Published 15 July 2026
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.
What a NatHERS energy rating actually measuresExisting-home ratings rolled out in stages from July 2025, with Stage 2 and the new Home Energy Rating brand launching 1 July 2026. What the star rating covers, what it leaves out, and how it differs from the compliance rating used for new builds.
All-electric vs gas connections in new buildsVictoria and the ACT already restrict new gas connections. The state-by-state data on electricity and gas customer numbers, and what's driving the shift for new housing.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.
2003
Minimum energy efficiency standards introduced for new housing
2010
6-star rating requirement added via the Building Code of Australia
2022
NCC 2022 sets a 7-star-equivalent minimum plus a Whole of Home energy budget
Jul 2025
NatHERS Stage 1 for existing homes begins, with first accredited assessors
1 Jul 2026
Stage 2 launches nationally, alongside the new consumer-facing "Home Energy Rating" brand
Source · CSIRO; NatHERS; DCCEEW; Business Queensland; energy.gov.au. Jurisdictions adopt NCC updates on their own timelines. Queensland's residential NCC 2022 provisions, for example, commenced 1 May 2024.
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.
Owner-occupied (pre-2004, NSW)
- Homes with no fixed cooling
11–12%
- Ceiling & wall insulation
Higher avg.
Private rental (pre-2004, NSW)
- Homes with no fixed cooling
24%
- Ceiling & wall insulation
Lower avg.
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, which package shell, appliance and solar measures together rather than treating them as separate purchases.
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.
| Insulation type | Typical saving | Notes |
|---|---|---|
| Ceiling / roof | Up to 45%+ on heating/cooling costs | Usually the easiest retrofit of the three |
| Walls | About 15% on heating/cooling costs | Typically installed during a renovation, while cavities are open |
| Underfloor | Contributes to the >50% whole-home figure | Suits homes on stumps or with subfloor access |
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 window frames
- Fitted curtains and pelmets
- External shading
- Secondary glazing
- Double-glazed window units
- Replacement of poorly performing frames or glass
These measures address different forms of heat transfer and are not equivalent to full double glazing. Their effectiveness depends on the window orientation, frame condition, glass type, local climate and the quality of installation.
| Fabric upgrade | Indicative reduction | Metric measured | Source |
|---|---|---|---|
| Ceiling insulation | Up to 45%+ | Heating & cooling cost reduction | ICANZ |
| Double glazing | Up to 30% | Heat-loss reduction vs single glazing | energy.gov.au |
| Draught-proofing | Up to 25% | Reduction on heating bills | energy.gov.au |
| Wall insulation | About 15% | Heating & cooling cost reduction | ICANZ |
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.
The three main swaps for an older home are:
- Gas or electric-resistive hot water to a heat pump
- Gas heating to reverse-cycle air conditioning
- Gas cooktop to induction
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; heating and cooktop upgrade costs vary more by equipment chosen and are not consistently priced nationally.
| Replacing | With | Indicative cost | Notes |
|---|---|---|---|
| Gas or electric-resistive hot water | Heat pump hot water | $2,000–$6,000 | NSW Government estimate for household installs |
| Gas ducted or wall heating | Reverse-cycle air conditioning | Varies by system size | NSW incentives can provide up to $550 for a new 6 kW system or up to $560 when replacing an old unit with a 6 kW split system |
| Gas cooktop | Induction cooktop | Varies by model | No national cost average located |
Source · energy.gov.au, Hot water systems and Heating and cooling; NSW Climate and Energy Action.
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. A separate federal programme provides a discount of around 30% on eligible home batteries. These are two national programmes supporting household energy upgrades.
State and territory programmes fill in the rest, and support varies widely. NSW's relaunched scheme 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.
| Jurisdiction | Programme | Support | Status, July 2026 |
|---|---|---|---|
| National | Household Energy Upgrades Fund | $1bn CEFC finance (part of $1.3bn package), 110,000+ households intended | Open |
| National | Cheaper Home Batteries Program | About 30% discount on eligible batteries | Open since 1 Jul 2025 |
| NSW | Home Energy Saver | 0% loan up to $15,000; discount up to $4,000 | Loan open; discount applications not yet open |
| Victoria | Solar Homes / Victorian Energy Upgrades | Rebates on solar, hot water, reverse-cycle, insulation | Existing programmes open; ceiling-insulation discounts of up to $1,482 begin on 1 October 2026 |
| ACT | Home Energy Support | Rebate of up to $5,000, plus an interest-free loan of up to $10,000 for eligible households. Sustainable Household Scheme: separate low-interest loan of $2,000–$20,000 | Open |
| Western Australia | Residential Battery Scheme | Up to $1,300 for Synergy customers or $3,800 for Horizon Power customers; no-interest loan up to $10,000 | Open |
| Tasmania | Energy Saver Loan Scheme | 0% loan, $500–$10,000 | Closed to new applications 1 Sep 2025 |
| South Australia | Retailer Energy Productivity Scheme (REPS) | Discounts, free products or vouchers, depending on retailer | Open |
| Queensland | Supercharged Solar for Renters | Up to $3,500 for landlords to install rental solar | Open since 12 December 2025 |
| Northern Territory | Solar for Multi Dwellings Grant Scheme | Up to $7,500/dwelling, up to 50% of cost | Open, according to the current NT Government programme listing |
Source · DCCEEW and energy.gov.au; NSW Climate and Energy Action; Victorian Government; ACT Climate Choices; Western Australian Government; ReCFIT Tasmania; South Australian Department for Energy and Mining; Queensland Government; Northern Territory Government. NSW programme figures reflect the 17 June 2026 relaunch announcement, which increased Home Energy Saver to $557 million, including $480 million for zero-interest loans and $77 million for targeted discounts. An older NSW Consumer Energy Strategy page still cites the previous $238.9 million programme. 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, depending on the jurisdiction and scope of the work.
- The ACT's mandatory rental ceiling-insulation standard commenced on 1 April 2023. Most affected properties must comply by 30 November 2026 unless an exemption applies, although individual compliance dates can depend on when a lease begins or is renewed.
- Victoria already requires an energy-efficient fixed heater in the main living area of applicable rental properties. Broader minimum energy efficiency standards will be phased in from 1 March 2027.
| Requirement | New homes (NCC 2022) | Existing homes |
|---|---|---|
| Minimum thermal performance | 7-star equivalent, subject to jurisdictional adoption and variations | No general whole-home minimum rating |
| Whole of Home energy budget | Generally 60 out of 100 for houses and 50 out of 100 for apartments, subject to jurisdictional variations | No NCC Whole of Home requirement |
| NatHERS rating | One pathway for demonstrating NCC compliance; other compliance pathways may also apply | Home Energy Ratings are informational and cannot be used to demonstrate NCC compliance |
| Rental minimum standards | Separate from NCC building approval requirements | ACT ceiling-insulation requirements; Victoria's current heating requirement and broader standards being phased in from 2027 to 2030 |
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. Where NatHERS is used to assess a new home or major renovation for compliance, a separate NatHERS compliance certificate is required.
Existing-home energy ratings cannot be used to demonstrate compliance with the National Construction Code. Where NatHERS is used to assess a new home or major renovation for compliance, a separate NatHERS compliance certificate is required.
Section 08
Frequently asked questions
How energy efficient are Australia's older homes on average?
About 70% of Australia's roughly 11 million existing homes were built before minimum energy efficiency standards were introduced, with an estimated average rating below 3 stars. RACE for 2030, drawing on CSIRO's Building Stock Model, estimates that more than 80% of Australian homes are rated 2 stars or lower on a performance basis, well below the 7-star-equivalent minimum for new homes in adopting jurisdictions.
Which retrofits deliver the largest energy savings?
Insulating the roof, walls and floor together can save more than 50% on heating and cooling costs, and ceiling insulation alone can cut heating and cooling costs by up to 45% or more. Double glazing can reduce heat loss through windows by up to 30% compared with single glazing, and draught-proofing can cut heating bills by up to 25%. These figures are drawn from separate methodologies and cannot simply be added together.
How much does home electrification cost?
A heat pump hot water system typically costs $2,000 to $6,000 installed, according to NSW Government guidance. Reverse-cycle air conditioning and induction cooktop costs vary widely by equipment and installation, and no consistent national average is published. Rebates, zero-interest loans and discounts from federal, state and territory programmes offset part of the upfront cost for eligible households.
Do older Australian homes have to meet the 7-star standard?
No. In jurisdictions that have adopted the NCC 2022 residential energy efficiency provisions, only new homes and certain major renovations must meet the applicable 7-star-equivalent standard and Whole of Home energy budget. Existing homes generally have no minimum whole-home rating. Rental-specific standards apply in the ACT and Victoria, and further Victorian rental standards begin phasing in from 1 March 2027.
References
- Energy rating scheme to reduce bills and improve household resilience · minister.dcceew.gov.au
- DCCEEW – Residential buildings, updated February 2026 · dcceew.gov.au
- Better Homes, Brighter Futures · energy.nsw.gov.au
- Living in a glorified tent: new research shows huge energy gaps between older and newer homes · theconversation.com
- Insulation and draught proofing — household guidance · energy.gov.au
- Windows — household guidance · energy.gov.au
- Heating and cooling — household guidance · energy.gov.au
- Hot water systems — household guidance · energy.gov.au
- The Value of Insulating Existing Homes · icanz.org.au
- Home window glazing · sustainability.vic.gov.au
- Energy efficiency for rental properties in Victoria · energy.vic.gov.au
- Victorian Energy Upgrades — insulation discounts · energy.vic.gov.au
- Minimum housing standard for ceiling insulation in rental properties · act.gov.au
- Energy Saver Loan Scheme · recfit.tas.gov.au
- NatHERS — Existing Homes · nathers.gov.au
- Home Energy Rating launched today · energy.gov.au
- Home Energy Saver · energy.nsw.gov.au
- Consumer Energy Strategy · energy.nsw.gov.au
- Energy savings for NSW households: loans and discounts to help families lower their power bills · nsw.gov.au
- Energy Upgrades for Australian Homes · racefor2030.com.au
- Reverse-cycle air conditioners · energy.nsw.gov.au
- What's new about NCC 2022 · ncc.abcb.gov.au
- Whole of Home assessment and score · business.qld.gov.au
- The Value of Ceiling Insulation: impacts of retrofitting ceiling insulation to residential dwellings in Australia · icanz.org.au
