What the new 7-star energy rating means for home builds

Jarrod Brown
By Jarrod Brown
6 Min Read

Last week, the ACT became the first state or territory to make the 7-star National Construction Code mandatory, but what does that mean for Aussie builds?

The next iteration of Australia’s National Construction Code (NCC) looks to become mandatory in most parts of the country in May this year, promising to push the current energy rating of new homes from 6 to 7 stars and enforce important efficiency measures.

This is great news, as the new-and-improved guidelines mean the homes built today will be more comfortable to live in all year round and (in theory) cost less to run, both now and into the future.

Minister for Sustainable Building and Construction Rebecca Vassarotti said that as the first jurisdiction to completely embrace the new standards, the ACT is setting the benchmark for developers and builders across the country to deliver sustainable, high-quality homes for years to come.

“The rules in the 2022 National Construction Code are a fantastic tool for the ACT Government to make developers deliver better buildings in Canberra,” Minister Vassarotti said. 

“These new reforms are part of a bunch of changes we’re spearheading to make living in our city even better for everyone. 

Aussie homes are responsible for 7.9 per cent of all energy use, 29 per cent of all electricity use and 11 per cent of all greenhouse gas emissions, so making them more energy efficient can cut household energy bills and emissions but a sizeable chunk, as well as provide better protection from extreme climate events like heatwaves.

For a nation caught in the midst of a widespread cost-of-living crisis, paying less for household bills sounds like a welcome change, but what does that shift from 6-7 stars actually mean for homebuilders already struggling to afford materials?

What’s really changing

These new standards call for minimum energy efficiency for a new home to reach 7 stars out of a possible 10 through the Nationwide House Energy Rating Scheme (NatHERS). 

The rating measures the amount of energy needed to heat and cool a home, with adjustments for different climate zones. In most locations, the increase means it will take 20 to 25 per cent less energy to heat and cool a home.

The changes to the NCC will also introduce a new ‘Whole of Home’ approach. Alongside the minimum 7-star rating for thermal efficiency, a new ‘energy budget’ that takes into account efficient appliances and solar energy will also be applied. 

The energy budget sets a maximum annual energy use for heating and cooling, hot water and lighting (and swimming pool and spa pumps) that can be offset by adding solar panels to the home.

A Whole of Home assessment can predict whether a home will be ‘Net Zero’, meaning that over a year, it will produce the same amount of energy as it consumes (or even more) – definitely something to aim for.

Choosing energy-efficient appliances such as heat pumps for hot water can help meet the new Whole-of-Home annual energy budget.

Will it cost more for 7-star builds?

With the shift to 7-star standards, some building industry groups are rightly worried that the changes would only put more financial pressure on already tough builds. 

But, according to the Victorian government, learnings from the introduction of the 6-star standard suggest that the industry will, in fact, adjust quickly and at a low cost.

In many cases, the extra star boost mainly boils down to designing the homes from the start with passive solar principles. Nine times out of ten, this most cost-effective change will be as simple as designers optimising the home’s orientation to provide appropriate shading from the summer sun and optimising exposure to solar panels. 

This means that in most builds, it’s business as usual. Builders can use the same materials, construction methods and timelines to follow a simple, slightly altered design that aligns with the home’s specific energy needs. 

For homes outside the design phase or subject to poor sun orientation, it’s a different story. In these cases, builders might have to implement improved ceiling, wall or underfloor insulation to suit the local climate and high-performance glazing to better insulate the home.

According to ACT’s Minister for Water, Energy and Emissions Reduction, Shane Rattenbury, these changes are vital to combat the extreme weather challenges ahead in Australia’s future. 

“Improving energy efficiency in our homes is critical to making sure that homes are safe, affordable and comfortable year-round,” said Rattenbury. 

“The ACT Government is committed to improving energy efficiency in homes through reforms like these, as well as minimum energy efficiency standards for rental properties so homes are properly insulated and protected.”

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Jarrod Brown combines his background in journalism, copywriting and digital marketing with a lifelong passion for storytelling. He has a strong passion for new and emerging consumer technology within the building sector. He lives on the Sunshine Coast - usually found glued to the deck of a surfboard.