Our Climate-ready homes report shows most Australians could dramatically reduce their energy use and save thousands each year, by upgrading the thermal efficiency of their homes. 

The findings are relevant for the majority of existing residences across Australia – 11 million homes across all climate zones, from cool temperate to hot-dry or tropical. 

When analysed by state and territory, the greatest potential savings are found in regions with colder winters – which is also where most Australians live. 

Nationally, however, even the lowest potential savings (in warmer climate zones) add up to nearly $1,000 a year. 

And of course, human health and wellbeing improvements stack up right alongside these savings.

Location affects energy use – as does the type of home and what it’s made of

In Climate-ready homes, we wanted to understand how different homes could become zero carbon, cost-effectively, by improving their energy efficiency. 

As a starting point, we knew this would depend on a home’s location and building materials. 

Australia is a big place with many different climates – there are 69 different climate zones recognised by the Nationwide House Energy Rating Scheme – so their energy use challenges vary.

Other than location, the overall energy efficiency of a building is highly dependent on type and building materials.

We first analysed a national sample of homes from CSIRO’s Australian Housing Data portal to identify the most common home types: detached houses, townhouses, or apartments. 

The way homes are built also affects energy consumption. So we next considered the combination of materials used for the construction of external walls, floors and roofs (termed the ‘thermal shell’) across the sample. 

We then used this sample to simulate the energy performance of older ‘low performance’ homes, typical of those built over 20 years ago before minimum energy efficiency standards were introduced to Australia’s National Construction Code. 

Typically these have little insulation, poor airtightness, and gas-powered space heating.

Our modelling then upgraded each home with three separate ‘thermal upgrade’ packages based on research undertaken by CSIRO and RMIT. 

Each package replaced gas space heating with an electric heat pump along with a selection of improvements to insulation, draft sealing, and shading.

Alongside a building’s components, the source of energy is also key to a home’s energy efficiency. 

So we also modelled the impact of switching from gas hot water and cooking, to electric appliances. 

(Importantly, this flagged the importance of improving the thermal performance of a home before or at the same time as switching away from gas heating, so that heat pumps can be ‘right-sized’ for the area and provide good levels of comfort for occupants.)

As our modelling spanned all 69 climate zones across Australia, we were able to break down our results by state and territory.

This chart demonstrates the annual energy savings possible for the average household in each state and territory when thermally upgrading a ‘low performance’ home. These savings are indicated in blue.

It additionally shows average energy savings possible through switching from gas to electric hot water and cooking appliances – indicated in yellow.

Clearly, average household energy savings differ greatly between locations. 

Houses in states or territories that typically experience colder winters – ACT, Tasmania, and Victoria – benefit the most from thermal upgrades. Households in these locations also had the highest total energy savings. 

In contrast, states and territories that experience hotter summers and tropical weather benefited more from the switch to electric hot water and cooking appliances. This was particularly the case for homes in the Northern Territory and Queensland. 

How do thermal upgrades affect energy savings?

Thermal upgrades ‘supercharge’ the energy savings offered through electrification alone.

Looking at the chart again, we can see that changing the thermal upgrade level results in a shift in the amount of energy savings, with more comprehensive upgrades meaning householders were less likely to even need to switch on their heating or cooling appliances. 

As you can see by choosing between the upgrade levels, the shift from ‘modest’ to ‘climate-ready’ was most pronounced, saving an additional 2.9 MWh in ACT, 1.5 MWh in Victoria, and 1.3 MWh in South Australia. 

Energy savings from electrifying hot water and cooking appliances remained constant.

This underlines the importance of upgrading our existing homes. It won’t be enough to just electrify our appliances or to take a ‘one size fits all’ approach. 

By taking a fabric-first approach, even basic upgrades can have substantial benefits.

But as the chart shows, energy savings differ across each jurisdiction. 

By assessing specific states and territories, climate zones and archetypes within those zones, targeted policies can effectively reduce energy use and household bills, improve comfort and contribute to less peak demand across the energy grid.

Has your jurisdiction booked a briefing for the climate zones that matter to you?

The Climate-ready homes report was launched in December 2023, by Climateworks CEO Anna Skarbek at an event at Parliament House, where she was joined by Assistant Minister for Climate Change and Energy Jenny McAllister.

Since then, we’ve been briefing State and Territories government Ministers and departments on findings relevant to their jurisdictions. 

Organisations, government departments and Ministers are invited to contact us to book a detailed briefing on what our research says about homes by specific locations.

To find out more, download the Climate-ready homes report.

Read more: