How are home energy ratings calculated?

• Energy star ratings systems exist for your appliances and your building – but what do they mean?
• By prioritising the star rating on new appliances, you can immediately start saving money
• NABERs and NatHERS ratings assess the energy efficiency of buildings – and small changes can go a long way.

When it comes to your home having star quality, it’s not all about looks and location. The real star quality lies in energy performance. Get it right, and you could not only save money, you’ll be doing your bit for the environment too.

We take a look through three of the most common star ratings systems in Australia. Here’s what they mean for you, your home, and your bank balance.

Our top tips can help you make the most of them and reduce your home’s energy consumption.

Equipment Energy Efficiency Scheme: Energy Ratings

The star-rating system most of us are likely to be familiar with is the energy rating – star stickers – on our household appliances. They’ve been a feature of our lives for the past 30 years, having been introduced to the country in 1986 and becoming mandatory in 1992¹.

Australia was one of the first countries to introduce a mandatory appliance energy rating labelling scheme. In fact, it’s only pre-dated in the world by Canada, which introduced energy ratings labels in 1978, while the US followed a year later².

The scheme is a shared initiative of the Australian Government, states and territories and the New Zealand Government. The premise of the stars – which traditionally go from one to six, but on some products now go up to 10³ – is simple.

The higher the star rating, the less energy it uses, and therefore the cheaper it will be to run.

The lower the star rating, the more inefficient it will be and the more expensive it will be to run.

There’s also a number in the middle, which gives you how much energy the appliance will use during the course of an average year – this number is provided in kilowatt hours (kWh).

What type of appliances have an Energy Rating label?

Items generally considered white goods – household fridges and freezers, dishwashers, washing machines and dryers – must have an Energy Rating label. Computer monitors, single phase air conditioners, and single duct and portable air conditioners have them too⁴.

How do I find out the Energy Rating of my appliance?

When new, the appliance comes with an energy rating sticker. But if you’ve removed it or bought an appliance second hand without one, you can check your appliance’s energy rating online, as well as projecting the 10-year cost of running it.

How do I compare appliance Energy Ratings?

When comparing products based on their Energy Rating stars, it’s important to compare products that are the same capacity, rather than comparing them solely on their energy rating.

If you buy something too big for your needs that has a high energy rating, you’ll likely end up spending more money than if you’d bought a smaller model with fewer stars⁵.

When you buy a new appliance, it’s always smart to consider whether you need to update your home insurance, too.

What difference does an energy star make to my energy use?

Using washing machines as an illustration, every star cuts 27 per cent off the running cost⁶.

For example, a 2.5 star 10kg washing machine, used once daily, would use 776kWh of power, whereas a 3.5 star version would use 567kWh. In Victoria, this would equate to almost $600 over 10 years⁷. A 5 star model would save you almost $1,200 over 10 years in comparison to a 2.5 star version⁸, while a 10 star model would save almost $2,000 over 10 years⁹.

Just one star can make a real difference in the running costs of other appliances, namely:

• 23 per cent difference for a fridge freezer¹⁰
• 20 per cent for a TV or computer monitor¹¹
• 30 per cent for a dishwasher¹²
• 15 per cent for a dryer.¹²

So, if you’re in the market to buy a new appliance, it’s worth taking the Star Rating into account.

The Nationwide House Energy Rating Scheme (NatHERS) – Home Energy Star Ratings

NatHERS is a government scheme, established in 1993, that enables energy assessors to estimate the amount of heating and cooling a home needs to stay comfortable all year round¹³ – in other words, how energy efficient it is.

The NatHERS tools assessors use have been created from research conducted by CSIRO, and the results are then converted into a star-rating – rating your home between 0-10 stars.

New homes built in Australia, and some renovations, need to meet at least a 6-star energy rating in line with National Construction Code (NCC) requirements in most states and territories*. And, of course, a home that is more energy efficient is cheaper to run¹⁴, too.

What do NatHERS assessors look at when assessing a home?

The home’s layout and orientation is taken into account, as well a number of other factors, including the size and function of the rooms, the size and specification of the openings – doors and windows – as well as the building materials used, the type of construction, and it’s orientation and location¹⁵. Insulation, fans, lighting and floor coverings will also be assessed.

What’s not considered when NatHERS assesses a home’s energy efficiency?

Anything that uses energy but isn’t ‘permanent’ – for example, appliances, lights and hot water systems, as they’ll likely be replaced numerous times during a building’s life.

What do the 0-10 home energy stars mean?

Effectively, the higher the star rating, the better the building’s ability to keep people at a comfortable temperature, regardless of the weather outside.

At one end of the scale, a zero rating means the building’s virtually incapable of impacting the effects of hot and cold weather, while a 10-star home may be able to operate year-round without any artificial heating or cooling.

The minimum rating for any new-build – and some renovations – is 6-star in most states and territories*.

How can this information help me reduce my energy output?

By understanding your home’s energy performance, you can take action to help make your home more energy efficient – for example, replacing windows or introducing shade.

NatHERS is also introducing a ‘Whole of Home’ assessment to take into account heating and cooling appliances, hot water systems, lighting, pool/spa pumps, on-site energy generation and cooking and plug-in appliances.

By understanding your home’s energy output – and its ability to effectively self-regulate – you can save money on energy costs, as well as reducing your environmental impact.

National Australian Built Environment Rating System (NABERS)

Our third star system is NABERS – a government ratings system that measures the environmental performance of buildings. It’s primarily used for commercial buildings – but importantly, it’s also used for apartment buildings so if you rent or own an apartment it’s worth understanding how the system works.

How does the NABERS rating system work?

NABERS is measured on a 6-star scale, with 1 star labelled as ‘making a start’ and 6 stars being ‘market leader’. NABERS measures efficiency across energy, water, waste and the indoor environment¹⁶.

Why do some buildings have a NABERS rating?

It can help identify ways for building owners and tenants to save money, and is a way of measuring and communicating the environmental performance of the building.

Around 40 per cent of carbon emissions worldwide come from buildings, and they use approximately 40 per cent of the world’s energy and 30 per cent of the drinking water¹⁷.

Why does a NABERS rating matter?

If you live in an apartment building, a NABERS rating may save you money on energy and water bills. It’s estimated that apartment owners’ energy and water costs can be reduced by up to 30 per cent by improving the building’s NABERS rating¹⁸.

Having a good NABERS rating may increase the building’s attractiveness to potential buyers. 80 per cent of people want information about a building’s environmental performance before completing on a purchase¹⁹, as well as lowering running costs.

A building’s NABERS Energy for offices rating can be significantly improved as part of a major refurbishment, such as replacing or upgrading central air-conditioning systems and equipment.

Building owners can also improve the energy efficiency of their building by making small changes such as:

• Installing energy efficient lighting – switching to compact fluorescent or high efficiency LED luminaires or lamps can cut electricity use for lighting by up to 75 per cent
• Ensuring their building management system allows for the control of lighting, heating and cooling systems and managed effectively
• Installing shading, insulation and double glazing to reduce the need for air conditioning.

How to reduce home energy consumption

There are numerous ways to cut the amount of energy your home uses – and reduce the impact on your bank balance. Here’s our top ten.

1. Always switch off appliances where possible, rather than leaving them on standby. In standby mode, you increase your energy consumption by up to 3 per cent²⁰.
2. Set your fridge to 3-4ºc and freezer to -15 – -18ºc. Each degree lower uses five per cent more energy²¹.
3. Wash clothes in cold water where possible. Heating water is the biggest energy user when washing clothes²², using up to 80 per cent more energy than a cold wash²³.
4. When buying new appliances, always choose the right size for your needs, and pay attention to the energy rating stars. And don’t forget to add them onto your contents insurance.
5. Always dry your clothes naturally if possible (some states are better than others for this!)
6. Use your blinds to keep out the heat – or keep it in – as well as at night.
7. Think about your heating sources – small portable heaters can use a significant amount of energy.
8. Replace halogen light bulbs with LEDs – LEDs use up to 80 per cent less energy and can last 10 times longer²⁴.
9. If you’re replacing your windows, consider double glazing, which can prevent up to 30 per cent heat loss²⁵.
10. Set your aircon to 18-20ºc for cooling and heating to 25-27ºc. For every degree increase in heating or cooling, your energy use can rise between 5-10 per cent²⁶.

If you update appliances in your home, make significant purchases, or renovate your home, make sure you review your sum insured so everything’s covered.

For help estimating building or contents sum insured you can use these handy calculators.

¹ https://www.energy.gov.au/government-priorities/appliances-lighting-and-equipment#:~:text=The%20Energy%20Rating%20Label%20also,national%20labelling%20scheme%20in%201992
² https://www.energy.gov.au/government-priorities/appliances-lighting-and-equipment#:~:text=The%20Energy%20Rating%20Label%20also,national%20labelling%20scheme%20in%201992
³ https://www.energyrating.gov.au/consumer-information/understand-energy-rating-label
⁴ https://www.energyrating.gov.au/industry-information/publications/inter-governmental-agreement-greenhouse-and-energy-minimum-standards-gems-legislative-scheme-original
⁵ https://www.energyrating.gov.au/consumer-information/understand-energy-rating-label
⁶ Energy Rating Calculator
⁷ Energy Rating Calculator
⁸ Energy Rating Calculator
⁹ Energy Rating Calculator
¹⁰ Energy Rating Calculator
¹¹ Energy Rating Calculator
¹² Energy Rating Calculator
¹³ https://www.nathers.gov.au/
¹⁴ https://www.nathers.gov.au/Whole-of-Home-Calculations-Method
¹⁵ https://www.nathers.gov.au/Whole-of-Home-Calculations-Method
¹⁶ https://www.nabers.gov.au/about/what-nabers
¹⁷ https://www.nabers.gov.au/about/what-nabers
¹⁸ https://www.nabers.gov.au/ratings/spaces-we-rate/apartment-buildings
¹⁹ https://www.nabers.gov.au/ratings/spaces-we-rate/apartment-buildings
²⁰ https://www.energy.gov.au/households/appliances
²¹ https://www.energy.gov.au/households/appliances
²² https://www.energy.gov.au/households/appliances
²³ https://www.climatecouncil.org.au/top-tips-improve-home-energy-efficiency/
²⁴ https://www.climatecouncil.org.au/top-tips-improve-home-energy-efficiency/
²⁵ https://www.redenergy.com.au/living-energy/smart-homes/a-complete-guide-to-double-glazed-windows
²⁶ https://www.climatecouncil.org.au/top-tips-improve-home-energy-efficiency/
* In New South Wales, the online Building Sustainability Index (BASIX) system replaces the NCC energy efficiency requirements and adds other aspects of sustainable development. BASIX accepts NatHERS software results as one way of meeting its separate targets for the heating and cooling performance of the building.