Residential homes are at the forefront of climate change in Australia. With most built before energy performance requirements, residential buildings make up more than 10% of Australia’s emissions. Improving the quality and performance of Australia’s more than 11 million existing homes is equally as important as increasing the performance of newly built homes. 

Climateworks Centre’s Renovation Pathways project sets out to understand Australia’s residential building stock – what it looks like and what energy performance upgrades homes need to reach a net zero standard. 

Australia’s net zero future will require both increases in electrification and energy efficiency. The same is true for net zero homes. Electrifying a home by swapping gas for electric cooktops, space heating and hot water is an important part of the energy performance equation. 

Preliminary findings from Renovation Pathways show that improving the performance of a home’s ‘thermal shell’ – external walls, roofs and floors – is a very important part of the equation when it comes to energy and financial savings. It is also critical to reducing peak electricity demand in an electrified future.

Roughly 40% of household energy is used for heating and cooling. With climate-appropriate design, however, it could be significantly reduced. That comes down to upgrading a home’s thermal shell, which affects peak electricity demand, energy bills, and household health and comfort.

There are also early indications that energy performance upgrades are able to pay for themselves through energy savings. Across the various housing types we’ve identified as most common for Australia, households could expect to see energy consumption savings in the range of 55–65% on average from thermal shell improvements and efficient and electrified appliances. 

How we are conducting the analysis 

We are working in partnership with Strategy Policy Research, with support from CSIRO, to analyse the largest available housing dataset, containing real energy data from 1.2 million real homes, to conduct a cost-benefit analysis of energy performance upgrades. 

We are also able to parse this data by most of the 69 NatHERS climate zones and all eight of the National Construction Code (NCC) climate zones, which will give us a picture of the cost-effectiveness of energy performance upgrades depending on the climate region in which homes are located. 

The Renovation Pathways project aims to deliver a representative but granular analysis that can provide actionable information for policy-makers and householders living in a variety of home types and climate zones. To do this, we identified home ‘archetypes’ based on building categories – houses, townhouses and apartments – and 28 varieties of external walls, floors and roofs that influence a home’s energy performance. 

We used the 16 most common combinations of building elements to create the archetypes – some examples include:

Examples of archetypes: house, townhouse and apartment building

For each of these archetypes, we then modelled the cost, savings, energy savings and avoided emissions resulting from a sliding scale of energy performance upgrades. What would the economics look like to upgrade a house with weatherboard-clad walls, concrete slab floors and a framed tile roof? For an apartment with brick veneer walls, suspended concrete floors and a concrete roof, what are the most cost-effective upgrades? Improvements needed across four levels of energy performance upgrades include:

Examples of energy performance upgrades: Insulation, infiltration, curtains, window systems, window shade, heat recovery ventilation
Note: R-value: used to determine how well insulation material resists heat flow (i.e. the higher the R-value, the better); ACH: Air changes per hour, which indicates the rate of unintentional flow of outdoor air into a building (i.e. lower infiltration rate reduces energy consumption). Note also, the levels were set according to earlier research conducted as part of Race 2030 program (Rajagopalan et.al,2022). See attached PDF for reference.

The model investigates the cost-effectiveness of thermal shell upgrades, and to round out the energy performance picture, we also look at ‘whole-of-home’ upgrades (e.g. electrifying space conditioning equipment, domestic hot water and electrifying cooktops) and the addition of solar PV. The combination of thermal shell upgrades, efficient electric appliances and solar PV allows us to investigate the cost-effectiveness of getting homes to net zero.

What we expect to find 

Depending on the type of home (archetype) and depending on the level of energy performance upgrades undertaken, we will be able to show the cost-effectiveness of different renovation pathways for nearly 80% of Australia’s housing stock. 

The results will be a robust and highly practical database on home energy performance. We expect the data to show possible financial, energy and emissions savings for each type of home across all climate zones.

Learn more about the Renovation Pathways project.