Australians have had a long-running love affair with using gas in their homes. For years, it was considered the quicker and easier option for cooking, heating your house or your water.

But whether homeowners will be able to cook with gas in the future with the decarbonisation of the grid and the electrification of homes is up for debate. It’s becoming a hotly contested issue both in Australia and globally.

This issue forms a key part of federal and state government energy policies as a way of achieving their net zero emissions commitments.

For buildings, these energy efficiency policies are looking to shift gears away from the traditional focus on the building fabric, ‘star ratings’ and how much energy a building consumes.

Instead, the focus is now on energy regulation, decarbonisation/electrification of buildings, emissions reductions, energy security and bill savings. Measuring and regulating the embodied emissions of materials going into buildings is another key focus.

The types of measures resulting from this includes:

• fast tracking the uptake of renewables and electrification of buildings
• onsite storage systems (solar panels and battery storage systems for homes)
• fast tracking the uptake of electrical vehicles and charging stations into homes
• shifting from regulating the operational energy, and extending to also potentially regulate the embodied energy (carbon) of materials that go into the construction of a building
• differing and more efficient types of hot water systems (heat pump hot water systems) and heating/air conditioning systems, etc.

There are both opportunities and risks for the residential building industry over the next five to 10 years due to the impact of these types of energy policies. They will also result in changes to what a home of the future will require.

A new National Energy Strategy

One of the key policy platforms the Australian Labor Party (ALP) took to the last federal election was its environmental credentials. The first 100 days of the Albanese Government and 2022 Budget was as expected; climate change, energy bills reduction and energy stability had become primary focus areas.

For example, the federal government is in the process of establishing a new National Energy Performance Strategy that’s expected to be signed off by Energy Ministers mid-2023. It will set the Government’s energy policy roadmap over the next five years.

The Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently consulted on a discussion paper to inform the strategy, seeking views on five areas: governance, residential, commercial, industry and supply chains.

HIA put in a detailed response to the paper focused on several core themes, see text box for more information.

The devil is in the detail

There are multiple layers that lie underneath the proposed key decarbonisation policies, and what they would mean for buildings. This includes the electrification of buildings and mandatory solar panels on roofs of homes, battery storage systems and electrical vehicle charging for homes and apartments.

These policies would result in new or different rules in the National Construction Code (NCC), standards and planning rules, impacting builders and more than likely increasing construction costs for new homes and apartments.

This is a critical issue for the residential building industry. HIA has advised caution to Government, emphasising that consultations to gather a broad range of stakeholder views and solutions should be considered.

We also highlighted the emerging issues from the installation of onsite renewable energy. This must be adequately addressed if whole scale change is to occur. Present issues include:

• lack of suitable installation standards
• fires from solar inverters
• availability of roof space and roof type
• quality of solar panels (including service life and cracking panels)
• disposal issues
• panels turning into dangerous debris in high wind events
• water ingress due to roof penetrations not being adequately flashed
• loading of roof trusses
• insurance issues due to panel damage from hailstorms.

There is also a workforce transition issue. For example, Victoria alone has around 20,000 existing licensed gas fitters who will be required to retrain into new areas.

A watching brief

HIA will closely monitor this work over the next 12 months, particularly as the Government moves into consulting and designing these strategies. Our experience shows that once the high-level policy commitments have been set, it’s difficult to wind them back or control how they are delivered at an individual building level.

HIA understands how important it is that the transition to any change is achieved with minimal disruption to businesses, is not cost prohibitive and is delivered over a phased-in period commensurate with the significance of the change. We will strive to ensure that any reforms to net zero are proportional and delivered in a practical and affordable manner for industry.

National Energy Strategy: HIA’s response

1. New homes are already high-performing buildings and future energy settings need to shift to existing homes where real gains can be achieved.
2. If we move to decarbonisation and the electrification of homes, there are technical issues and transitional impacts that must be resolved first.
3. The Government must support and incentivise industry to transition to a new ‘green workforce’.
4. The Government should provide incentives, rebates and regulatory offsets to facilitate and fast-track the uptake of more energy-efficient and innovative materials.
5. If we move to measuring and regulating the embodied emissions of building materials, it must be led and informed by the industry.
6. Governments should support the residential building industry in research and development.
7. There needs to be a full-scale review and simplification of current and future energy- efficiency rules to focus on more practical and easy-to-use outcomes.

For more information, check out HIA’s submission online.

First published on 3 April 2023