House roof with solar panels installed in suburban area of South Australia Taylor Burrell Barnett

NCC 2022 energy efficiency changes – what you need to know


Lex Barnett
Practice Fellow

26 Oct 2022

Changes to Australia's residential building energy efficiency requirements are afoot; with Commonwealth, state and territory Building Ministers having met in August to agree upgraded efficiency provisions as part of the 2022 edition of the National Construction Code (NCC 2022). Principal among these changes was the decision to raise the minimum residential energy-efficiency standard from 6 to 7 stars and apply a 'whole of home' annual energy use budget.

This guide to the NCC 2022 changes outlines what's proposed, how WA is responding, and what you should be thinking about now to get prepared.

What are the NCC 2022 changes proposed?

The NCC 2022 introduces a wide range of changes, including residential energy efficiency, accessibility, condensation mitigation, lead-free plumbing requirements and basic infrastructure for electric vehicles in new apartment buildings.

Focusing on energy efficiency, the increased standards will apply to all new houses and apartments (Class 1 and Class 2 buildings, respectively) and consist of two major changes, once adopted in full:

  1. The minimum level of thermal performance of new homes is raised to the equivalent of 7 stars (previously 6 stars) under the Nationwide House Energy Rating Scheme (NatHERS); and
  2. A new whole-of-home, annual energy use budget to be met by all new homes. This budget applies to the energy use of a home’s heating and cooling equipment (AC), hot water systems, cooking appliances, lighting, swimming pool and spa pumps. Renewable energy systems, such as rooftop solar panels and batteries, aren’t mandatory but can also be factored into a home’s energy use budget.

The combined effect of these provisions will be a more holistic approach to assessing the energy efficiency of new dwellings, which was previously restricted to assessing the 'building shell' exclusive of equipment, fittings and on-site energy production. Adopting an approach such as this is an important step towards achieving Australia's commitment to achieve net zero emissions by 2050.

While, on the surface, including all of the energy consuming and producing products in a house in the energy rating assessment makes some sense, there is a good reason why this hasn’t been done before – while the building structure itself is relatively fixed, all of the energy consuming and producing components are temporary – ie they will wear out, break down or fail, or simply be replaced by something different (or maybe not replaced at all). It will mean that all appliances will need to be selected prior to Building Application, and there will also be a high reliance on more diligent post-construction inspections to ensure all appliances are compliant.

We will watch with interest how builders, developers and regulators all adapt to this new layer in the compliance process.

WA = Wait Awhile?

While the August 2022 meeting of Building Ministers' aimed to set a consistent approach to the adoption of these standards across Australia, the option remains for individual states and territories Ministers to adjust details and timing to "address local circumstances such as condensation, renewable energy capacity and local climatic conditions". Many would argue that WA's local circumstances, in terms of condensation, renewable energy capacity and climatic conditions would place it in a better position to implement increased energy efficiency standards than many other jurisdictions.

Up until recently, however, it was unclear what timelines for implementing the changes would be adopted by the WA Government. This timing was recently finally confirmed, with WA’s Minister for Commerce, Hon Roger Cook, announcing that WA would be delaying rollout of the NCC 2022 provisions and adopting a staged approach.

The Minister’s announcement set out a staged timeline of the adoption of the above energy efficiency provisions in WA as follows:

  • From 1 May 2024: Class 2 buildings (apartments) above six storeys will be required to meet an average NatHERS rating of 7 stars, with a minimum of 5 stars permitted for individual units. For apartments six storeys and below, the existing requirement for a 6 star average with a 5 star minimum will continue to apply.
  • From 1 May 2025: all apartments will be required to meet the 7 star average, with a 5 star minimum. For Class 1 buildings (houses), 7 star energy efficiency requirements and the new 'Whole of Home' provisions will apply.

Full details of WA's implementation arrangements can be found on the Department of Mines, Industry Regulation and Safety website.

While the environmentally righteous among us may lament that it will take so long to implement these changes, we have seen, in the past, the consequences of changes made too hastily and before the volume building sector has had a chance to adapt their models – such consequences also having knock-on impacts for the most financially vulnerable purchasers – first home buyers. So a more measured roll-out will hopefully assist in a more seamless transition.

For all states adopting the energy efficiency provisions, NCC 2022 will be available for voluntary use from 1 October 2022.

NCC 2022 will also introduce a new livability standard which improves accessibility design in new homes. Once again, however, WA has indicated it will not be adopting these new accessibility standards. NSW and SA have taken a similar position on accessibility.

Balancing housing prices and 'ongoing affordability'

A key consideration for many people will be "how much is this going to cost me?" Because, lets face it, while we all want to do our bit towards saving the planet, environmental improvement generally involves upfront cost (hopefully with downstream savings) and, therefore, presents added pressure on housing affordability.

The cost implication is a complex question, due to many variables, including regional fluctuations in build costs and specific microclimates, as these all play a part in the level of work required to achieve a 7-star rating.

There have been several measures put forward to contemplate cost implications and they vary widely depending on geography and building typology. According to HIA the impost on a base building typology is approximately $7,179 in Perth, in comparison to $3,741 in Melbourne and $10,146 in Sydney East. Annual energy savings for the same buildings were estimated at $310, $141, and $225 respectively.

So the costs are fairly impactful – but rather than wring our hands and shout "we can’t possibly afford this!" We need to ask ourselves how we can adapt our practice and our design approaches to better suit the new parameters.

Designing in efficiency

How can we innovate in subdivision and dwelling design to be better equipped to meet the new 7 Star standard?

Yet another simple question with a complex answer – as with cost impacts, innovations to improve energy efficiency will also vary depending on location and micro-climate, lot orientation, dwelling design and materials.

In short: 'there is more than one way to skin a building'.

From the planners perspective one of our key considerations will be in lot design and orientation, working with developers and building designers to respond to a new suite of housing products.

Consideration of the new built form style from early concept planning stage is going to be important in seeking to create cost-neutral solutions. Most passive solar architects will tell you they can design an energy efficient dwelling on any block at any orientation; though some orientations make their job far easier than others. The greater issue however is that the majority of dwellings constructed in greenfield and large infill estates are not bespoke designs tailored to the lot, but rather tend to be a house and land package featuring one of a set number of standardised dwellings designed to fit standard lot dimensions.

The issue is that, currently, whilst a wide range of dwelling typologies can be found for standard lot dimensions, the dwelling a purchaser chooses to pair with their lot of choice typically has little to do with the orientation and climatic features.

So, it is imperative that planners, land developers and volume builders all work collaboratively to reset parameters for lot orientations and dimensions to meet a different house style designed to efficiently adapt to the NCC 2022 requirements.

In terms of lot sizes and the all-important lot width, smaller may no longer be better. Extra dimension to increase solar penetration (for example) may override the temptation to ‘squeeze an extra lot’ by reducing setbacks.

Final thoughts

While the long-awaited energy efficiency provisions in NCC2022 are a welcome step to improving our overall energy efficiency performance, the delay in implementing the changes in WA are considered to be a sensible step to ensure that the many participants involved in the provision of housing in our state – the builders, designers, planners, developers and regulators, to name a few – are well prepared to ultimately meet the challenge of a more sustainable urban growth trajectory with the least disruption to housing affordability.

It is encumbent on all responsible players in the industry to make every effort towards achieving best practice outcomes measured in terms of environmental, social and economic improvement.

You can find out more information on the upcoming NCC 2022 changes using resources below, or get in touch with one of our team to discuss.


Lex Barnett
Practice Fellow