Tougher energy standards for new homes will be introduced in New South Wales, but small residential blocks and shopping centres won’t have to adhere to them because of developers’ concerns about added complexity and costs.
Under a new policy announced on Monday, new houses and high-rise towers will need to have a seven-star energy rating, while large office buildings must show the ability to become all-electric-powered.
Renovations valued at more than $50,000 will also be subject to the new policy, the state government said.
“We need to ensure the places we live, work and stay in are more comfortable, all while we save people money on their power bills and contribute to our net zero target,” the planning minister, Anthony Roberts, said on Monday.
The minimum energy standards for new homes will increase from 5.5 stars to seven stars, aiming to reduce emissions by an estimated 7% to 11%.
People living in high-rise units would save up to $265 a year on energy bills, while those in western Sydney houses could save $1070, the government said.
However, the new Sustainable Buildings State Environmental Planning Policy (Sepp) won’t apply to homes in the north coast climate zone and apartment buildings lower than six storeys.
Those exclusions were included as the energy bill savings under the new policy couldn’t offset higher construction costs in those areas.
Roberts denied he’d scrapped his predecessor’s tougher Sepp, but said he decided to stop proceeding with it, after talking with developers and considering the government’s housing affordability priority.
“There was broad consensus across the industry that it was going to not just provide additional confusion at a time, but also it would add potential costs to the build,” he told a parliamentary budget estimates hearing on Monday.
The Sepp will also force most large commercial developments and state-significant developments, such as hospitals, prisons and schools to be able to have all their energy needs sourced from renewables by 2035.
Some large commercial developments will also need to buy offsets for on-site fossil fuel use.
But shopping centres are exempt, over complexity concerns, the department said.
Embodied emissions – those produced in the construction of materials from mine to factory to site – will be monitored ahead of the potential introduction of standards down the track.
The Property Council of Australia said such requirements were a necessary next step.
“But we caution government to avoid a disjointed approach for commercial and residential buildings,” said its NSW deputy executive director, Lauren Conceicao.
“This will create confusion in the market and reduce the effectiveness of the provisions.”
The Nature Conservation Council of NSW welcomed higher star ratings but said standards were needed to increase the health and comfort, energy efficiency and thermal performance of existing homes.
“There were a lot of very worthwhile reforms in that draft Sepp that we’ve lost, such as tree retention and canopy cover rules for new developments, which are essential for making livable communities in a heating climate,” NCC spokesperson James Tremain said.
The Sepp will be reviewed every three years.