Australian households could save up to $2,200 a year on energy bills by upgrading homes built before 2003 with better insulation and electrifying appliances and heating, a new report by Monash University’s Climateworks Centre says.

Improving the energy performance of Australian homes will not only help reduce the cost of living for households, but also contribute to reducing Australia’s emissions and meet its net zero emissions target. It will also improve the health of Australians by protecting against extreme weather, poor air quality and energy poverty, the report says.

Climateworks Centre CEO Anna Skarbek was joined by Federal Assistant Minister for Climate Change and Energy Senator Jenny McAllister in launching the report, Climate-ready homes: Building the case for a renovation wave in Australia, in Canberra today.

Ms Skarbek said the report demonstrated the significant opportunities for households and the country to improve the efficiency of low-performing Australian homes. The report calls for urgent action from governments and the private sector to start an energy performance renovation wave in Australia.

‘As households battle rising costs of living, supporting home upgrades can help reduce energy bills and prepare homes for more frequent extreme temperatures, while reducing the emissions that contribute to climate change,’ Ms Skarbek said.

The report’s recommendations include:

  • Financial support to homeowners and renters to improve insulation and ventilation and purchase energy-efficient, electric appliances 
  • Support for states and territories to transition existing homes from gas and a commitment to phasing out gas for new homes by mid-2024
  • A national framework for minimum energy efficiency standards in new homes by the end of 2024
  • Mandatory disclosure of home energy efficiency ratings at point of sale or lease
  • National Construction Code voluntary standards for zero carbon homes by 2025
  • Appropriate education to create a skilled workforce to implement energy performance upgrades

Report co-author, Climateworks Centre Program Impact Manager Dr Gill Armstrong, said homes contribute more than 10 per cent of Australia’s total carbon emissions, with many built before the introduction of minimum energy performance requirements.

She said inefficient home design with gaps around windows and doors and between building materials allowed outside air to leak in and out of homes, causing people to turn up their heaters and air conditioning, increasing energy bills and placing large demand on energy supply.

Gas appliances including stoves, heaters and water heaters, could also cause health issues such as asthma, while bushfire smoke could seep into drafty homes, she said.

‘Upgrading the energy performance of existing homes is a win-win-win-win for households, energy networks, industry and climate,’ Dr Armstrong said.

The report identifies three energy performance renovation scenarios and assesses their costs and benefits for households:

  • Quick-fix – with low-cost DIY upgrades to the home’s thermal shell
  • Modest upgrades
  • Climate-ready – with maximum upgrades to the home’s thermal shell 

The report explores the costs and benefits of upgrades for households and the country, including energy and bill savings, emissions reduction, peak electricity demand and other key parameters. While all scenarios include electrification of appliances, the report also explores the benefits of adding solar in addition to the upgrades.

Dr Armstrong said by upgrading homes more than 20 years old to improve energy performance, the findings show households could save on average between $1,033 and $2,195 on their energy bills depending on dwelling type. Across all dwelling types, this represents an average saving of 43-51 per cent per home.

‘Upgrading homes to the ‘climate-ready’ renovation level, which includes higher levels of insulation, double glazing and heavy drape curtains and airtightness, would achieve the most significant energy savings and emissions reductions, but households need policy support to make this level of renovation cost-effective,’ Dr Armstrong and her co-authors say in the report.

‘Coordination across all levels of government can successfully unlock a renovation wave. The federal government is well-placed to provide coordination as well as policy support in key areas. However, a successful renovation wave will require action from all government levels, industry and the finance sector.’

Dr Armstrong said priority should be given to vulnerable households to support low-income, renters and First Nations people to meet at least the quick-fix level, as they generally live in the most energy-inefficient homes, creating high heating and cooling costs and adverse health impacts.

‘Direct government subsidies can support vulnerable households in which owner-occupiers are unable to access financing. Subsidies to upgrade homes to at least “climate-ready” plus full electrification of appliances will ensure vulnerable households do not miss out on bill savings as a priority,’ she said.

‘If policy supports a “go-all-out, go-fast” approach to energy performance upgrades in homes, a self-sustaining renovation wave will ensure more and more households live in resilient, ‘climate-ready’ homes.’