Eco threat to house prices

WHEN Monica Oliphant started studying her electricity bills 37 years ago the threat of climate change barely cast a shadow over the environment.

WHEN Monica Oliphant started studying her electricity bills 37 years ago the threat of climate change barely cast a shadow over the environment.

Her habit became an intellectual exercise as well as an exercise in thrift. It helped Oliphant, adjunct associate professor at the University of South Australia and one of the country's top scientists on household energy efficiency and renewable energy, appreciate practical evidence in analysing electricity use in the home.

"I have kept my electricity bills from 1973 and I have plotted how my energy consumption has changed with all the things that I have tried to do to make the house more efficient," Oliphant told The Australian yesterday.

"The biggest change was definitely when my daughters left home and the energy consumption dropped. At all stages, I think, electricity and gas bills give a pretty good indication of consumption."

It sounds elementary: that the behaviour of the occupants of a house dictates the energy consumption. More people using hairdryers, toasters, heaters, lights and air-conditioners must mean more kilowatts and more greenhouse gas emissions. Fewer appliances in use must mean lower consumption. Accordingly, the most accurate measurement of the energy efficiency of the home and its household should be the bill from the electricity company with its detailed breakdown of the power you used and its financial cost.

The existing (and soon to be significantly expanded) energy efficiency test -- star ratings -- for new Australian homes, however, has nothing to do with the actual consumption of electricity and the corresponding production of greenhouse gas emissions, in spite of the policy objective to curb both.

Scientists say the star ratings are a largely meaningless theoretical calculation performed by software tools -- there are three that the Department of Climate Change and Energy Efficiency has endorsed -- which determine the likely heating and cooling that would be needed for a home. The three software tools -- the first one was developed by Australia's peak scientific body, the CSIRO -- calculate a star rating based on the proposed fabric of the home (the bricks, timber, concrete, tin, insulation and other materials planned for the walls, floors and roofs).

The star ratings do not take into account the behaviour of the occupants or the power they draw from the grid. A family of energy gluttons can consume more electricity than any other Australian home, yet feel good about it because a piece of paper shows their home has a five or six-star energy rating.

Next door, a family with the same number of occupants using a fraction of the electricity will be worse off if their house was built before the introduction of the star ratings. They will be unlikely to attain five stars despite the reduced power and slashed greenhouse emissions. Success in energy efficiency goes unrewarded.

It is a conundrum that John and Elizabeth Heij -- whose remarkably low consumption of electricity in their home at Aldinga near Adelaide should make theirs one of Australia's most energy-efficient households -- understand following a scientific study showing their pre-2005 eco-friendly house would not be permitted for construction under the present Building Code of Australia because it would not achieve the mandatory five stars.

"So far I have found no correlation between star rating and energy consumption in the home," says Oliphant, immediate past president of the worldwide International Solar Energy Society.

"The [software tools] mainly deal with heating and cooling to deliver a star rating.

"In each part of Australia there will be different contributions of heating and cooling and we have little real data to help us in our understanding of by how much -- or whether at all -- star ratings will help reduce consumption.

"By now, many homes have been star-rated and I believe it is time to collect data from all over the country from energy bills in star-rated homes to get a statistically valid database from which to determine whether there is in fact a benefit, from an energy and greenhouse gas perspective, with any of the three star-rating tools."

One of the enduring frustrations of scientists in this area is the ongoing rollout of new policies dedicated to energy efficiency before the accumulation of evidence to justify the policy in the first place. It is a significant shortcoming that was highlighted by the Productivity Commission five years ago after a public inquiry into energy efficiency.

Oliphant points to the federal government's National Strategy on Energy Efficiency last year as an example of policy that has leaped ahead of evidence. Climate Change and Energy Efficiency Minister Penny Wong has lauded the strategy for what she calls its capacity to "accelerate energy efficiency efforts across households and businesses, and to streamline roles and responsibilities across levels of government".

"There is much to be gained from the ongoing improvement in standards for new buildings, and not just in terms of reducing our carbon pollution," Wong said in a speech in June that revolved around the strategy.

"New standards drive innovation in design and construction through improved technologies, greener equipment, new materials and innovative building management systems."

According to the strategy document: "Measures under this theme will assist households and businesses to transition to a low-carbon future by providing material assistance as well as the information and skills necessary to improve the efficiency of energy use. Complemented by the Australian government's Energy Efficient Homes Package, the strategy will further help households, industry and businesses reduce energy use by ensuring that they are better positioned to make well-informed decisions regarding investments in energy efficiency."

The strategy document's section on the residential building sector calls for measures including a significant "increase in the stringency of energy efficiency provisions for all new residential buildings in the Building Code of Australia and [broader] coverage of efficiency requirements". It calls for "mandatory disclosure of residential building energy, greenhouse and water performance at the time of sale or lease [of a home], commencing with energy efficiency by May 2011".

A few pages later the same document calls for "a comprehensive on-ground study to assess the actual energy efficiency status of the existing housing stock. This study would include end-use metering to determine overall home energy use, energy use by home appliances and assessment of the thermal performance of the building shell for different housing types."

The language may be dense but the meaning is straightforward: the Department of Climate Change and Energy Efficiency is calling for the existing energy efficiency policy for all new homes (which scientists and Australia's peak building groups say is fundamentally flawed) to be applied to all existing homes when they come up for sale or lease; and at some point in the future, a comprehensive study will determine whether any of it actually works.

According to Oliphant, the study is eminently sensible. But the study, and the evidence, should come before the policy, not after it. "I believe in mandatory disclosure but the current tools for rating homes . . . may not necessarily be the right ones," she says.

Another respected scientist in this field, the University of Adelaide's associate professor Terry Williamson, puts it more bluntly: "Can we please just have some evidence-based policy? The only data in Australia in this area relates to a study of 40 houses and it shows absolutely no correlation between the energy star ratings and the actual energy use and greenhouse gas emissions. The policies and the department are just all over the place. It is a tale of mismanagement."

The complexity of this issue helps to ensure that it is a slow burn in the public arena. But since scientists including Williamson began telling The Australian about anomalies in the policies and significant flaws in the software tools that measure the energy efficiency of more than 100,000 new Australian homes a year, peak bodies including the Housing Industry Association and Master Builders have disclosed their studies showing serious problems with the accuracy of the software tools that calculate the star ratings.

John Moynihan, the director of Brisbane-based energy assessment and green building firm Ecolateral, says the star-ratings system is unaudited and easily manipulated by computer modellers.

"People can be lured into a false sense of compliance by believing that their six-star home is sustainable for all elements of the energy," Moynihan says. "The star-rating measures the heating and cooling loads of the home rather than the electricity demand. A whole of house outcome will provide us with a more balanced view and, if coupled with the computer modelling, can give a far more accurate outcome for the home owner."

Another shortcoming, according to the peak body for the energy assessors who use the software tools, is that about 1000 assessors "do not operate under any quality control program".

The findings of the assessors affect the design and construction of tens of thousands of new homes a year. While the Association of Building Sustainability Assessors does not accept that the software tools used by its members are seriously flawed, its chief executive Alison Carmichael is calling on federal and state governments to take the lead and improve governance.

"The fact that there are claims of cheating is evidence of lack of quality control over assessments and the people carrying them out, not flaws in the software," she says.

"There is no doubt that these are complex tools to use. Quality control over assessments is crucial for the integrity of the system. When the Council of Australian Governments agreed to the use of the software nationally for star ratings, it also agreed to make sure all assessors were appropriately trained and quality assured. This has not been done universally and therefore there is no quality assurance in some states and training requirements are different."

An ABSA report has also warned that if the software tools being used by assessors are proved to be as inaccurate as some have reported, people using them for regulatory compliance "may be paying many thousands of dollars more for their house than they should".

"Differences between rating software of such magnitude, if correct, have significant implications for the scheme, assessors, the building industry and software providers," the report states.

Liability could spread to the software provider and government departments, and have a significant effect on policy settings for the star ratings.

"With such enormous differences it would not be unreasonable for the building industry to argue that all ratings for regulatory purposes, except those using [a CSIRO-developed software tool used by 20 per cent of assessors] should stop until this issue is resolved. This could bankrupt hundreds of assessors."

Archicentre, the building advisory service of the Australian Institute of Architects, believes community and industry confidence in the compulsory use of software to obtain a building permit is vital.

Archicentre supports the energy rating program, but wants the CSIRO and the Department of Climate Change and Energy Efficiency to respond urgently to the concerns.

Archicentre NSW and ACT manager Angus Kell says with hefty price rises in energy, the star energy rating program has become a valuable marketing tool for builders and real estate agents, "making its accuracy extremely important for environmental, commercial and legal reasons.

"More and more homebuyers and homeowners are keen to have sustainable homes and to know exactly how their home compares with everyone else's," he says.

"However, challenges to the accuracy of the program, which is at the heart of billions of dollars of investment of Australians, would raise major concerns."

A spokeswoman for the Department of Climate Change and Energy Efficiency refused to answer a list of questions from The Australian, but said it "works closely with the states and territories and regularly consults with industry groups to continuously improve the scheme".