Much like the star ratings you see on appliances, new homes are required to be built to energy efficiency standards. Homes account for about 10% of Australia's total carbon emissions. The federal government has been steadily increasing energy efficiency requirements on newly constructed houses to meet 2020 carbon reduction goals. Since May 2011, all new homes or renovations in Australia must meet a minimum six-star or equivalent energy rating (depending on your state or territory).

A government study into ACT house prices found that an energy rating improvement of one star would increase market value by three per cent on average, which can amount to tens of thousands of dollars.

The problem with house energy ratings

Building designers use special software to ensure that the building plan is consistent with efficiency measures. There are also other rating methods, such as meeting the deemed-to-satisfy (DTS) provisions of the construction code.

The problem is that apart from the initial design stage, there's typically no further assessment to ensure recommended energy saving requirements are actually installed. This has resulted in cases where there've been clear discrepancies between the energy rating listed on paper and the actual energy efficiency for some new homes being built.

So ultimately, because an energy efficient home potentially costs more, consumers may be paying a premium for something they aren't getting and anticipated energy savings that aren't occurring. In some cases, owners have been shocked when independent assessors rated their homes as far less energy efficient than they were told originally. This could be the result of an incorrect evaluation, or an issue with the building and construction of the dwelling.

Our investigation into house energy ratings in 2011 found that we need to improve our building energy ratings system in order for it to continue to add value to homes and improve energy efficiency - and unfortunately, not much has changed in the current climate. The following provides the results of our investigation.

Plans vs buildings: the energy discrepancy

Dominic Ogburn is a building consultant and training specialist with more than 25 years' experience in the building industry. He's also a NSW Fair Trading Award winner for advancing consumer protection in the industry. In his opinion, the current regulation of building energy ratings for new homes is "pathetically inadequate".

"Basically, the building industry is left to self-regulate when it comes to installing energy savings measures," he said. "It's a conflict of interest for some developers who want to employ cost-cutting measures when completing a build."

But the buck doesn't always stop with builders. "Energy assessors typically work off the design, so you need to check whether they have the qualifications to perform post-build inspections properly," says Ogburn.

Ogburn provided CHOICE with evidence of homes that didn't comply with the plans provided through energy ratings software. One building was missing compliance elements such as a rainwater tank, ceiling fans, properly installed draught seals, ventilation windows in the laundry and ceiling insulation, to name a few.

"At the end of the day, consumers are paying a premium for a product that is not delivered as specified," says Ogburn.

Air leaks reduces energy efficiency

A lot of homes leak air, which has a big impact on the energy efficiency of the home. Jan Brandjes tests airflow issues to see if builders have met the gap-sealing requirements.

"I've tested hundreds of homes and found them to be consistently leaky. In many cases, exhaust fans in the bathroom and unsealed downlights are causing a lot of air leakage," says Brandjes.

Fortunately, many of the problems can be fixed easily and for much less than adding other energy-saving measures such as solar. For a new home under construction, this cost can be as little as $300, or $1000–1500 for existing homes.

Bad installation

Even if you have the highest-performing thermal windows, bad installation can mean you'll lose a lot of energy efficiency. Dick Clarke, a building designer with 35 years' experience in energy-efficient design, is sustainability director for the peak industry body Building Designers Association of Australia. He's also a technical adviser on the Your Home Technical Manual.

"If you have crappy installation, you will lose energy efficiency," says Clarke bluntly. "Unfortunately, the certification process allows a conflict of interest that often downgrades the 'as built' result from the 'as designed' goal."

In addition to bad installation, people aren't properly educated on the most efficient ways to use buildings to their design strengths, he says, again reducing energy savings.

Homes receive incorrect energy ratings

Jenny Edwards assesses homes at the design stage for energy-efficiency requirements in the ACT, and is licensed by the Association of Building Sustainability Assessors. She bought a home with a rating of three stars, which was downgraded to a one-star rating after revised calculations. It had a good orientation and sensible levels of window glazing, but she found its thermal potential was significantly overstated. This was because the assessment didn't include the 21 unsealed downlights and two exhaust fans without dampeners. The house had also received a good score for wall insulation even though the walls were uninsulated, and ceiling insulation was patchy or non-existent.

Gillian and Stephen Kozicki's house in north-western Sydney required more than $100,000 worth of additional work to meet minimum government building and energy compliance issues, despite being certified for occupation. This was discovered when they asked Dominic Ogburn to audit the house. The vendor then exercised a contractual right to rescind the sale at the last minute. Gillian and her family were left looking for a hotel room, and later renting until they found a replacement home. After great time and expense, she complained to the Building Professionals Board, and after eight months, minor disciplinary action was taken.

Recommendations to ensure the correct house energy rating

  • New home builders, renovators and existing home owners can visit yourenergysavings.gov.au for general advice on creating an energy-efficient home.
  • Use an independent assessor to assist throughout the building or renovation cycles, or as an evaluation method for existing home owners. Just make sure your assessor is qualified to perform the tasks you require.
  • While mandatory post-design energy compliance checks would improve efficiency standards, it would also see upfront costs rise.

Increasing the energy rating of your house

Given that 38% of home energy use comes from heating and cooling, there are several ways to increase energy savings.

  • Insulate: A well-insulated roof can save you up to 45% on heating and cooling. A further 20% can be saved with wall insulation. Roof and ceiling insulation should have an R-Value of 5.1 and wall insulation an R-Value of 2.8. Good insulation can drastically reduce the cost of energy bills.
  • Shade: Shading can block up to 90% of the heat gained from direct sunlight.
  • Prevent air leakage: Draught sealing can cut up to 25% off your power bill. Consider installing fans and vents that close automatically, and seal doorways with a draught stopper at the base of the frame.

Who's regulating home energy star ratings?

All new homes and renovations must meet energy-efficiency requirements mandated through the National Construction Code. It's then up to the state and territory bodies to implement the code and regulate the industry.

Other important bodies include NatHERS, which sets out the standards for software requirements, and the Council of Australian Governments, which is in charge of developing the National Strategy for Energy Efficiency in partnership with the government.