Save the planet… and cut your power bills

The humble Australian family home could become a quiet hero in helping the nation strive for net zero emission targets by 2050 – while also cutting power bills.

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But how do we make this happen?

"This means energy efficiency upgrades often pay for themselves within a few years, creating savings for homeowners well into the future.”

As winter heating bills come rolling in around the country, Australians are looking for opportunities to cut their energy costs and reduce their environmental footprint.

To achieve these goals, much focus has been on the country’s energy supply. Supported by household and business uptake, substantial amounts of renewable energy including wind and solar have been introduced into the electricity system.

At the same time, global and local factors have increased the volatility of energy prices, raising the cost of doing business and the cost of living.

Fortunately, some of the best tools to improve energy affordability and cut emissions are also the most cost effective – and they are available now, to us all.

Energy efficiency means getting more out of every unit of energy we use. Think modern LED bulbs delivering the same – or better – performance as old-fashioned incandescent lights while using 75 per cent less electricity. Or roof insulation keeping houses warm in winter and cool in summer with less reliance on the heater or air conditioner.

A new report from ANZ and the Energy Efficiency Council, Putting Energy Efficiency to Work, finds energy efficiency has not reached its potential in Australia.

And it’s not just business who can cut bills by tackling energy efficiency. The report finds the savings from household energy efficiency are substantial and can help Australian families fight inflation.

Ending bill shock

Australia’s energy bills have seen a lot of fluctuation in recent years and many Australians experience bill stress.

The American Council for an Energy Efficient Economy ranks the energy efficiency policy and performance of the 25 top energy-consuming countries in the world. Australia ranks worst for advanced economies within that group.

Countries are scored against their national efforts, buildings, industry and transport policy and performance. Australia rates well for national efforts and buildings, but poorly for industry and transportation.

There are a range of ways to increase the energy efficiency of a home, which makes it hard to estimate how much a household can save through upgrades and retrofits.

Nevertheless, modelling by the Australian Council of Social Service and the Brotherhood of St Laurence found a one-off capital investment of around $2000 for apartments and $5000 for houses can result in average savings of $290 a year for apartments and more than $1000 a year for houses. 

Thus energy efficiency upgrades often pay for themselves within a few years, creating ongoing savings for homeowners.

Reach for the stars

Modelling has shown that upgrading an average one-star home to four stars could save a household at least $2275 each year. 

Such upgrades can save more than three times as much energy as upgrading a home that already has a four-star rating and improving it to seven stars – which is the current minimum standard for new homes. In other words, the biggest energy and cost savings opportunities exist in the least efficient homes.

Upgrades to take a home from one up to four stars are relatively cost effective and include basic draught proofing, installing insulation and replacing inefficient appliances with modern, electric ones.

Heating and cooling accounts for 20 per cent to 50 per cent of energy used in Australian homes, depending on the climate zone. The good news is many simple things can maximise energy savings and reduce cooling and heating loads.

For example, reverse cycle air conditioning provides heat as well as cooling. It’s also 300-600 per cent efficient, which means it can take one unit of electrical energy and turn it into between three to six times as much heating or cooling energy. Under mild conditions, some products can achieve efficiencies of over 1000 per cent.

How to get started

You have a family home, and you want to do the right thing. What is the road map to providing an energy efficient home for your family?

The star system is essential to nailing efficiency in all its forms around the house.

The Nationwide House Energy Rating Scheme (NatHERs) star ratings are a guide to the thermal performance – heating and cooling needs – of a home’s construction.

Star ratings are from one to 10 and based on information about the home’s design, construction materials and the climate of its location.

Australia is transitioning from a six to seven-star minimum for new builds under the National Construction Code.

Whilst NatHERS star ratings enhance the energy efficiency of new homes, until recently Australia has not had an equivalent program for existing homes.

In April 2023 the Australian Government announced it would pilot a new RapidRate tool to estimate an energy star rating for existing homes, supporting households with lowering energy bills.

To get started, consider a home energy assessment which is available to help you understand your existing homes’ energy performance. These are subsidised under some state and territory government programs.

Find out more about working with an assessor here.

Tsen Wong is Head of Energy Transition, Resource Energy and Infrastructure, ANZ Institutional.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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