NCC Energy Efficiency Requirements

The National Construction Code (NCC) 2022 has recently been updated and implemented from 1 May 2024, with several changes included that will improve residential energy efficiency standards in new homes. These changes will focus on the energy efficiency of the building’s shell, as well as accounting for the energy usage of household appliances. Features like house orientation and better insulation will be implemented to benefit homeowners in the long run.

These changes have been implemented for the benefit of homeowners in a bid to make them more energy-independent, but they’ll also affect builders and developers for a number of reasons. Explore everything you need to know about the NCC’s new energy efficiency requirements and how they’ll affect you below.

Firstly, what is the NCC?

The National Construction Code (NCC) is Australia’s primary set of technical design and construction provisions for buildings. The codes are performance-based and set the minimum required level for the safety, amenity, health, accessibility, and sustainability of certain buildings. They give clear guidelines and rules for developers to abide by when creating projects.

What are the new energy efficiency standards?

From 1 May 2024, new houses and units now require:

• A 7-star energy equivalence rating out of 10 for the building shell (including roof, walls, windows, and floors). Learn more about 7 star energy efficiency rating homes.
• Whole of Home energy budget which promotes energy-efficient appliances and equipment (including air conditioning units, hot water heaters, lighting, and more) and on-site renewable energy (eg. solar photovoltaic (PV) system

What are the key requirements for residential buildings?

To understand the key requirements for residential buildings, we must first break down what the new energy efficiency standards relate to. Here’s what these mean and what key requirements project owners need to abide by:

What does a 7-star standard mean?

The 7-star standard applies to:

• Class 1 new builds (homes and townhouses)
• Class 10a buildings (enclosed garages) attached to Class 1 buildings
• Class 2 units (new units in multi-unit residential building)

Units within multi-unit residential buildings must achieve a 7-star rating altogether for the entire building, with none of the individual units earning less than 6 stars.

Designers and architects can use a number of styles and energy-efficient features to comply with the 7-star standard, so all hope is not lost here – your work as a project owner might not be as affected as you initially thought. 7-star homes can frequently look exactly the same as older homes from the outside, but with a higher energy performance inside.

Here are some energy-efficient features that can be included in your building with little or no extra cost, while increasing its overall star rating:

• Northern orientation living areas for maximum solar access and natural ventilation
• Treated glazing, like Low-E glass
• Insulation in the roof space and external walls
• A lighter-coloured roof
• A well-designed outdoor living area, for example with a deck or veranda

These changes make the home more energy efficient with just a few minor changes to your design and project proposal. Your building certifier will also be able to help you make subtle changes to reach this score.

Whole of Home assessment and rating

New builds will also need to adhere to the new introduction of the Whole of Home rating. This measures the energy use in the home, considering equipment and appliances that will be used for heating, cooling, and more. Energy generated by solar panels will also be taken into account.

The point of the Whole of Home assessment is to lower energy costs and help homeowners make cost effective choices surrounding appliances and equipment. However, project owners will also need to consider these choices to make sure the appliances they’re fitting before sale are energy efficient.

The Whole of Home energy assessment looks at:

• Lighting
• Heating and cooling systems
• Hot water
• Swimming pools and spa pumps
• Cooking and plug-in appliances

The Whole of Home ratings:

The overall score is between 0 and 100, being broken down into this:

• Less than 40: Poor energy efficiency
• Perfect 100: A net zero energy value home

Getting a score of over 100 is possible when the home is producing more energy than it uses, which is where the use of solar panels and on-site energy generation comes into play. A score of more than 100 will mean the building has no or low energy bills.

What score does the new NCC standard require?

The new NCC changes mean that new homes and townhouses will need to achieve a Whole of Home rating of more than 60, while new units need a rating of more than 50.

How do these changes impact building costs?

For new homes in Australia, these new residential energy efficiency standards can save an average of $185 per year in energy costs – but what about for builders and project managers? While the NCC has given us some excellent ways to improve house ratings and Whole of Home assessment scores, the new energy standards are bound to increase building costs to an extent.

Energy-efficient appliances, lighting, and equipment will probably be more expensive, increasing the cost of materials. Labour costs will also probably be higher as professionals now have to be trained in extra standards, which will boost the price of their task completion. While these prices might level out in the future as the industry gets used to them and they become the new norm, the short term will more than likely see a spike in building costs to accomodate them.

Performance pathways for compliance

To comply with the NCC, a building must satisfy all relevant Governing Requirements and the relevant Performance Requirements. These include the new changes outlined earlier this year, but don’t worry – the NCC gives a set amount of leniency for developers who are still adjusting to these changes. To do this, there are three performance pathways for compliance that you can follow:

• A performance solution
• A Deemed-to-Satisfy solution
• A combination of performance solution and Deemed-to-Satisfy solution

Performance solution

A performance solution must demonstrate compliance with all relevant performance requirements or that it’s at least equivalent to the NCC Deemed-to-Satisfy provisions. This will also need to be verified by one or multiple assessment methods, such as:

• Evidence of suitability
• Verification method
• Expert judgement
• Comparison with the Deemed-to-Satisfy provisions

Deemed-to-Satisfy solution

A Deemed-to-Satisfy solution must also comply with the relevant performance requirements and be verified by one or multiple assessment methods, including:

• Evidence of suitability
• Expert judgement

Deemed-to-Satisft provisions are prescriptive and each clause fives guidance on ‘how’, ‘what’, and in ‘which’ location it must be completed. It can also make reference to an acceptable construction manual, like the Australian Standard, which often includes materials, components, design, and construction methods that can be used to meet the performance requirements.

Combination of both performance solutions and Deemed-to-Satisfy solutions

You can use both performance solutions and Deemed-to-Satisfy solutions to achieve compliance with the performance requirements when designing a new build. When using a combination of these solutions, the relevant performance requirement needs to be identified by reviewing the:

• DTS provisions of each section or part, and performance requirements of these sections, and
• Performance requirements from other sections or parts relevant to or affected by the proposed solution

You’ll need to use the appropriate assessment methods here, too, which can include evidence of suitability, verification method, expert judgement, or comparison with the Deemed-to-Satisfy provisions.

To learn more about these performance pathways, continue reading here.

Useful tools & resources for compliance

There are two main compliance options available to house energy assessors that can assess residential energy efficiency compliance. These include:

NatHERS software

NatHERS-accredited software can provide you with a Whole of Home rating for apartment units where hot water and space conditioning are decentralised. However, it doesn’t currently offer a Whole of Home option for centralised apartments, so it won’t be suitable for everyone. Having said that, the NatHERS Administrator expects the software tools to accommodate Class 2 buildings with centralised services will be ready in 2025.

NatHERS-accredited software, which has been accepted to use in Whole of Home assessments and the issuance of WoH certificates, includes:

• BERS Pro
• AccuRate Home
• Home Energy Rating Optimisation (HERO)
• FirstRate5

Deemed-to-Satisfy Elemental Provisions

Deemed-to-Satisfy elemental provisions offer a perspective approach to complying with the Whole of Home performance requirements. To learn more about the compliance options prescribed by the Australian Building Codes Board NCC 2022, keep reading:

• Here for houses: DTS Provisions of Volume Two, H6D2(1)(b) and H6D2(2)(b)
• Here for apartments: DTS Provisions of Volume One, J2D2(2)(b) and J2D2(3)(a)(i), (b) and (c).

Common challenges in meeting new energy requirements

Building developments to a new standard can be tricky for a number of reasons, including:

• Being stuck in your ways: If you’ve been in the business for a while, you probably have a certain way you like to do things – and a new standard that challenges this can be difficult to remember and implement with reminders.
• Budgeting issues: Similarly, you might have a set budget for a project that now needs to accommodate these new changes. Some developers might wonder where this extra money is going to come from, especially if they have already allocated portions of their budgets elsewhere.
• Contractor disputes: These changes might affect pre-arranged relationships with contractors if a plan has already been put in place that now needs to change. Prices may also be affected, which can impact fixed-rate contracts.
• Finding trusted suppliers: Suppliers will need to use their stock up and might try and sell you equipment and appliances that no longer adhere to these new changes, so it can be challenging to find a new supplier that you trust.

Our tips for ensuring your new build is compliant

Luckily, there are a few things you can do to make sure your new build is compliant with the new NCC 2024 changes:

• Work with your building certifier: A building certifier will look over your development plans before, during, and after the build to make sure it’s compliant, so working with them makes it much more likely for your new build correctly against the new standards. A collaboration with your certifier should also get your plans approved quicker, so it’s a win-win.
• Vet your contractors and their teams: Contractors and their teams might need to be trained in specific areas to make sure their work is compliant with the new changes, so it’s up to you to make sure they’ll hold their work against the standard instead of working against it.
• Utilise the free and low-cost changes: There are several ways you can add energy-efficient features without spending much money, including designing living areas in the northern orientation with good room configuration for solar access and natural ventilation. Learn more ideas and examples here.
• Give yourself a grace period: Changes can be difficult to adapt to, so make sure you give yourself enough time to come to terms with them and design your building projects exactly to your current standards. Projected timelines might be slightly longer, but this should also keep stress levels to a minimum!

Explore other NCC requirements and regulations

• NCC changes 2024
• NCC waterproofing requirements
• NCC floor waste requirements class 1
• NCC handrail requirements
• NCC disability access requirements

Get free advice from an experienced building broker on your new build

Buildi brokers are experienced in all things new build and development, including the new NCC energy efficiency requirement changes. If you’re still unsure of them and how they impact your business, why not get in touch with us at 1300 947 132 or through our Contact Form to get free advice today?