New homes throughout Australia will need to achieve 7-star energy ratings after building ministers agreed to include a proposed upgrade to energy efficiency requirements in the 2022 update of the National Construction Code.

And homes will also need to meet a new standard on accessibility as the ministers had previously agreed.

But the timeline for mandatory adoption of the new code has been pushed back in order to give the industry time to prepare for the new requirements.

In their latest semi-annual meeting held last Friday, state and Commonwealth building ministers considered final aspects of the 2022 update of the National Construction Code (NCC 2022).

In their communique issued after the meeting, the ministers announced that they had agreed to implement proposed changes in relation to energy efficiency and condensation management as part of the update.

Under the changes agreed to on Friday:

  • All new residential dwellings will need to achieve the equivalent of 7-star thermal performance under the Nationwide House Energy Rating Scheme (NatHERS). At the moment, new homes need to meet 6-star standards.
  • New homes will also have a new annual energy use budget which applies to major appliances such as space conditioning, lighting, pool, spa pumps and any on-site renewables.
  • Enhanced condensation management provisions will be incorporated into the Code. This will include additional ventilation and wall vapour permeability requirements.
  • New provisions will be introduced regarding the design of new Class 2 to 9 buildings (apartment complexes, commercial buildings and public buildings) to allow for easy retrofit of on-site renewables and electric vehicle charging equipment. This includes provision of base infrastructure for future cabling and control point installation at the time of construction.

The changes agreed to last week come in addition to other amendments to which ministers agreed in previous meetings.

Of these, the most significant involves the introduction into the Code new requirements for livable and accessible housing in new homes and apartments based on silver level standards in the Livable Housing Design Guidelines.

This will require new homes to have step-free travel and entrances, wider internal doors and corridors, a ground floor toilet, a hobless shower recess, reinforced walls to support grabrail installation and stairways which are designed to reduce injury and enable future adaption.

Meanwhile, ministers agreed to delay implementation of the new code.

Whereas the new version of the Code was previously set to come into effect on September 1 (a date which had been pushed back from May 1 on account of COVID), ministers have now agreed that:

  • The new Code will be available for those who want to use it from 1 October this year; and
  • NCC 2022 will commence from 1 May 2023. However, a transition period will apply in respect of residential energy efficiency, condensation mitigation and livable (accessible) housing until 1 October 2023.

The delay took account of advice from the Australian Building Codes Board (ABCB) and senior officials for a coordinated transition and implementation of the new code. Particularly in light of the degree of change in energy efficiency and accessible housing, ministers felt it was important to ensure that the industry is prepared to deliver the changes prior to the Code’s commencement.

Ministers also stated that individual jurisdictions may make modifications to implementation of the changes to address local circumstances such as condensation, renewable energy capacity and local climatic conditions – a move that has drawn caution from some industry bodies who warn of the importance of nationally consistent requirements (see below).

The latest agreement comes amid long-term efforts by the Commonwealth and States to progressively amend the Code to improve energy efficiency in new buildings under the Trajectory for Low Energy Buildings which was agreed to in 2018.

As part of that, ministers agreed that there would be an increase in the stringency of energy performance requirements for commercial buildings in the 2019 update of the NCC and for residential buildings in the 2022 update.

The new provisions represent the first upgrade of the stringency of energy efficiency requirements in new homes and apartments since the move to mandate 6-star NatHERS rating performance (up from 5 stars) in 2010.

From many quarters, the new requirements enjoy widespread support.

Earlier this month, more than 100 companies, organisations and housing service providers joined forces to publicly call for 7-star homes.

The call was led by the Property Council of Australia, Renew, the Australian Council of Social Service, the Green Building Council of Australia, the Energy Efficiency Council, Energy Consumers Australia, the Australian Sustainable Built Environment Council, and the Climate Council. The statement was signed by more than 100 organisations including architects, health advocates, property developers, charities and social housing providers.

In their statement, the organisations argued that the new standards would:

  • save the average household more than $576 per year on energy bills
  • save up to 15 million tonnes of greenhouse gas emissions by 2030 and up to 78 million tonnes by 2050
  • reduce the cost of necessary electricity grid upgrades by up to $12.6 billion by 2050
  • reduce the number of heat related deaths throughout Australia; and
  • reduce poverty and inequality as those who live in any newly constructed social housing and private rental will benefit from cheaper energy bills and better health outcomes.

Others, however, have raised concern about the cost and difficulty associated with building to 7 stars.

In a Consultation Regulatory Impact Statement (Consultation RIS) which it prepared last year as part of consultation process, ACIL Allen Consulting found that costs associated with the move to seven stars outweighed the benefits by either $1.795 billion or $2.366 billion (a factor of three or four to one) depending on which of two considered options which was adopted.

In opposing the proposed changes in its submission to this Consultation RIS, Housing Industry Association (HIA) warned that the cost and difficulty in meeting the 7-star standard across all climate levels should not be underestimated.

In fact, HIA argues that the costs referred to in the Consultation RIS are understated.

Whereas moving to 5-star and 6-star levels was generally achievable in a cost-effective way under existing building methods by using the highest insulation levels in standard wall and roof/ceiling cavities along with higher performing window glazing in moderate and cooler climates, HIA says that moving to 7-star homes will in most cases require significant and costly design changes.

As a result, many standard house designs which are currently in use will need to be scrapped altogether.

This, HIA argues, may lead sub-optimal design outcomes.

In detached housing, these could include all houses looking the same with squares or rectangles and no courtyards or return wall to limit exposed wall to atmosphere and a move away from large expanses of windows as the window to floor ratio returns to 22 percent. (HIA argues that Australia currently does not have any window specification which will meet seven stars yet still allow for the large windows in a custom design).

For apartments, HIA argues warns that a 7-star rating would similarly add excessive costs and design challenges on account of the window to floor area ratio within many apartments.

Whilst the higher rating could be achieved by having larger sections of cladding in lieu of window/glazed facades, this would mean compromises in terms of national light, views, overall amenity and livability.

Indeed, HIA argues that household energy performance regulation should move away from a simplistic focus on star rating levels for thermal performance of the building envelop and instead adopt a whole of house approach along similar lines of the BASIX system in New South Wales.

Whilst it acknowledges that the new household energy budget for home appliances attempts to do this, HIA says the approach taken in the changes has shortcomings as it simply takes existing code requirements for the building fabric and appliances and applies a higher stringency in respect of both.

Instead, it argued that a broader range of options to move toward a net zero code should have been considered.

In their communique, building ministers said that the tighter energy provisions would save on household energy bills, improve amenity and support Australia’s transition to net zero emissions.

“After acknowledging the extensive input from key building industry and advocacy stakeholders over several years, Ministers considered the Decision Regulation Impact Statement (DRIS) prepared by the ABCB on upgraded residential energy efficiency provisions and agreed to include those provisions in NCC 2022,” the communique read.

“Building new energy efficient homes supports the economy’s transition to net zero emissions by 2050.

“The key changes are adopting a minimum standard of 7 stars and the introduction of an annual energy use budget. For the average new home, achieving a 7-star rating may require elements like better insulation, higher quality glazing and smarter floor plans. Meeting the annual energy use budget requires consideration of the efficiency of the appliances used in new homes and rooftop solar and batteries. While this will differ from house to house depending on factors like climate, orientation and construction materials, Ministers recognised that overall these changes will improve amenity and drive down energy bills in new homes.”

Despite concern from some mentioned above, others welcomed minster’s decision.

Shannon Battisson, National President of the Australian Institute of Architects, said the energy-efficiency changes would support national efforts to achieve net zero emissions by 2050.

Battisson says residential buildings account for 24 percent of overall electricity use and 12 percent of total carbon emissions throughout Australia.

“These practical improvements to Australia’s building code will support national efforts to reduce carbon emissions and builds a stronger legacy for residents, communities and the environment,” Battisson said.

Battisson added that the new design standards for accessible housing will provide confidence for Australians as they age that they will be able to age in place – especially if they build or buy a new home or undertake renovations – and will provide greater choice for those with disability about where they choose to live.

This is particularly important for the more than half a million Australians who require assistance with their mobility.

Meanwhile, Property Council of Australia CEO Ken Morrison said the higher energy standards will deliver lower energy costs, better living conditions and lower emissions.

“It is great that after years of work and advocacy on this matter, Ministers have made the commitment to improve the efficiency of all new homes built in Australia,” Morrison said.

“Lifting the energy rating from 6 to 7 stars has the potential to slash the average household energy bill by up to $576 a year, so for homeowners and renters alike, a 7-star home means big savings, as well as higher levels of comfort.”

However, Morrison expressed caution about leaving open of adjusting some details of the new Code across jurisdictions.

Instead, he urged ministers to remain consistent in their application of the code across jurisdictions.

“The National Construction Code is in place as a national agreement for good reason,” Morrison said.

“We are one country, and when there is inconsistency, there is greater cost for industry and consumers.”


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