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We need a ‘lemon law’ to make all the homes we buy and rent more energy-efficient


A long overdue increase in energy efficiency requirements for new homes is part of revised Australian building standards effective May 1. All new homes must have one minimum 7 star energy label for the entire house from October, after a transitional period of six months.

It is a critical step in responding to the climate crisis and decarbonising Australian society. It will also make our homes more affordable and comfortable to live in, and improve our health and well-being.

These regulations affect the approximately 150,000 new homes built across Australia each year. But what about the other 10.8 million homes are we living in yet?

Any transition to a low-carbon future should include major improvements to existing homes. Housing accounts for approx 24% of total electricity consumption and 12% of Australia’s CO2 emissions.

As a nation, we spend at least as much on renovations and retrofits as we do on building new homes. Improving the energy performance of existing homes should receive at least as much attention as new homes to help make the transition to low-carbon housing.

Read more: 7-star housing is a step towards zero carbon – but there’s a lot more to do, starting with existing homes

How do you know if a house is a lemon?

Australians have access to a lot of performance information appliances And vehiclesbut almost nothing about the quality and performance of our accommodation.

When we buy a device or a car, we can see how much energy it consumes and how much it costs to drive. We can then compare options and improve our decision making.

We also have rights if our purchase does not perform as described. Australia has no specific “lemon lawlike the United States. Nevertheless, a series of laws protect buyers of both new and used vehicles.

But when it comes to our biggest and most important purchase decision – buying or renting a home – we are entitled to nothing at all in terms of information about its energy efficiency and readiness for a sustainable future. The little information provided is often misleading.

Read more: ‘I’ve never met them’: What will motivate landlords to fix cold and expensive houses for tenants?

In other countries, energy performance must be made public

Energy labels are used for homes worldwide. These schemes assess and compare the energy consumption of homes to help people decide what to rent and buy.

Energy labels are important. They tell us how much we are likely to spend on essential activities such as heating and cooling our homes. In the midst of a cost-of-living crisis, including rising energy prices, this matters to all Australians, especially those who are struggling.

The United Kingdom’s energy performance certificate informs potential buyers and tenants about a home’s energy rating, energy costs and potential for improvement.
Source: Energy Performance Certificate, GOV.UK, CC DOOR

Australia had a world-leading residential energy rating when it was passed into the ACT in 2003. Since then, progress has stalled on a national regime similar to those introduced worldwide in recent decades.

Energy labels also provide insight into the underlying condition of our homes. Housing in Australia built before the early 2000s typically has only one 1-3 star energy label. That level of performance doubles energy bills and emissions more than double compared to a new home.

People looking to buy or rent could avoid the housing equivalent of a lemon if we had a national scheme requiring a standard, independently verified energy performance rating to be made available to them. This would create an incentive for sellers and landlords to improve the energy performance of homes. It would also give policymakers a national view of where retrofit programs should best be targeted to meet our emission reduction commitments.

Read more: Homes with higher energy ratings sell for more. Here’s how Australian owners were able to make money

What are the prospects for such a scheme?

Discussions are taking place in Australia on introducing a requirement for households to obtain some sort of energy or sustainability rating for their property, possibly when selling or renting out. A similar requirement is in effect in other locations such as Europethe United Kingdom and even the ACT.

We have the resources and knowledge to build a robust system that is: accurate and holistic, robust and consistent, applied and clear, transparent and adaptive.

The advantages of such an arrangement include:

  • encouraging energy efficient retrofits of existing homes for the health and comfort of Australians

  • supporting social justice between people living in older homes and people in newer homes, and particularly for renters and low-income households

  • Giving Australians a better understanding of the homes they rent or buy, in the same way they choose their appliances

  • reducing residential emissions to help achieve the goal of net zero emissions

  • providing information to inform and develop policies for existing homes which are then aligned with policies for new homes.

Read more: Will 7-star homes really cost more? It depends, but you can keep costs down in a few easy ways

The key is not to take a cheap job here. That would waste the effort, time and money we put into retrofitting homes, and risk failing to meet our climate commitments. It would also mean that our most vulnerable households would find it even more difficult to access decent, energy-efficient homes.

When we do a good job, we all have access to independently verified information. It helps solve market failures and provide peace of mind about the places we live, with the potential to reliably and cost-effectively upgrade them.

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