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Construction change could save you $450 a year on energy bills

Composite image of a woman cleaning an air conditioner and a regional housing estate.
Heating and cooling homes could become less expensive with improved construction regulations. (Source: Getty)

Australians could save an average of $450 a year on their power bills if improved energy-efficiency standards are adopted.

That’s the finding of a new report by Climate Council, which analysed what an all-electricity 7-Star energy-rating mandate in capital cities would mean for homeowners.

Warning Australia’s homes were “energy guzzlers” when compared to comparable international temperature zones, the council argued improved minimum standards of construction would help both the hip-pocket and the environment.

But it’s not just homeowners who would benefit. If recommendations in the Tents to Castles report are adopted by government, Climate Council also wants to see minimum standards for rentals and social housing.


Another recommendation is a phase-out of gas from new housing developments by 2025, along with the adoption of incentives to replace appliances that rely on the fossil fuel in existing homes.

What are home energy star ratings?

Energy star ratings were first adopted in 1993 by the Commonwealth’s Nationwide House Energy Rating Scheme (NatHERS).

Accredited software is used to model expected indoor temperatures, based on design, climate and expected usage.

Factors in determining a rating of between zero and 10 stars include location, construction type, orientation, size and building materials.

A partially rundown house.
Rental homes and social housing are often more expensive to heat and cool. (Source: AAP)

Climate Council estimated the greatest savings from 7-Star adoption would be in the Northern Territory at $945 a year, with Brisbane seeing the least annual savings at $119.

Economic and health impacts for homes that are too cold or hot

Worldwide events like the COVID-19 pandemic and Russia’s invasion of Ukraine can result in energy price spikes, which can create financial pressure on households.

Keeping home temperature regulated has never been more important, with many Australians continuing to work at least in part from home.

As the climate crisis worsens, the weather is expected to become more extreme and the cost of keeping our homes at a liveable temperature will increase.

Composite image showing flooded land on the left and a helicopter dropping water on bushfires.
Extreme weather is set to make cooling and heating homes more expensive. (Source: Joanne Fraser / Getty)

Climate Council health expert Hilary Bambrick told Yahoo Finance renters and marginalised Australians were most likely to suffer the worst impact.

“One of the big issues we have here is the poor standard of rental homes and social housing,” Bambrick said.

“That means that you've got large numbers of people, often more vulnerable people with underlying chronic conditions, aren't able to keep their homes at a safe temperature.

“Sometimes they may not be able to afford to heat or cool those homes, because they're just so energy inefficient.”

How Australia ranks on housing energy efficiency

Australia continuing to lag behind the rest of the world on energy standards is a key concern of the report’s authors.

The nation’s ageing, decade-old, six-star system is likely contributing to Australia being ranked 18 out of 25 for energy performance among the world’s top consuming nations including China, Poland and Mexico.

Standards for homes in Australia remain 40 per cent worse than comparable climate zones in Canada, the US and UK.

While Australia’s residential energy demand has grown 21 per cent in two decades, France and UK have dropped theirs by a third.

The European Union will further reduce energy demand with legislation to ensure homes are either net zero through energy performance or powered entirely from renewable sources.

With an expected 1.1 million homes to be built in Australia by 2027, the economic benefit of mandating a 7-Star system could be enormous, particularly when it comes to reducing emissions.

Depending on the cost of carbon, Climate Council estimated building all homes to this standard could create an economic benefit of up to $3.5 billion over 10 years.

State and territory ministers are set to meet in July to review minimum energy efficiency standards for new home builds.

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