Energy efficiency in residential buildings plays an important role in lowering energy bills for households, ensuring energy security and affordability, and addressing climate change. It also improves the comfort and health of occupants, saves energy and reduces wastage for the wider economy, and reduces the risk of blackouts by reducing peak demand.

Most buildings in Australia are only built to the minimum energy efficiency requirements in the National Construction Code (NCC). This misses cost effective opportunities to lower energy bills for households, as new energy efficient technology costs have been falling considerably in recent years, while energy prices have been rising. These requirements have also not been updated since 2010.

As part of the National Energy Productivity Plan (NEPP), the Council of Australian Governments’ (COAG) Energy Council (the Council) agreed to consider changes to the NCC to achieve better energy efficiency outcomes for Australia’s buildings. Energy efficiency requirements in the NCC are a key mechanism for delivering the NCC’s ‘Sustainability’ goal, while also supporting its ‘Health’ and ‘Amenity’ goals.

The Trajectory for Low Energy Homes project considered opportunities for the NCC in the context of a broader trajectory for the residential building sector. This Report brings together the findings from this project, which was developed cooperatively between Commonwealth, State and Territory Governments, and identified cost effective opportunities for energy efficiency improvements throughout the building system, from thermal performance to appliance energy usage and renewables.

This Report acknowledges the strong calls from energy consumer groups and many in the building and building products sectors to improve the affordability of operating new and existing homes. Extensive stakeholder consultation was conducted over a one year period with over 220 stakeholders engaged through this process, consisting of representatives from a range of sectors including: building and property, appliance and technology, energy supply and distribution, household energy consumer advocacy groups, academia and different levels of government. A summary of comments received from stakeholders is included at the end of this Report.

Also considered for this Report was the Australian Sustainable Built Environment Council (ASBEC) and ClimateWorks Built to Perform report, which was released in July 2018 and supported by the 27 industry members of ASBEC. It produced similar findings to what is in this Report, but also identified additional cost effective opportunities, such as improving building sealing and lighting energy efficiency. It is recommended these opportunities be considered for inclusion in the NCC along with those identified in this Report.

A cost benefit analysis of different scenarios and energy modelling for different climate zones was conducted as part of the Trajectory for Low Energy Homes project, using a relatively conservative methodology. Cost effective opportunities for energy efficiency were identified throughout the building system, from thermal performance to appliance energy usage and renewables, and this has formed the basis of the recommendations in this Report.

The Council will consider in late 2018 the recommendations in this Report, along with other relevant information, and establish its forward policy for energy efficiency in residential buildings, noting the analysis of costs and benefits used to inform this Report is not a Regulatory Impact Statement (RIS) and a comprehensive RIS process will need to be conducted prior to any changes to the NCC.