Pressure mounts for mandatory disclosure of home energy efficiency ratings

The Royal Automobile Association (RAA) is calling on the South Australia government to mandate the disclosure of energy efficiency ratings for all homes at the point of sale or lease, to give buyers and renters an idea of what their cooling and heating bills might look like.

According to the RAA, 70 per cent of South Australia’s housing stock was built before minimum energy efficiency standards were introduced, back in 2003. At the time, the standards required new houses to be built with a rating equivalent to between 3.5 and 4 stars, depending on the state.

Today, all new homes must achieve a 7-star energy rating (out of 10) under the National Construction Code, which was introduced in 2022, adopted by states and territories in 2023, and put into effect by all states and territories last year.

Unfortunately, according to the RAA, the average existing Australian home boasts an energy star rating of only 1.7 stars.

As such, homebuyers and renters are paying up to four times more on their energy bills for heating and cooling.

“Most people have no idea about the energy efficiency of their home and how that impacts how much extra they’ll pay to heat and cool it,” said Nick Reade, RAA CEO.

“A home with a 2-star rating – which is above the Australian average – will require four times the energy to cool in summer and heat in winter compared to a 7-star rated home. This means some households may be paying up to $2,000 more than others to heat and cool a similar-sized home.

“With the cost of living increasing, buyers and renters need to be able to choose a property with their ‘eyes open’ on the likely cost of heating and cooling.

“We know the energy efficiency of our fridges and dishwashers and the fuel economy of our cars. It makes sense that we should know the same about our homes – especially when rent or a mortgage is already the biggest expense for most families.”

Renters are particularly vulnerable, considering that it is much more difficult to make simple upgrades to the house when you don’t own it, and landlords weren’t required or incentivised to improve energy efficiency.

The RAA is therefore also calling on governments to explore additional measures to help, including requirements that landlords properly insulate rental homes and upgrade appliances and air conditioners at end-of-life.

“Victoria has introduced minimum standards for rental properties including roof insulation and draught-proofing, and the ACT has required mandatory disclosure of home energy ratings since 2001,” said Reade.

“While initiatives like the Cheaper Home Batteries program and Solar Sharer offer will help some South Australians, renters will miss out on battery rebates, and the three hours of free midday power doesn’t address peak energy use in mornings and evenings when families are home.

“South Australia’s older, poorly insulated houses are exposing residents to high energy bills and unsafe indoor temperatures. During extreme weather conditions, ambulance callouts, emergency presentations and hospital admissions increase, placing strain on an already stretched SA health system.

“It’s time for real upgrades, not band-aids.”