National Energy Performance Strategy: consultation paper

NATIONAL ENERGY PERFORMANCE STRATEGY
CONSULTATION PAPER

Contribution by
The Insulation Academy

“Our members include multi-national
manufacturers, and installers that are well placed
and ready to feed into Australian national energy
efforts to develop and implement the actions
which will result from a successful
National Energy Performance Strategy.”

“The Insulation Academy and its members
bring a high level of experience from Australia
and a range of other countries that have
developed and enhanced similar strategies over
time.” https://www.insulationacademy.org info@insulationacademy.org

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NATIONAL ENERGY PERFORMANCE STRATEGY

Consultation Paper

Contribution by The Insulation Academy
3rd February 2023

INTRODUCTORY REMARKS

Australia’s National Energy Performance Strategy comes at the right time. The issue of energy security has been brought into stark focus since the escalation of the Russia-Ukraine war in 2022, increases in the cost of living impose increased pressure on the affordability of energy for Australian households, and the legally binding carbon reduction targets set for 2030 and 2050 mean that a transition to clean energy is crucial in Australia’s wider decarbonization efforts.

Buildings account for around 19% of total energy use and 18% of direct carbon emissions in Australia1. The first step to a successful National Energy Performance Strategy will be to reduce the overall energy demand of
Australia’s buildings - this will reduce the total amount of infrastructure required to deliver Australia’s energy needs, and prevent supply issues during times of peak demand.

The energy efficiency of buildings contributes to reducing carbon emissions, helps to reduce pressure on energy bills and can actively feed into Australia’s national energy security strategies. Investing in energy efficiency has a direct return on investment: it helps to reduce gaps between energy demand and supply, reduces the cost of infrastructure needed to meet Australia’s energy needs, and provides Australian citizens with more disposable income providing the foundations for a successful decarbonised economy.

In this context, The Insulation Academy welcomes the National Energy Performance Strategy consultation initiated by the Australian Government. The Insulation Academy represents specialist insulation installers who are committed to installing independently certified insulation products that are fit-for-purpose and compliant with Australian Standards. The Insulation Academy aims to set the highest benchmark in terms of installed quality, the use of compliant products, safe installation practices, and the provision of installed warranties.

Insulation is proven throughout the world to be one of the most impactful and cost-effective ways to make our buildings healthy, comfortable, climate friendly and cheaper to operate. Our members include multi-national manufacturers, and installers that are well placed and ready to contribute to Australian national energy efficiency initiatives to develop and implement the actions which will inevitably result from a successful National
Energy Performance Strategy.

The Insulation Academy and its members bring a high level of experience from Australia and a range of other countries that have developed and enhanced similar strategies over time. The Insulation Academy sees this consultation as an opportunity to share a number of important areas of learnings with the Australian
Government to engender confidence in the insulation industry and its capabilities and capacity to deliver the safe and fit for purpose installation of insulation in Australian buildings to achieve significant energy savings.

The Insulation Academy

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Department of Energy, Climate Change, Energy, the Environment and Water
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Feedback is provided to most of the direct questions asked within the consultation guide. The Insulation Academy has identified five core areas of principal focus:

1. Mandatory disclosure of energy performance
Experience in many other countries demonstrates that mandatory disclosure of energy performance is essential in order
to drive uptake of energy efficiency improvement measures and retrofits. The first step to encouraging uptake of energy
improvement measures and retrofits is to provide information and transparency of the energy performance and efficiency
of a building – whether it be a residential or commercial building. The National Energy Performance Strategy should push
through the recommendations from the ‘National Framework for Disclosure of Residential Energy Efficiency Information’.
Energy Performance Certificates should be provided to a building owner following an audit by a certified auditor and
should be designed in a way which illustrates the current level of energy performance of a building, and clearly highlights
the additional improvement measures which could be implemented to improve the energy performance of the building.
The National Energy Performance Strategy must deliver policy that makes it a legal requirement to disclose the energy
performance rating of a building as a condition of any sale or rental transaction.

2. Minimum levels of energy performance as a condition of building stock transactions
Although many other countries have shown that mandatory disclosure of energy performance is an essential first step,
they have also shown that mandatory disclosure alone will not deliver the scale of uptake required. Minimum energy
performance levels should also be introduced as a condition that underpins any building stock transaction. This is a natural
progression following mandatory disclosure of energy performance, is a strategy being used in many other countries, and
will be essential in order to achieve the level of energy efficiency required to deliver Australia’s decarbonization targets.
A solid regulatory framework will be needed to support this and will need to include sequenced and time-bound targets.
The regulatory framework and associated targets will need to acknowledge the differences between new and existing
buildings as well as the varying conditions across Australia’s various climate zones.

3. Instigation of a national whole building renovation wave
In order to achieve Australia’s 2030 and 2050 carbon targets, it will be essential to successfully retrofit the existing building
stock. Successful large-scale retrofit will require a combination of energy improvement technologies which will need to
include measures to both reduce energy demand (e.g. ceiling insulation, wall insulation, underfloor insulation, air sealing,
improved glazing etc.) and also deliver clean energy (e.g. solar, wind etc.). In order to identify the most suitable and
effective package of measures for each building, a national study should be funded to identify the requirements of various
building types in each of Australia’s climate zones. The National Energy Performance Strategy must include actions to
enable large-scale retrofit, be shaped in a way which delivers whole building retrofit rather than single isolated
improvement measures, and will need to take into account the individual needs of each building to deliver the right
combination of improvement measures for each building.

4. Financial schemes, policies and subsidies to improve energy efficiency for all
Financial schemes, policies and subsidies will need to be developed to act as a catalyst to generate the large-scale retrofit
of Australia’s existing building stock, and to incentivize the construction of new buildings which exceed minimum energy
performance requirements. It is essential to acknowledge the fact that the disposable income of many Australians will act
as a significant barrier to the uptake of whole residential building retrofit measures – and is therefore crucial that the
National Energy Performance Strategy develops financial support mechanisms and subsidies which will incentivise the
uptake required, and which have been demonstrated to work in many other countries including, New Zealand, the United
Kingdom and across Europe. Low-income households need financial support and subsidized measures in order to
encourage and facilitate uptake. The National Energy Performance Strategy should put in place mechanisms to enable
effective and available financial support for those who are not able to pay for improvement measures themselves.

5. Government body responsible for driving a national campaign for low energy use in buildings
Experience from other countries such as New Zealand and the United Kingdom demonstrates that residents won’t act
alone in the numbers required to achieve the scale required to meet Australia’s 2030 and 2050 targets. The National
Energy Performance Strategy should include mechanisms for establishing a Government body which is responsible for
developing and driving a national education campaign over a sustained period in order to ensure the Australian population
understand the critical importance and associated benefits of improving the energy performance of buildings. Such an
education campaign will need to adopt learnings from other countries, be based on behavioural change research and
acknowledge the differences in motivations between varying demographics of the population.

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CONSULTATION & QUESTIONS

GOVERNANCE

1. How can demand considerations be better integrated into Australian energy governance and what are
the priorities for change?

Nationally administered, locally implemented
A core risk to the implementation of a successful National Energy Performance Strategy exists in the way
that state governments currently have the freedom over whether to adopt national level energy
performance targets. Experience from the way the NCC is implemented shows that not all state
governments will adopt the level of energy performance which is set for new buildings at a national level. It
is therefore essential that the National Energy Performance Strategy addresses this issue and must establish
a stable regulatory framework which mandates that all targets developed within the national strategy must
be adopted at both national and state levels.
It would also be possible to link a percentage of GST distributions to states and territories to their
achievement of nationally agreed targets. The National Energy Performance Strategy should incentivise and
penalise through federal funding distributions.
Establish minimum levels of energy performance, progressively improving the limit over time
Establishing, through legislative/regulatory means, progressive improvements of the energy efficiency of
the building stock. For instance, implementing so-called Minimum Energy Performance Standards2, thereby
phasing out progressively poor energy classes from the building stock. Different energy classes can be
applied per climatic zones and different deadline can be envisaged depending on building type.
Targets should be legally binding
The governance framework should introduce binding national targets (including Minimum Energy
Performance Standards as noted above) to ensure the political impetus necessary to implement robust
policies at all levels of government. One of the significant barriers to investment in solutions for industry is
uncertainty regarding long term policy and legislative direction. Introducing binding national energy and
state level energy efficiency targets will provide certainty to industry to enable long term planning and
encourage investment in innovation and business models to deliver the solutions required.
Create a regular framework for reporting of progress against targets
Targets created as a result of the National Energy Performance Strategy should be reported on a regular
basis. Reporting will need to be carried out with transparency at both national and state level to show
progress against core targets.
Introduce a building code requirement for the energy performance of existing buildings
The NCC building code includes scope only for new buildings and new building elements. In other countries
it is commonplace to also have a governance framework which includes minimum levels of energy
performance incorporating relevant health and amenity requirements for existing buildings which are being
upgraded. The National Energy Performance Strategy should include within the existing governance
framework a building code for existing buildings which includes minimum levels of energy performance.

2
Filling the policy gap: Minimum energy performance standards for European buildings - Regulatory Assistance Project (raponline.org)
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Combine energy efficiency planning into governance frameworks for mass electrification
Policy developed to drive the electrification of Australia’s building stock must include consideration for
improving the energy efficiency of the building stock. Without an energy efficient building stock, Australia
risks experiencing power outages at times of peak demand. By reducing the amount of energy required by
Australia’s buildings, the overall cost of developing infrastructure can be vastly reduced. Prioritizing energy
efficiency, starting with measures such as insulation in combination with other technologies, will support a
more effective roll out of renewable energy and electrification of the power grid. It would also be possible
to incorporate maximum limits for the sizing of air conditiong unit capacity in order to drive better fabric
performance and thermally efficient and healthy conditions.
Use existing financial mechanisms to drive additional revenue for energy improvements
The National Energy Performance Strategy should identify existing financial mechanisms which can be
adapted to generate additional revenue which could be used to drive energy improvements throughout
Australia.
This has been proven to work extremely effectively in the UK. The Energy Company Obligation3 (ECO) is a
UK scheme which can help certain households access funding to make energy-efficient home
improvements. The government scheme is designed to help people on low-incomes and those in fuel
poverty, who would otherwise be unable to afford improvements such as new insulation or
repairing/replacing a boiler. The scheme reportedly helps around 200,000 homes each year.
A tax is added to consumer energy bills (approximately 8%) which is used to provide revenue to be used to
deliver energy improvement measures. The Energy Company Obligation places a requirement on the
biggest energy suppliers to use revenues driven by this tax to install energy-saving measures in people’s
homes.
Under the scheme, energy companies can determine which measures they offer to install, how much
funding they provide and the installers that do the work.
This type of funding mechanism could be replicated in Australia and should form part of policy developed
within the National Energy Performance Strategy. In order to drive increased revenues, the tax added to
energy bills could be a progressive one which increases based on energy use or whereby inefficient homes
attract higher levels of the tax. This would have the benefit of driving increased revenue whilst also
increasing the incentive for those in inefficient homes to take action to improve the performance of their
homes.
An alternative method could be to add ‘penalties’ to council rates for poorly performing / high energy using
residential buildings and using the revenues generated to build a fund which could be used to subsidise or
fund energy improvement measures where needed. Europe has an emissions mechanism that allows
revenues4 from that mechanism to be mobilised for renovation and new buildings which deliver greater and
demonstrated energy savings.

3
https://www.ofgem.gov.uk/environmental-and-social-schemes/energy-company-obligation-eco
4
Social Climate Fund (europa.eu)
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Introduce incentives for new buildings which exceed minimum requirements
The NCC sets minimum levels of performance for new buildings and existing governance frameworks exist to review the NCC at regular intervals to reduce the energy used by new buildings over time. However, market forces dictate that the majority of new buildings are built to ‘just pass’ the minimum standard. The
National Energy Performance Strategy should identify and implement incentives to encourage new buildings to be built to exceed minimum levels of energy performance. For example, an incentive could be to reduce or remove the need to pay stamp duty on homes which exceed minimum levels by a defined amount.
One example of how this is working elsewhere is density bonusing in Canada whereby there is an agreement between the local authorities and a developer, where an increased density of development is granted in return for pre-defined public benefits. Canada introduced density bonusing in the mid-1980s to support the implementation of smart growth principles. Under such agreements, the developer will typically be granted additional density of development in return for a commitment to provide infrastructure improvements, affordable housing and/or parkland. The resulting density is usually higher than the density specified by local zoning regulations. This allows for things like exterior insulation systems which results in thicker walls
(less NLA) but that can then be traded for extra planning density allowances.
Modify existing planning regulations and processes to provide additional incentives for high performance
Existing planning regulations could be modified to include incentives for high performance buildings similar to mechanisms used in other countries such as Canada (as highlighted in the point above).
Ensure that inspectors of energy improvement measures have the necessary powers over unlicensed trades
Energy improvement measures are often installed by unlicensed trades. This can cause an issue in that inspectors do not have the necessary power required to enforce the high levels of quality required. The
National Energy Performance Strategy should ensure that inspectors have the relevant and necessary power over unlicensed trades in order to avoid issues with enforcement of quality. The ACT government have encountered this issue on energy efficiency schemes which have been implemented, and have subsequently developed solutions to overcome the issue. The National Energy Performance Strategy should assess this solution and develop mechanisms to implement nationally.

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2. What new or modified co-ordination mechanisms or institutional responsibilities would be appropriate
to better drive energy performance action in the future?

A new not-for-profit organization to drive national energy efforts on behalf of Government
The National Energy Performance Strategy should include mechanisms for establishing a government body
which is responsible for building and driving a national education campaign over a sustained period in order
to ensure the Australian population understand the critical importance and associated benefits of improving
the energy performance of buildings. Such an education campaign will need to adopt learnings from other
countries, be based on behavioural change research and acknowledge the differences in motivations
between varying demographics of the population. This is working in other countries via organisations such
as EECA5 (Energy Efficiency and Conservation Authority) in New Zealand, and the EST6 (Energy Saving Trust)
in the United Kingdom.
Benchmark leading countries to identify what works and what doesn’t
Australian policy is behind a number of other countries – rather than follow the same steps as those
countries just with a later starting point, it would be a better strategy to review and learn the lessons they
have already taken in order to identify the most effective elements of successful strategies already being
implemented elsewhere. There are also areas of Australia where schemes to generate energy improvement
uptake is working and which can also provide valuable learning. This would include assessment of messaging
and behavioural change efforts to drive uptake of energy improvement measures, finance and subsidy
schemes and programmes, and technical solutions to improve energy performance. The EU has been
through several iterations of its Energy Performance of Building Directive (EPBD): earlier versions put in
place a framework, yet it needed improvements. There are many lessons that those involved in the
development of the EPBD could share. However, it is essential that this responsibility is clearly assigned and
defined to ensure that there is an organisation responsible for delivery.
Create a database of schemes and initiatives implemented to monitor progress and identify learning
Creating a database of schemes which are implemented, along with relevant tracking metrics will enable
government to identify learning from those schemes and enable learning to be shared across jurisdictions.
Clear responsibility for monitoring and reporting of progress against targets
Putting mechanisms in place to monitor and report improvement against national energy targets. And when
necessary, putting in place support mechanisms (e.g., administrative, etc.) to deliver the results expected
across the different jurisdictions whilst accounting for the specificities of each climatic zone. Reporting
should be at regular pre-defined intervals and elevated to a prominent level to raise awareness of progress.
Set clear deadlines within the Trajectory for Low Energy Buildings
Putting in place trajectories of improvement (i.e., threshold to reach by certain date) to allow stability,
predictability for all the players within the energy markets and facilitate business to plan how it will help
achieve the objectives. The Trajectory for Low Energy Buildings provides the start of this but has no set
deadlines or target dates which are essential to drive meaningful action in the time periods required.
Providing firm long term assurance regarding direction of policy also provides the confidence required for
industry to invest in the solutions required to help achieve the targets set out.

5
EECA - Energy Efficiency & Conservation Authority | EECA
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Energy Saving Trust
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Introduce a requirement for state governments to publish & implement long term renovation strategies
The National Energy Performance Strategy should introduce a mandatory requirement for states and territories to establish a long-term renovation strategies by climate zone to support the renovation of their state building stock into a highly energy efficient and decarbonised building stock by 2050. This is also a legislative requirement in Europe whereby all EU countries must establish a long-term renovation strategy as set out in the Energy Performance of Buildings Directive (2010/31/EU). Long-Term Renovation Strategies
(LTRS) should set the vision, roadmap, concrete policy measures, actions, and dedicated financing mechanisms at a state and territory level to decarbonise the national building stocks by 2050 in line with
Australia’s wider net zero target.
Finance support and subsidies to enable energy improvement measures for low-income households
Low-income households need financial support and subsidized measures in order to encourage and facilitate uptake. The National Energy Performance Strategy should put in place mechanisms to enable effective and available financial support for those who are not able to pay for improvement measures themselves. The relevant mechanisms and organizational responsibilities would need to be created in order to develop and administer such programmes.
A framework and associated responsibility for oversight and management of mandatory disclosure
The National Energy Performance Strategy should accelerate the mandatory disclosure of energy performance and should put in place the required frameworks (as outlined in the draft ‘National Framework for Disclosure of Residential Energy Efficiency Information’).

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TARGETS
3. Would an energy efficiency target or targets be suitable for Australia?
Yes.
A combination of targets
It is essential that effective targets for energy efficiency are set in order to define a clear path towards
Australia’s national carbon reduction targets, monitor progress, and hold governments and industry
accountable.
Targets are used in other countries to measure energy efficiency and these are both suitable and relevant
for Australia.

It will be necessary to set a number of targets to measure a variety of elements. Some targets will need to
be set at a national and state level, some will need to be set at a building level. Examples of metrics which
may be used to indicate energy efficiency of Australia’s buildings:
 Overall operational carbon emissions (CO2e)
 Carbon efficiency (CO2e/m2/yr)
 Energy use (kWh)
 Energy efficiency (kWh/m2/yr)
 Nathers star rating
 Minimum level of air tightness (m3/hr/m2@50Pa)

Targets should also be set to monitor activity related to energy efficiency – for example:
 Number of individual energy improvement measures installed
 Number of whole building retrofits delivered
 Number of households / buildings improved
 Average Nathers star rating of building stock by climate zone and building type

It is paramount to design a framework that allows measurement against both short and longer term
objectives and putting in place the revision mechanisms to adjust where necessary.
It is crucial that any energy efficiency target is set at the right level of ambition in order to meet Australia’s
2030 and 2050 overall carbon targets.

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4. What is the most appropriate methodology for designing and implementing a target that effectively
drives demand side action towards Australia’s overall net zero target?
Benchmark leading countries to identify effective targets
Australian policy is behind a number of other countries – rather than follow the same steps as those
countries just with a later starting point, it would be a better strategy to review and learn the lessons they
have already taken in setting targets in order to identify the most effective elements of successful strategies
already being implemented elsewhere.
Input from industry
The definition of a net target for Australia should facilitate the participation and the inclusion of the
contributions of all the energy efficiency community (insulation, windows, active solutions (e.g., smart
devices), etc.) and sequence the priority.
Set energy efficiency improvement targets in advance of and alongside electrification targets
Renovation efforts should primarily focus on the energy demands for space heating and cooling prior to
taking a leapfrog towards decarbonising space heating and cooling. Moving to an electrified power grid first
without paying attention to increasing the energy efficiency of the building stock will not decrease energy
demand and will open needs for further investments into the energy grid; investments which are costly for
society.
Set targets that avoid ‘carbon lock-in’
Buildings must be renovated to a level of energy performance that avoids carbon lock-in, ensuring that
buildings are renovated once between now and 2050. For example, renovating a building in the early-mid
2020s to achieve 20-25% energy savings would mean that this same building would need to be renovated
once more in the 2030s to ensure alignment with the objective of a climate neutral building stock by 2050.
This would result in both wasted energy and wasted resources.
Sticks and carrots
In order to drive increases in energy performance at the scale required, targets will need to be developed
using a mix of measures that both incentivise (carrots) and also mandate or penalise based on performance
(sticks).
One example would be to introduce ‘penalties’ to council rates for poorly performing / high energy using
buildings (stick) and using the revenues generated to build a fund which could be used to subsidise or fund
energy improvement measures where needed (carrot). Europe has an emissions mechanism that allows
revenues from that mechanism to be mobilised for renovation and new buildings which deliver greater and
demonstrated energy savings.
Set targets which drive deep renovation of Australia’s inefficient housing stock
There are 8 million homes in Australia which were built before mandatory energy efficiency standards were
introduced. It is imperative that National Energy Performance Strategy sets the framework to achieve the
pace and depth of renovation required to reach the savings potential within these homes. The National
Energy Performance Strategy should introduce a definition of “deep renovation” and require financial
programmes and advisory services to prioritise projects achieving deep renovations.
Base future targets on measurement of actual performance
Future energy efficiency targets linked to net zero will need to be based on measurement of actual
performance rather than designed performance. Current metrics based on energy use do not illustrate the
actual efficiency of a building and risk missing opportunities to improve poor performing buildings. Similarly
building ratings based on software calculations and simulations provide information regarding designed
intent but do not demonstrate the actual performance of a building post-build. Future targets will need to
be based on measured outputs rather than modelled inputs.

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Set health, amenity and durability requirements that prevent excessive carbon intensive rectification
works
Internationally the improper insulation of buildings has been known to cause entrapment of moisture
leading to early deterioration of building elements. This has been seen in the Canadian condo crisis, the new
Zealand leaky builing crisis and the European sick building syndrome. The choice of insulation types matter
in the long term health and durability of the structure. International science favours the use of vapour
permeable insulation types to enhance drying and mitigate these issues. This aligns with NCC 2022 health
and amenity requirements.

5. How should progress towards an energy efficiency target be measured?

A combination of short, medium and long term targets
Targets should be designed to include short, medium and long term objectives which are aligned to
Australia’s wider carbon reduction targets.
In order to provide certainty to industry, allow proper planning and generate the confidence needed to
drive investment and innovation, the National Energy Performance Strategy should drive policy to set
multiple future targets at the same time.
At national and state levels by climate zone and building type
It will be important to track how many of Australia’s buildings are deemed to be at the required level of
energy performance to meet the targets which are set as part of the National Energy Performance Strategy.
At the moment Australia has a very inefficient building stock. The National Energy Performance Strategy
should set minimum levels of expected performance at incremental dates towards 2030 and 2050, and track
the percentage of the building stock reaches that level of required performance. This will provide an
indication of the scale of work required. It will be important to segment the reporting by climate zone, state
and type of building. Limitations on the insulation type and construction methodologies should be made
based on a climatic basis to prevent future sick building crisis.
Regular reporting
Regular reporting from national and state jurisdictions should be introduced to fully communicate regarding
progress towards the energy efficiency targets.
Inclusion of energy efficiency metrics within wider national energy reporting mechanisms
Assessing and measuring energy efficiency as part of the national energy mix. Such a scheme7 would allow
to transparently account for energy efficiency as the first tool and support the national decarbonisation
ambitions.
Our member Knauf Insulation has commissioned a study to identify a methodology to account for energy
efficiency as part of national energy efficiency measures. The study is primarily designed for a European
audience, but will also provide valuable insight into proposed solutions for Australia. The study will be
available to the public in late Q2 2023, and can be shared with Australian policymakers to further help the
development of the National Energy Performance Strategy.
(PLEASE EMAIL info@insulationacademy.org IN ORDER TO REGISTER INTEREST TO RECEIVE THE REPORT
WHEN IT IS AVAILABLE).

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California's Efficiency Good News Story Part II: State Policymakers Support Efficiency Progress | NRDC
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RESIDENTIAL
6. What are the key opportunities to improve the energy performance of new and existing residential
buildings?
Reduce energy demand first
The first important priority and opportunity is to reduce the energy demand of buildings. With 18% of
Australia’s carbon emissions stemming from the built environment, it is paramount to effectively reduce
the emissions associated with buildings’ cooling and heating. Energy Efficiency First is an overarching
principle that should help Australia to accelerate achievement of its climate neutrality ambitions.
Increase visibility
The National Energy Performance Strategy should introduce policies which build on existing frameworks to
increase the visibility of the energy performance of buildings. These could include:
 Mandatory disclosure of energy performance of buildings as a requirement of all property transactions.
 Adding energy performance ratings to council rate calculations with the potential to also charge higher
rates for poorer performing buildings.
 Include a declaration of energy use in annual tax returns to increase the visibility and provide a focus
on an annual basis.
 Develop league tables of energy performance of buildings – this could be done at national level to allow
building owners to compare .vs. a benchmark. It could also be created at state, local council or even
street level to allow building and homeowners to compare the energy performance of their homes with
neighbours. Research in the US showed that this was one of the most effective methods of generating
uptake of improvement measures.
Mandate minimum levels of performance
Although many other countries have shown that mandatory disclosure of energy performance is an
essential first step, they have also shown that mandatory disclosure alone will not deliver the scale of uptake
required. Minimum energy performance levels should also be introduced as a condition that underpins any
building stock transaction. This is a natural progression following mandatory disclosure of energy
performance, is a strategy being used in many other countries, and will be essential in order to achieve the
level of energy efficiency required to deliver Australia’s decarbonization targets. A solid regulatory
framework will be needed to support this and will need to include sequenced and time-bound targets. The
regulatory framework and associated targets will need to acknowledge the differences between new and
existing buildings as well as the varying conditions across Australia’s various climate zones.
Remove barriers to uptake of energy efficiency improvements
A significant opportunity to drive improvements in energy performance will be to remove barriers that
prevent uptake of retrofit measures and prevent new buildings from exceeding minimum targets. A number
of suggestions are provided to overcome common barriers in question number 8 within this consultation
response.
Incentivise those building new buildings to exceed minimum levels of performance as provided in the NCC
The National Energy Performance Strategy should identify and implement incentives to encourage new
buildings to be built to exceed minimum levels of energy performance. For example, an incentive could be
to reduce or remove the need to pay stamp duty on homes which exceed minimum levels by a defined
amount. Higher energy efficiency classes should embrace twin components of decarbonising space heating
and cooling and lowest energy demands possible (so-called Nearly Zero Energy Buildings8 at European level)
and provide incentives for achieving this level of performance.

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Nearly zero-emission building (NZEB) means a building that has a very high energy performance, while the nearly zero or very low amount of energy required should be covered to a very significant extent by energy from renewable sources, including energy from renewable sources produced on-site or nearby.
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Make energy improving retrofit as simple as possible
In order to increase the uptake of measures it will be important to make it as simple as possible. There are
a number of ways in which retrofit could be simplified:
 Baseline research to be carried out to identify the most common house types in each climate zone in
order to identify common retrofit packages which can work for similar house types to enable a
‘catalogue of improvement measures’ which can act as a starting point and can be modified to each
house.
 Generation of industry initiatives to facilitate one-stop-shop retrofit co-ordinators and installers.
 Minimising administration requirements linked to subsidy schemes.
 The National Energy Performance Strategy should include mechanisms for establishing a government
body which is responsible for developing and implementing a national education campaign over a
sustained period, and which can act as a centralised hub of information for those wanting to undertake
energy improvements, and which can maintain a list of approved energy improvement installers for
each geography to help match homeowners to installers. This is working in other countries via
organisations such as EECA (Energy Efficiency and Conservation Authority) in New Zealand, and the EST
(Energy Saving Trust) in the United Kingdom.
Instigate and facilitate a national whole building renovation wave to improve existing buildings
Australia needs policies with robust and long-term measures for efficiency improvement not short-term
fixes: 85-95% of the current building stock is expected to stand by 2050 and yet most of it is energy
inefficient. The creation of a National Energy Performance Strategy provides the opportunity to enshrine
long-term policy measures that will push markets to substantially decrease the energy demand from
buildings and limit energy costs for consumers.
Successful large-scale retrofit will require a combination of energy improvement technologies which will
need to include measures to both reduce energy demand (e.g. ceiling insulation, wall insulation, underfloor
insulation, improved glazing etc.) and also deliver clean energy (e.g. solar, wind etc.). The National Energy
Performance Strategy must include actions to enable large-scale retrofit, be shaped in a way which delivers
whole building retrofit rather than single isolated improvement measures, and will need to take into
account the individual needs of each building to deliver the right combination of improvement measures to
each building.
In order to drive the renovation of existing buildings at the scale required, renovation endeavours require a
mix of measures that both incentivisation strategies and also mandated regulatory requirements - I.e. a
carrot and stick approach. Incentivisation strategies may include:
Providing financial incentives (loans, grants, subsidies) to increase renovation to improve energy
efficiency of buildings– e.g.
 Stamp duty reductions / discounts for higher performing & energy efficient homes
 Council rate reductions for higher performing energy efficient homes (funded by penalties for poor
performing homes and a progressive energy tax which taxes the highest energy users)
 Subsidy schemes made available to reduce the cost of upgrades focusing on the worst performing
buildings and the most vulnerable occupants first
 Subsidy schemes designed to favour deep whole house retrofit rather than single measures by
climate zone
 Public and transparent communication of energy performance linked to financial decisions such as
that used in Belgium whereby energy performance is one input used to demonstrate value for
money for tenants in rented homes.9

9
Homepage - loyers.brussels (in French or Dutch only)
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Financial penalties to act as disincentives linked to the energy performance of a building:
 Stamp duty increases for inefficient homes
 Council rate penalties and higher rates for inefficient homes
 Disclosing energy performance certificates to prospective renters and applying financial penalties
for not doing it so
Mandated regulatory requirements may include:
 Mandatory disclosure of energy performance. This is an essential and urgent priority in order to
provide visibility and raise awareness of the energy performance of buildings.
 Mandating minimum levels of performance as a legal requirement before all property transactions
including both sale and rent - this approach can use various approaches – e.g:
Most basic level - Setting minimum requirements based on the features of a home – for example,
as per the ACT Government ‘Minimum energy efficiency standards for rental homes’ policy which
will come into force in April 2023 – e.g. a requirement for a home to have a minimum ceiling R-
value of R5.0.
Interim level - Setting minimum requirements based on energy performance ratings – e.g. as per
the United Kingdom ‘Minimum energy efficiency standards for rental homes’ regulation (Minimum
energy efficiency standards for rental homes - Justice and Community Safety Directorate
(act.gov.au) which has been in force since 2020 and whereby homes must achieve at least a Level
E (on a scale of A-G) in order to be able to let for rent. The minimum level of performance will be
improved to Level C in 2025 meaning that landlords have until 2025 to upgrade their properties to
achieve a higher level of performance.
Schemes should drive multiple measures for the best outcomes.
 Set minimum levels of energy performance when undertaking major renovation works – i.e. as per
the NSW State requirement from October 2023 whereby renovations costing more than $50,000
will have to meet a 7-star energy efficiency. Major renovation works provide a key trigger point
and opportunity for the installation of solutions (e.g. insulation) to improve the energy efficiency
performance of a home.

14
7. What opportunities are there to improve or streamline existing policies aimed at empowering consumers
to undertake energy performance improvements in their homes?

Introduce minimum levels of performance to drive improvements in the rental market
The National Energy Performance Strategy should introduce minimum levels of performance10 for rented
properties. This empowers tenants by mandating improvements which landlords must undertake.
Minimum requirements should include all building elements, not just ceiling insulation as in the ACT.
Provide financial support and subsidies for low-income households
Low-income households need financial support and subsidized measures in order to encourage and
facilitate uptake. The National Energy Performance Strategy should put in place mechanisms to enable
effective and available financial support for those who are not able to pay for improvement measures
themselves. The relevant mechanisms and organizational responsibilities would need to be created in order
to develop and administer such programmes.
Adapt annual tax returns to include a mandatory disclosure of building performance
Existing policy is in place to require annual tax returns. This could be adapted to include a requirement to
disclose the energy performance of any owned buildings. This will increase visibility and focus towards
generating consideration for energy improvement measures.
Introduce requirements for energy improvements during large renovations
Opportunity to introduce consequential improvement requirements as per NSW legislation which requires
any renovation over $50,000 to achieve a minimum level of energy efficiency. This could be linked to
planning consents. There exists the possibility to generate a market which offers packages of energy
improvement measures.
Adapt council rate mechanisms to add penalties and discounts based on energy performance
Council rates are already in place – the mechanisms used for setting council rates could be adapted to attract
higher council rates for those in energy intensive homes and provide discounts / lower rates to those in
higher performing homes. The money raised by the poorer performing homes could also be used to
contribute to subsidy schemes to assist poorer elements of society. Work would need to be carried out to
identify the base level which would be used to set the level for penalties and discounts.
Incentives for the highest performing homes
There could also be the opportunity to provide some funding / financial incentive to those homeowners or
building owners who are ‘the first to zero’ or for achieving certain benchmark levels of energy efficiency
which could increase over time.
Develop a not-for-profit organisation aimed at empowering consumers to improve energy performance
The National Energy Performance Strategy should include mechanisms for establishing a government body
which is responsible for developing and implementing a national education campaign over a sustained
period, and empowering consumers to undertake energy improvements. This is working in other countries
via organisations such as EECA (Energy Efficiency and Conservation Authority) in New Zealand, and the EST
(Energy Saving Trust) in the United Kingdom. Benchmarking these organisations would be a good start in
identifying opportunities for development.

10
Filling the policy gap: Minimum energy performance standards for European buildings - Regulatory Assistance Project (raponline.org)
15
8. What are key financial and non-financial barriers to the uptake of energy performance improvement
opportunities? How can these barriers be overcome?
There are a wide variety of both financial and non-financial barriers which can prevent the uptake of energy
performance improvements. However, it is important to acknowledge that different people across different
demographics and geographies may perceive barriers in different ways and to different extents. The below
is merely a (non-exhaustive) list of barriers which exist and may be perceived to different extents by
different people at different times. The list also provides a (non-exhaustive) list of potential ways in which
some of these barriers may be overcome, and which may be used when developing the National Energy
Performance Strategy. Policies and actions should be designed and implemented to ensure the right
solutions are used with the right people at the right time to overcome the barriers mentioned.
Financial barriers
BARRIER POTENTIAL SOLUTIONS
Lack of disposable income to pay Develop the infrastructure to enable and encourage the provision
for energy efficiency upgrade of low cost finance linked to energy improvement measures.
measures. As inflation continues
Provide subsidies to contribute to the upfront cost of improvement
and the cost-of-living increases,
measures.
disposable income available to
cover the upfront cost of Reduce (or remove) GST on energy improvement measures and
improvement measures can act as associated products to reduce the upfront cost of energy
a barrier. improvement measures.
Provide subsidies and financial support to businesses which install
energy improvement measures to reduce the associated labour
cost of improvement measures.
Might be worth citing incentives for uptake of EVs.
Lack of funding mechanisms aimed In Europe revenues from Emission Trading Schemes are mobilised
at gathering and pooling resources to finance retrofit of buildings. Also, the revenues of the future
towards retrofitting the building Emission Trading Schemes II (for buildings and transport) will be
stock. also directed towards measures meant at increasing the energy
performance of the building stock. So, space heating and cooling
with fossil fuel devices will be subject to allowance under an
emission mechanism: revenues of which will be targeted to
renovation. Such mechanism is paramount to partially finance the
renovation of the building stock.
Lack of clear financial incentives for Incentives should be introduced and should be focused on being
public and private homeowners. predictable, long-term, and stable. Otherwise, such funds risk
jeopardizing market and growth stability11. The risk is that start and
stop mechanisms reduce confidence amongst industry and reduce
the willingness to invest in business models and long term
solutions.
Long (perceived) payback periods Develop clear guidance based on data showing indicative costs and
in some situations. associated payback periods of common improvement measures.

11
Good case in point: 5th period of the CEE mechanism in France: which was stopped from a year to another. This collapsed an entire economy of craftsmen and workers and companies that worked on improving the energy efficiency of the building stock.
16
BARRIER POTENTIAL SOLUTIONS
Ineffective financial outcomes if Develop policy which encourages a whole-building approach to improvement measures are retrofit.
installed in isolation rather than
Develop policy which requires a building to have a minimum level using an effective whole building
of fabric efficiency and performance before subsidies are provided approach.
for energy supply technologies such as heat pumps.
Ineffective financial outcomes if As a future step, the National Energy Performance Strategy should improvement measures are not introduce policy to require the measurement of the actual installed effectively and which performance of installed measures as a way to monitor and subsequently do not deliver the demonstrate the quality of installation.
level of energy performance designed, expected or promised.
Home and building owners often A national campaign to raise awareness regarding the importance, have other financial priorities. benefits and availability of energy efficiency improvement
measures would raise the importance of energy performance and
could encourage further uptake.
The cost of finding and converting The National Energy Performance Strategy should include a customers can be a barrier to strategy for data capture of the energy performance of the installer activity and can further Australian building stock. This has worked in other countries such increase the cost of installation of as the United Kingdom to provide the information and data needed improvement measures. to actively target the right house types and right households in
conjunction with qualifying subsidy schemes. This reduces
marketing costs for installers and can subsequently limit the overall
cost of improvement measures.
A national campaign to raise awareness regarding the importance,
benefits and availability of energy efficiency improvement
measures would encourage a level of demand which could also
reduce the overall cost of customer acquisition.
Additional administrative costs if Subsidy schemes and associated policy developed within the subsidy schemes are designed in a National Energy Performance Strategy should be developed in a way which is overly bureaucratic way which is as simple to administer as possible.
and heavy in administration burden – this has been demonstrated to be a barrier in other countries and results in installers of energy improvement measures needing to pass on additional costs associated with administration and bureaucracy linked to subsidy schemes.

17
BARRIER POTENTIAL SOLUTIONS
Lack of financial disincentive – i.e. The National Energy Performance Strategy should include policy
there are no financial penalties for which imposes financial penalties linked to owners of buildings
maintaining the status quo. with poor levels of energy efficiency and which do not implement
available energy improvement measures. E.g.:
- Higher council rates for homes with lower energy ratings.
- Higher council rates for homes with higher levels of energy use.
The funds raised by such policies could be utilised to provide
subsidies to reduce the cost of energy improvement measures for
others.

Non-financial barriers
BARRIER POTENTIAL SOLUTIONS
Apathy. A national campaign to raise awareness regarding the importance,
benefits and availability of energy efficiency improvement measures
would raise the importance of energy performance and could
encourage further uptake.
Clear guidance – based on research of messages that work most
effectively and also behavioural science – should be provided to
industry to ensure that all stakeholders involved in the marketing of
energy improvement measures use the right messages when
targeting the right people.
Lack of awareness of the problem. A national campaign to raise awareness regarding the importance,
benefits and availability of energy efficiency improvement measures
would raise the importance of energy performance and could
encourage further uptake.
Clear guidance – based on research of messages that work most
effectively and also behavioural science – should be provided to
industry to ensure that all stakeholders involved in the marketing of
energy improvement measures use the right messages when
targeting the right people.

18
BARRIER POTENTIAL SOLUTIONS
Lack of visibility of the problem. The National Energy Performance Strategy should introduce policies
which build on existing frameworks to increase the visibility of the
energy performance of buildings. These could include:
- Mandatory disclosure of energy performance of buildings as a
requirement of all property transactions.
- Adding energy performance ratings to council rate calculations
with the potential to also charge higher rates for poorer
performing buildings.
- Include a declaration of energy use to annual tax returns to
increase the visibility and provide a focus on an annual basis.
- Develop league tables of energy performance of buildings – this
could be done at national level to allow building owners to
compare .vs. a benchmark. It could also be created at state, local
council or even street level to allow building and homeowners to
compare the energy performance of their homes with neighbours.
Research in the US showed that this was one of the most effective
methods of generating uptake of improvement measures.
Lack of education of the scale of A national campaign to raise awareness regarding the importance, the problem. benefits and availability of energy efficiency improvement measures
would raise the importance of energy performance and could
encourage further uptake.
Clear guidance – based on research of messages that work most
effectively and also behavioural science – should be provided to
industry to ensure that all stakeholders involved in the marketing of
energy improvement measures use the right messages when
targeting the right people.
A national pilot study should be instigated to demonstrate the
savings from adopting a combination of energy efficiency measures.
The study should be implemented across all climate zones to
demonstrate real savings which result from the installation of
improvement measures.
Finance mechanisms should be developed to provide funds for the
development of solutions for measuring and valuing real
performance outcomes and use this to incentivise the development
of future financial packages.

19
BARRIER POTENTIAL SOLUTIONS
Lack of motivation. A national campaign to raise awareness regarding the importance,
benefits and availability of energy efficiency improvement measures
would raise the importance of energy performance and could
encourage further uptake.
Clear guidance – based on research of messages that work most
effectively and also behavioural science – should be provided to
industry in the shape of messaging toolkits to ensure that all
stakeholders involved in the marketing of energy improvement
measures use the right messages when targeting the right people.
The National Energy Performance Strategy should include policy
which imposes financial penalties linked to owners of buildings with
poor levels of energy efficiency and which do not implement
available energy improvement measures. E.g.:
- Higher council rates for homes with lower energy ratings.
- Higher council rates for homes with higher levels of energy use.
The funds raised by such policies could be utilised to provide
subsidies to reduce the cost of energy improvement measures for
others.
The hassle factor of the need to The National Energy Performance Strategy could introduce
deal with multiple installers / programmes to encourage and enable the creation of ‘one-stop-
contractors to upgrade multiple shop’ solutions for energy improvement retrofit.
elements of a home / building.
The National Energy Performance Strategy could develop
The need to contact multiple frameworks which include the creation of new roles within the
companies for multiple measures industry of retrofit designers and co-ordinators. This is working in
can increase complexity, effort the United Kingdom12 and is the result of similar consultation
and act as a barrier to action. regarding policy to drive the uptake of retrofit measures.

Lack of a solution by climate and The National Energy Performance Strategy should develop
the potential for building / home programmes to identify the most common building types in each of
owners to perceive solutions as Australia’s climate zones and should create a suite of whole-house
relevant to their local climate. retrofit solutions for each variable in order to act as a catalogue of
solutions for each climate zone.

Lack of awareness of where to The National Energy Performance Strategy should consider
find a solution, or of the next step examples from other countries which have created separate non-
that should be taken to arrange profit organisations whose mission is to drive the uptake of
an energy improvement measure measures and act as a point of information for consumers. Examples
or whole house retrofit. include EECA (Energy Efficiency and Conservation Authority) in New
Zealand, and the EST (Energy Saving Trust) in the United Kingdom.
Such an organisation could include a directory of registered retrofit
designers, assessors, co-ordinators and installers in order to allow
consumers to find the information and contacts needed.

12
PAS 2035/2030 | BSI (bsigroup.com)
20
BARRIER POTENTIAL SOLUTIONS
Diverse population means that Clear guidance – based on research of messages that work most
motivations will be different effectively and also behavioural science – should be provided to
across different demographics – industry in the shape of messaging toolkits to ensure that all
i.e. there is no one silver bullet in stakeholders involved in the marketing of energy improvement
terms of messaging which will measures use the right messages when targeting the right people.
work for all.

Lack of available data regarding A programme of research and building profile should be instigated
the energy performance of the at a national level to obtain as data regarding Australia’s building
Australian building stock at a stock at a building level. This can be linked to the mandatory
building level. This makes it disclosure of energy performance of buildings. i.e. when an energy
difficult to cost-effectively target performance audit is carried out in order to obtain a rating, an
the buildings which need specific Energy Performance Certificate should be awarded, and should be
improvement measures. registered on a central Government database which is accessible to
the public. This works well in the United Kingdom13, with data being
made available to industry (under controlled privacy conditions) to
help identify buildings in need of improvements.
The National Energy Performance Strategy should also require that
any upgrade carried out using subsidy programmes should be
registered on the national database to record the improvement
measures which have been installed. This data being made available
to industry (under controlled privacy conditions) to help identify
buildings in need of improvements.

13
Find an energy certificate - GOV.UK (www.gov.uk)
21
9. How can demand management and electrification support lowering energy bills and emissions?
Energy efficiency is essential to enable successful electrification
Renovation efforts should primarily focus on the energy demands for space heating and cooling prior to
taking a leapfrog towards decarbonising space heating and cooling. Moving to an electrified power grid first
without paying attention to increasing the energy efficiency of the building stock will not decrease energy
demand and will open needs for further investments into the energy grid; investments which are costly for
society.
Reducing demand reduces the risk of outages during times of peak demand
Policy developed to drive the electrification of Australia’s building stock must include consideration for
improving the energy efficiency of the building stock. Without an energy efficient building stock Australia
risks experiencing power outages at times of peak demand.
Reducing demand reduces cost of building infrastructure to supply Australia’s power
By reducing the amount of energy required by Australia’s buildings, the overall cost of developing
infrastructure can be vastly reduced. Prioritizing energy efficiency, starting with measures such as insulation
in combination with other technologies, will support a more effective roll out of renewable energy and
electrification of the power grid.

10. How does poor energy performance impact on disadvantaged communities?
The health impact of poor energy performance leads to inequalities, exclusions and diseases in worst case
scenarios.
Increased thermal performance141516 with specific solutions (certain insulation materials) demonstrates
limited, if no emissions of volatile organic compounds. Indoor air emissions impact the life of those who
leave in buildings. In certain cases, fossil fuel-based energy appliances17 are associated with poor living
conditions that can induce certain diseases (e.g., chronical respiratory, cancer). A increase thermal
performance linked with a phase out of fossil-based appliances is a positive game changer for the comfort
of inhabitants.

14
Energy Savings Plus Health Indoor Air Quality Guidelines for Multifamily Renovations | US EPA
15
Energy Savings Plus Health: Indoor Air Quality Guidelines | US EPA
16
How to Build, Verify, and Report Indoor airPLUS Labeled Homes | US EPA
17
Energy poverty, housing conditions, and self-assessed health: evidence from Poland - IBS - Instytut Badań Strukturalnych
22
LOW-INCOME HOUSEHOLDS
11. What are the opportunities to improve the energy performance of residential buildings for low-income
households?
Remove financial barriers
Low-income households will likely not have the disposable income required to fund energy improvement
measures. Their list of priorities dictates that energy improvements will likely be towards the bottom behind
other more basic needs. It is essential that the National Energy Performance Strategy develops policies and
frameworks which enable the provision of access to fully funded solutions.
This has worked in many other countries including New Zealand, the UK and across various European
countries. In the UK The Energy Company Obligation18, or ECO, is a scheme which can help certain
households access funding to make energy-efficient home improvements. The government scheme is
designed to help people on low-incomes and those in fuel poverty, who would otherwise be unable to afford
improvements such as new insulation or repairing/replacing a boiler. The scheme reportedly helps around
200,000 homes each year.
A tax is added to consumer energy bills (approximately 8%) which is used to provide revenue to be used to
deliver energy improvement measures. The Energy Company Obligation places a requirement on the biggest
energy suppliers to use revenues driven by this tax to install energy-saving measures in people’s homes.
Under the scheme, energy companies can determine which measures they offer to install, how much
funding they provide and the installers that do the work.
This type of funding mechanism could be replicated in Australia and should form part of policy developed
within the National Energy Performance Strategy.

12. What are the financial and non-financial barriers to uptake of energy efficiency upgrades for low-income
households, and what can be done to overcome them?
All of the barriers identified in question 8 will exist also for low-income households. However, financial
pressures dictate that they will be experienced at heightened levels.
Combination of mandated minimum levels of performance and subsidisation for improvements
In order to generate energy improvement activity amongst low-income households the National Energy
Performance Strategy will need to use a combination of both mandated minimum levels of performance
which will need to increase over time, whilst also providing subsidisation and fully funded schemes for low-
income households to take advantage of energy improvement measures their homes require.

13. What actions should be prioritised to assist low-income households to improve energy efficiency in their
homes?
Combination of mandated minimum levels of performance and subsidisation for improvements
As mentioned in question 12, in order to generate energy improvement activity amongst low-income
households the National Energy Performance Strategy will need to use a combination of both mandated
minimum levels of performance which will need to increase over time, whilst also providing subsidisation
and fully funded schemes for low-income households to take advantage of energy improvement measures
their homes require.

18
https://www.ofgem.gov.uk/environmental-and-social-schemes/energy-company-obligation-eco

23
14. What delivery mechanisms would be most effective to provide targeted support?
Appointment of an oversight body to manage subsidy schemes
The National Energy Performance Strategy should include mechanisms for establishing a Government body
which is responsible for developing and implementing a national education campaign over a sustained
period in order to ensure the Australian population understand the critical importance and associated
benefits of improving the energy performance of buildings. This organisation could also act to manage
subsidy schemes and help to target those who qualify for such subsidies.
Partnership with relevant organisations who have touch points with qualifying households
There are several organisations who will be in contact with those in low-income households. These could
also be supported to deliver information and messages around availability of subsidies to increase energy
improvement measures and reduce energy costs.
Mandate utility providers to deliver energy improvements
In other countries such as the UK, utility providers are mandated to use revenues collected in the way of
‘green taxes’ to pay for energy improvement measures for low-income households. This provides another
mechanism to target qualifying households and generate uptake of improvement measures. Utility
providers receive a target which they must exceed in terms of activity generated. For those not achieving
the associated targets, significant penalties are applied.

24
RENTERS
15. What are the key opportunities to improve energy performance of residential buildings for renters?
Introduce minimum energy performance standards as a condition of rent
Although many other countries have shown that mandatory disclosure of energy performance is an essential first
step, they have also shown that mandatory disclosure alone will not deliver the scale of uptake required.
Minimum energy performance levels should also be introduced as a legal condition of making a home available
for rent. This is a natural progression following mandatory disclosure of energy performance, is a strategy being
used in many other countries, and will be essential in order to achieve the level of energy efficiency required to
deliver Australia’s decarbonization targets. A solid regulatory framework will be needed to support this and will
need to include sequenced and time-bound targets. The regulatory framework and associated targets will need
to acknowledge the differences between new and existing buildings as well as the varying conditions across
Australia’s various climate zones.

16. What options are available to overcome the split incentive for renters and landlords?
Mandating minimum energy performance standards as a condition of rent
The split incentive is a core reason that mandating a minimum19 level of performance is essential.

17. What options are available to support public and community housing tenants?
An opportunity for large scale activity
Public and community housing provides an excellent opportunity to generate large scale activity by
developing retrofit programmes which deliver multiple upgrades to multiple homes.
To help realise its 2050 goal, the UK Government has committed significant funding support to retrofit
through a £2 billion Green Homes Grant, a £1 billion Public Buildings Decarbonisation Fund and a £50 million
Social Housing Decarbonisation Fund demonstrator, which is the precursor to an overall £3.8 billion Social
Housing Decarbonisation Fund.
Making funding available to social housing providers with plans for delivery
To take advantage of financial grants and incentives, social housing landlords need to develop an investment
pathway to net zero. With strategies, investment plans and project programmes in place, they can respond
rapidly to funding calls and be well positioned to secure support and promote net zero projects.
Develop funded frameworks to enable the upgrade of social housing
The National Energy Performance Strategy should introduce mechanisms to deliver financial support for
social housing providers to develop projects and programmes which result in the uptake of large scale
energy improvement measures.

19
Filling the policy gap: Minimum energy performance standards for European buildings - Regulatory Assistance Project (raponline.org)
25
18. How can the energy performance of rental homes be made more transparent to prospective tenants?
Mandatory disclosure of energy performance
In order to increase the transparency and visibility of the energy performance / efficiency of a building,
Energy Performance Certificates should be provided to a building owner following an audit by a certified
auditor and should be designed in a way which illustrates the current level of energy performance of a
building, and clearly illustrates the additional improvement measures which could be implemented to
improve the energy performance of the building. The National Energy Performance Strategy must deliver
policy that makes it a legal requirement to disclose the energy performance rating of a building as a
condition of any sale or rent.
Use of energy performance as an input to illustrate value for prospective tenants
In Belgium energy performance is one input used to demonstrate value for money for tenants in rented
homes.20 The concept of a ‘reference rent’ is used whereby the ‘reference rent’ acts as a benchmark to help
prospective tenants assess value for money. Inputs include items such as size of property, age of property,
location – and now energy performance. Where properties have a higher level of performance the reference
rent is increased and can be used to potentially attract higher value for landlords.

19. How can governments and private sector support renters to improve energy performance?
Government should set minimum levels of energy performance
As mentioned above, minimum levels of energy performance will be the most effective way to drive the
scale of improvement required.
The private sector and industry will develop solutions to meet demand
The private sector and industry will develop and solutions to decrease energy demands, demonstrate
solutions that work for tenants/homeowners and are ready to service the demand that will be created by
implementing minimum levels of energy performance.

20
Homepage - loyers.brussels (in French or Dutch only)
26
COMMERCIAL
20. What are the key opportunities to improve the energy performance of new and existing commercial
buildings and operations?
Mandatory disclosure of energy performance
In order to increase the transparency and visibility of the energy performance / efficiency of commercial
buildings, Energy Performance Certificates should be provided to building owners following an audit by a
certified auditor and should be designed in a way which illustrates the current level of energy performance
of a building, and clearly illustrates the additional improvement measures which could be implemented to
improve the energy performance of the building. The National Energy Performance Strategy must deliver
policy that makes it a legal requirement to disclose the energy performance rating of a commercial building
as a condition of any sale or lease.
Mandatory adoption of recommendations
Following the provision of recommended measures which can improve a commercial building, there should
be a mandatory requirement to adopt improvements which fit within given financial boundaries. The
National Energy Performance Strategy should develop a framework to identify the optimum level at which
this should be set, and implement relevant legislation to mandate this as a minimum requirement.
Introduce minimum energy performance standards as a condition of lease
Although many other countries have shown that mandatory disclosure of energy performance is an essential first
step, they have also shown that mandatory disclosure alone will not deliver the scale of uptake required.
Minimum energy performance levels should also be introduced as a legal condition of making a home available
for rent. This is a natural progression following mandatory disclosure of energy performance, is a strategy being
used in many other countries, and will be essential in order to achieve the level of energy efficiency required to
deliver Australia’s decarbonization targets. A solid regulatory framework will be needed to support this and will
need to include sequenced and time-bound targets. The regulatory framework and associated targets will need
to acknowledge the differences between new and existing buildings as well as the varying conditions across
Australia’s various climate zones.
Introduce higher rates via commercial taxes for poor performing buildings
In order to provide an incentive to implement energy improvement measures the National Energy
Performance Strategy should introduce policies to enable the addition of higher rates via commercial taxes
to buildings with poor levels of energy efficiency. These taxes should be set by climate zone and type of
building and should be set at a level which encourages action.

21. What are the most cost-effective private interventions businesses, including small businesses, can make
to improve the energy performance of their buildings and operations?
Energy efficiency first
Insulation is proven throughout the world to be one of the most impactful and cost-effective ways to make
our buildings healthy, comfortable, climate friendly and cheaper to operate. However, it will also be
important to identify other measures which also reduce the energy demand of a building including
improving air tightness of buildings as well as high performance glazing.

27
22. What are the barriers to investment in better energy efficiency for commercial businesses?
A number of the barriers identified in question 8 will also be relevant for commercial buildings. The
following provides further focus on the barriers which may be most apparent in the commercial sector:
BARRIER POTENTIAL SOLUTIONS
No disincentive to maintain the The National Energy Performance Strategy should include policy
status quo. which imposes financial penalties linked to owners of commercial
buildings with poor levels of energy efficiency and which do not
implement available energy improvement measures. E.g.:
- Higher council rates for buildings with lower energy ratings.
- Higher council rates for buildings with higher levels of energy
use.
The funds raised by such policies could be utilised to provide
subsidies to reduce the cost of energy improvement measures for
others.
Lack of visibility of the problem for The National Energy Performance Strategy should introduce
commercial tenants. policies which build on existing frameworks to increase the
visibility of the energy performance of buildings. These could
include:
- Mandatory disclosure of energy performance of buildings as a
requirement of all property transactions.
- Adding energy performance ratings to council rate calculations
with the potential to also charge higher rates for poorer
performing buildings.
- Include a declaration of energy use to annual tax returns to
increase the visibility and provide a focus on an annual basis.
- Develop league tables of energy performance of buildings – this
could be done at national level to allow building owners to
compare .vs. a benchmark. It could also be created at state, local
council or city level to allow potential tenants to compare the
energy performance of buildings they are considering for use.
Lack of motivation. The National Energy Performance Strategy should include policy
which imposes financial penalties linked to owners of buildings
with poor levels of energy efficiency and which do not implement
available energy improvement measures. E.g.:
- Higher council rates for homes with lower energy ratings.
- Higher council rates for homes with higher levels of energy use.
The funds raised by such policies could be utilised to provide
subsidies to reduce the cost of energy improvement measures for
others.

28
SUPPLY CHAINS AND WORKFORCE
23. What support is needed for Australian manufacturing or other supply focused businesses to improve
energy performance?
Stable long-term targets and commitments from Government
It is essential for the supply chain to have stable long term targets and commitments from Government in
order to enable the investment in resource and solutions. Commitment on timeframes by climate zone will
provide confidence and assurance throughout the supply chain.
Realistic ramp-up targets to ensure long-term scalability
It is important that targets are set to allow a manageable ramp-up and to ensure that the industry builds
the pace required to deliver the scale of improvements and work required to achieve Australia’s national
energy targets.
A minimum requirement for the use of certified installers for all energy improvement installations
No government program should proceed without a requirement for installers to undertake the required
training and certification relevant for each associated energy improvement measure. This will ensure the
safety of installers during installation and also ensure the quality of the work matches that which is required
to deliver the energy savings and performance needed.
This will also give installation companies the assurance needed to encourage the training and development
of the workforce to ensure high levels of quality. Without such a requirement in place there is a significant
risk that untrained workers will offer measures at lower cost, making it difficult to compete and ultimately
driving quality standards down.
A minimum requirement for the use of third party certified products
Similarly to certified installers, all programmes driven by policies which result from the National Energy
Performance Strategy should include a minimum requirement for the use of products which are supported
by third party certification. This will provide assurance that products are assessed and deemed as being fit
for purpose in the application for which they are being used, and will ensure the highest levels of quality.

29
24. What are the most critical supply issues hindering energy efficiency action?
The need for action to attract and maintain sufficient trained and certified installers
Labour shortages will be main issue associated with the delivery of improvement measures at the scale
required. The challenge is not only for skills and training but also for attracting and maintaining installers
within the industry – this is currently a huge challenge which must be addressed.
Mechanisms to elevate the profile of jobs within the energy efficiency sector via additional benefits
In order to enable installers within the energy efficiency industry to attract and maintain talent the National
Energy Performance Strategy should develop a workstream to elevate the profile of jobs created in the
energy efficiency sector, and should investigate mechanisms to provide additional benefits to those working
in the energy efficiency sector. For example, those working in certain critical roles within the energy
efficiency sector could be awarded improved social benefits and lower tax rates. This will help the energy
efficiency industry compete with other industries for hugely important labour.
Update immigration skills lists to enable the attraction of experienced labour from overseas
The National Energy Performance Strategy should identify opportunities to work with existing Australian
immigration policy to update the list of associated skills which Australia is looking to attract, and should be
modified to include those skills which are required for the installation of energy improvement measures as
part of the wider effort to transform Australia’s building stock.
Ample capacity for insulation product and ready to serve demand
The insulation industry, including The Insulation Academy member Knauf Insulation, remains ready to
service the uplift in requirements which will be generated by the National Energy Performance Strategy.
Knauf Insulation commissioned a new manufacturing facility in the APAC region in 2021 and is the largest
glasswool facility in the APAC region.

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OTHER GENERAL REMARKS

A. Fire safety

It is crucial to ensure that energy efficiency is not delivered at the expense of fire safety. The National Energy
Performance Strategy should include consideration for the combustibility of materials proposed to be used within the upgrade of existing buildings to ensure that energy efficiency is delivered in a safe and effective manner.

B. Embodied Carbon

It is important that the National Energy Performance Strategy considers the life cycle carbon emissions of
Australian buildings and materials used in Australian buildings. Policies will need to include requirements for declaration of life cycle impacts of materials and buildings to harmonised standards (e.g. using Environmental
Performance Declarations to EN 15804).

New Zealand’s Building for Climate Change programme outlines a stepped approach whereby all new buildings will be required to firstly report Whole Life Embodied Carbon, followed by the introduction of embodied carbon caps which will act as upper allowable levels of embodied carbon. This approach provides a clear path for industry to plan and deliver materials and buildings which reduce the level of embodied carbon in buildings.

C. Moisture management

High performing, energy efficient buildings have to be protected against the moisture loading contained in warm indoor air. This task is carried out by vapour retarders and airtight membranes. It is essential that the energy improvements driven by the National Energy Performance Strategy also ensure that moisture is managed in an effective manner to minimise risk of condensation.

Increasing the drying capacity of construction systems has been proven internationally by the use of correctly implemented weather barriers and vapour permeable, non-combustible fibrous insulation types. This allows resilience against moisture ingress in extreme weather events and prevents accumulation of indoor moisture generated by the occupants. This drives long term durability of the structure and therefore reduces the lifetime carbon intensity of the building retrofits compared to poorly designed and implemented solutions. https://www.insulationacademy.org info@insulationacademy.org

ENDS

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