Hitting the target NatHERS Star rating range
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Target for NatHERS Star rating

I breathed a sigh of relief when the design for Unit 1 was officially given a NatHERS Star rating of 8.2 Stars. We’d made some modifications to trim the budget and were a little concerned about the impact on the original rating of 8.4 Stars.

While telling family and friends the good news, I quickly realised they were not as excited as I was.  Come on people!  This is a great result.  But the reaction did get me thinking.  Really, why is 8.2 Stars a good number?  It’s similar to other sustainable home designs which means we are in good company.  But, why have numbers around the 7.5 to 8.5 Star range become the target for green homes?  I needed to understand the reasons for this consensus.

What does a NatHERS Star rating mean?

Energy rating label for a house

The National House Energy Rating Scheme (NatHERS) is a modelling tool.  It predicts the amount of energy a home requires for heating and cooling to keep the interior at a comfortable temperature.  Lots of design details such as window glazing and insulation specifications are fed into the model.  The program uses the data to predict the annual energy demand.  The higher the number of Stars, the lower the energy requirement.  A 10 Star design would theoretically not require any energy for heating and cooling.  This design relies on passive design features to maintain a comfortable temperature.

As highlighted by Josh’s House, the program is a good starting point for reducing energy demand.  Heating and cooling account for about 40% of the energy flowing into the average Australian home.  That’s a big chunk right there.  However, NatHERS doesn’t take other significant users (eg hot water, cooking) into account.

All new Australian homes are required by the Building Code to achieve a minimum NatHERS Star rating of 6 Stars.  The Alternative Technology Association (ATA) say that’s quite an improvement over the existing stock of Aussie houses which have a rating somewhere south of 3 Stars.  A new house with a 6 Star rating will have a significant reduction in energy demand compared to the old house it replaced.

So, at 8.2 Stars, our design needs less heating and cooling energy than the Building Code standard.  That’s good right?  Yes, but there is more explaining to do first.

Higher NatHERS Star rating adds cost.

Let’s start with the bad news because there is no such thing as a free lunch.  Going beyond the 6 Star minimum will add cost to a build.

Sanctuary magazine helps to make sustainable design simple

A recent article in the ATA Sanctuary magazine contained the results of an investigation into the cost of upgrading from the 6 Star minimum for a variety of designs available in Melbourne.  The researchers calculated the build cost of these 6 Star homes.  Next, they kept the same designs but upgraded items like insulation and glazing to achieve a higher Star rating.  Going to 7 Star added an average of $3,000 while going to 9 Star increased the cost by $25,300.

So, why would anyone be interested in exceeding the 6 Star rating?  As quality guru Philip P. Crosby would say, quality is conformance to requirements.  A customer can say they are getting a quality house if it has a low build cost and meets the Building Code energy rating minimum.  Mission accomplished and job well done.  There are no defects here.

Quality control

Well, the story changes if the customer adds another requirement – spend less money on energy needed to maintain a comfortable lifestyle when living in the house.  Now we’re not just talking about the upfront cost of building (or buying) a house, we’re thinking about the 40+ years of energy bills that follow.  A quality home shouldn’t cost an arm and a leg to heat or cool.

The Sanctuary article contains the results of a study into the economics of going beyond the 6 Star minimum.

Lochiel Park shows the way.

Lochiel Park in Adelaide is a housing estate based on sustainable design principles.  Every home has a NatHERS Star rating of 7.5 Stars.  This rating means they need less energy to heat and cool compared to the Building Code minimum.  The designers went even further.  They added more cost to the build by including features such as solar power systems and solar hot water.

Lochiel Park SA has a minimum NatHERS Star rating of 7.5

Compared to the average house built in 2004, these homes use about one third of the energy which translates into a substantial annual saving.  I’m assuming the comparison is based on the amount of energy imported from the grid or gas supply.  For a Lochiel Park home, this would be lower due to a combination of reduced demand and electricity being provided by the solar cells, not the grid.

Despite the extra cost of 7.5 Stars and adding non-NatHERS sustainability features, the researchers calculated the owners were $25,000 better off over the life of these homes.  With the benefit of hindsight, pushing the designs to 8.5 Stars was justified by higher predicted savings in energy costs.

The bottom line is that going to a sustainable house design is a sound financial decision.  A 7.5 to 8.5 Star home fitted with a solar power system and energy efficient devices makes economic sense

The Cape endorses a higher NatHERS Star rating.

Closer to home, an analysis of the The Cape sustainable development at Cape Paterson reinforces the financial incentives to go beyond the Building Code minimum.

NatHERS Star rating of 8.2 at The Cape

One of the homes at The Cape has a NatHERS rating of 8.2 Stars and is fitted with a variety of sustainability features.  These include a 5 kW solar power system, LED lighting and a reverse cycle air conditioner.

Although the extra features added to the build cost, the owners save about $2000 per year on energy costs.  This means the house uses a quarter of the energy needed by a 6 Star home of the same size.  As a result, the owner should be $40,000 better off over the life of the home compared to investing the money spent on sustainability features in their 6 Star home mortgage. 

7.5 – 8.5 is the optimum NatHERS Star rating.

The Sanctuary article suggests that a 7.5 to 8.5 Star design is a good starting point for a new Australian home.  The cost of reaching the higher standard is justified by spending less on heating and cooling the home.

Adding a solar power system along with modern, energy efficient devices (eg hot water, cooling) further improves the economics of a 7.5 to 8.5 Star home.

But why not go higher than 8.5 Stars?  Remember what happened as the NatHERS Star rating increased.  Additional costs tripled going from 8 to 9 Stars.  Getting to a 9 or 10 Star design is definitely possible, but the financial incentive isn’t as good.  However, this could change in the future as the cost of sustainability features such as battery storage continue to fall.

Hence, our 8.2 Star design is a good fit with the sustainability feature recommendations in the Sanctuary article.  These homes are comfortable to live in but have a smaller carbon footprint than the standard 6 Star home.  A reduced energy demand offers significant annual cost savings for the residents.


  • Anne Thompson

    January 01, 01 2018 06:56:27

    Congratulations on achieving your 8.3 NaTHERS rating. Great outcome.

  • Gillian Cohen

    January 03, 01 2018 11:39:43

    Well done on your NaTHERS rating. You will no doubt qualify as superior circus jugglers (of details and compromises)!

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