Household energy · Build Street

Retrofitting older Australian homes for energy efficiency

About 70% of Australia's 11 million existing homes were built before minimum energy efficiency standards were introduced and have an average rating below 3 stars. By comparison, new homes in adopting jurisdictions generally must meet a 7-star-equivalent standard under the National Construction Code. Despite this performance gap, most upgrades to existing homes remain voluntary.

A 2023–24 study of 1,091 NSW houses and townhouses found that homes built before 2004 averaged just 2.1 NatHERS-equivalent stars. After weighting the results to the wider housing stock, researchers estimated that almost one million pre-BASIX NSW homes were in the two lowest rating categories. Private rentals also had less insulation and less access to fixed cooling than comparable owner-occupied homes.

SECTION 01 · Legacy housing stock

How energy efficient are Australia's older homes?

Around 70% of Australia's 11 million existing homes, roughly 7.7 million properties, were built before minimum energy efficiency standards were introduced, with an estimated average energy rating below 3 stars.

Using current housing-stock modelling, RACE for 2030, drawing on CSIRO's Building Stock Model, estimates that more than 80% of Australian homes are rated 2 stars or lower. This compares with the NCC 2022 7-star-equivalent benchmark for new homes in adopting jurisdictions. NCC 2022 also includes a Whole of Home energy budget that most existing homes were not designed to meet.

Source: No single ABS dataset publicly breaks down the full national housing stock by construction year against these standards milestones. The 70% figure is DCCEEW's estimate; the 80%+ figure is a separate RACE for 2030 estimate drawing on CSIRO's Building Stock Model.

How do NSW private rentals compare with owner-occupied homes?

Private rentals built before 2004 in NSW carry lower average ceiling and wall insulation than owner-occupied homes of the same age, and 24% have no fixed cooling at all, against 11–12% of owner-occupied homes. However, the report found no statistically significant difference in hot or cold weather comfort ratings between privately rented and owner-occupied homes.

Social housing tells a different story: it shows the widest comfort gap of any tenure. In the study, 73% of social housing dwellings received a 1-star cold-weather rating, against 45% of owner-occupied homes, and 54% received a 1-star hot-weather rating, against 36% of owner-occupied homes.

Source: NSW DCCEEW, Better Homes, Brighter Futures, 2026, field study of 1,091 NSW houses and townhouses, 2023–24 (pp.37, 41–42).

SECTION 02 · The retrofit sequence

What are the main stages of retrofitting an older home?

Space heating, hot water and cooling account for 38%, 29% and 16% of household energy costs respectively in older NSW homes, or about 83% combined. Pools and spas (10%) and lighting (8%) make up most of the remainder.

Proportions vary between climate zones. Government guidance and retrofit programmes commonly group measures into three broad categories: the building shell, major appliances, and onsite generation and storage.

The three broad retrofit categories are:

• Building shell: draught sealing, ceiling and wall insulation, curtains, external shading and, where justified, better windows.
• Appliances: reverse-cycle air conditioning for heating and cooling, a heat pump or solar hot water system, and an induction cooktop.
• Generation and storage: rooftop solar and, depending on the household's load pattern and budget, a battery.

Source: energy.gov.au household guidance; NSW, ACT and Victorian government retrofit program design.

SECTION 03 · Insulation

How much can insulation save on heating and cooling costs?

Ceiling insulation alone can cut heating and cooling costs by up to 45% or more, and insulating the roof, walls and floor together can save over 50%. No official dataset publishes a national average installed cost for insulation in Australia, and reliable, independently verifiable cost figures were not available at the time of writing.

Ceiling insulation is generally considered the easiest of the three types to retrofit. Wall insulation is typically installed during a renovation, while cavities are already open. Underfloor insulation suits homes on stumps or with subfloor access.

Source: Payback estimates from government sources vary: Sustainability Victoria cites 5–6 years, while a federal government page cites a 3–5 year payback. Source: energy.gov.au, Insulation and draught proofing; ICANZ; Sustainability Victoria.

SECTION 04 · Glazing and windows

How much energy does double glazing save?

Double glazing cuts heat loss by up to 30% compared with single glazing, and up to 40% of a home's heating energy can escape through windows alone. Windows are one of the largest heat-gain and heat-loss pathways in an Australian home.

No official source publishes a national average price for the work, and reliable, independently verifiable cost figures were not available at the time of writing.

Window performance can be improved through several separate measures: sealing gaps around frames, fitted curtains and pelmets, external shading, secondary glazing, double-glazed units, and replacement of poorly performing frames or glass. These measures address different forms of heat transfer and are not equivalent to full double glazing.

Source: These figures measure different things (heat-loss reduction vs heating/cooling cost reduction vs heating-bill reduction) and are not directly comparable or additive. Source: energy.gov.au, Insulation and draught proofing, and Windows; ICANZ.

SECTION 05 · Electrification

How much does home electrification cost in Australia?

A heat pump hot water system uses around 30% of the energy of a conventional electric unit. Reverse-cycle heating and cooling runs at 300 to 600% efficiency, meaning it can deliver three to six units of heating or cooling for each unit of electricity used. A heat pump hot water system typically costs $2,000 to $6,000 installed, according to NSW Government guidance.

Payback periods vary by household and depend on the appliances being replaced, local energy tariffs, fixed gas supply charges, climate, equipment condition and available incentives. Hot water has the clearest published cost range of the three.

Source: energy.gov.au, Hot water systems and Heating and cooling; NSW Climate and Energy Action. Reverse-cycle and induction costs are not consistently published nationally.

SECTION 06 · Rebates and incentives

What home energy rebates and loans are available in Australia in 2026?

The federal government committed $1.3 billion to a broader household energy upgrades package, including $1 billion administered through the Clean Energy Finance Corporation's Household Energy Upgrades Fund for discounted finance, and $300 million for social housing upgrades. The fund is intended to reach more than 110,000 households. By the end of 2025, it had supported more than 4,100 homes and over 10,000 completed technology installations.

State and territory programmes fill in the rest, and support varies widely. NSW's relaunched Home Energy Saver is a $557 million package: $480 million in zero-interest loans and $77 million for targeted discounts. The loans opened on 17 June 2026, while discount applications had not yet opened at the time of writing.

Source: DCCEEW and energy.gov.au; NSW Climate and Energy Action; Victorian Government; ACT Climate Choices; WA Government; ReCFIT Tasmania; SA Department for Energy and Mining; Queensland Government; NT Government. NSW programme figures reflect the 17 June 2026 relaunch announcement. Other programme settings were reviewed in July 2026 and may change.

SECTION 07 · Compliance

Do older homes have to meet the same energy standards as new builds?

In jurisdictions that have adopted the NCC 2022 residential energy efficiency provisions, new homes must meet the applicable 7-star-equivalent standard and a Whole of Home energy budget. Existing homes generally have no minimum whole-home energy rating.

The main exceptions are jurisdiction-specific: major renovations or additions may trigger building approval and energy efficiency requirements; the ACT's mandatory rental ceiling-insulation standard commenced 1 April 2023, with most affected properties needing to comply by 30 November 2026; and Victoria already requires an energy-efficient fixed heater in the main living area of applicable rentals, with broader minimum energy efficiency standards phasing in from 1 March 2027.

Source: NatHERS; Business Queensland; Department of Energy, Environment and Climate Action (Victoria). Existing-home energy ratings cannot be used to demonstrate compliance with the National Construction Code.

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