
“With proper planning and guidance, new homeowners can integrate design features and material choices that greatly enhance their home’s rating without excessive costs.”
