What is the Energy Performance Certificate?

Fast read

The German Energy Performance Certificate, called the "Energieausweis," introduced in 2008 and mandatory by 2009, provides details about a building's energy efficiency.

Scored from A (most efficient) to G (least efficient), it offers homeowners and potential buyers insights into a property's energy consumption, heating, cooling, and insulation. It aids in comparing energy efficiencies of different properties and anticipating energy expenses.

However, there are concerns as older buildings may face high renovation costs to meet energy standards, potentially reducing their market value. While the Certificate indicates energy efficiency, it doesn't guarantee significant energy savings. Though not a complete solution, it promotes awareness of home energy consumption. So is Australia ready for our own Energy Performance Certificate?

Energy Performance Certificate for the home – what is it?

We can all agree that energy efficiency is a very important aspect of reducing our greenhouse gas emissions and the effects of climate change. The Germans also understood this and devised an Energy Performance Certificate for their homes. The German Energy Performance Certificate, also known as the “Energieausweis“, is a document that provides specific details and information regarding a building’s energy efficiency.

Both homeowners and buyers can now access information about a home’s energy consumption, production, and overall efficiency. But when did this practice begin, and how effectively does it serve its intended purpose in providing clear and actionable insights for homeowners and potential buyers? Would it be a good idea for Australia and New Zealand?

family posing in front of home with an Energy Performance Certificate
In Germany, the sale of homes requires an assessment of their energy efficiency and the issuance of an Energy Performance Certificate, a similar practice here

When was the Energy Performance Certificate established?

The concept of the German Energy Performance Certificate was first established in 2008 and then made compulsory for all buildings on the market for sale or rent in January 2009. This was an early move influenced by Germany’s commitment to the Paris Climate Agreement and its national goal of reducing its carbon footprint.

This performance certificate provides tenants and buyers with information about the building’s heating and cooling systems, insulation efficiency, energy consumption and other energy-related features. The scale ranges from A to G, with A signifying the most energy-efficient building and G indicating the least energy-efficient one.

Is it useful?

The main recognisable benefit of the German Energy Performance Certificate is that it allows people to make an educated and informed decision about the building’s energy efficiency at the time of purchase. Additionally, this certification can potentially increase property values, as energy-efficient homes often command a premium in the German market, where heating and cooling a home can cost in excess of $10,000 per annum.

When energy costs to run a house were minimal, people did not care how much it would cost to run the home. For instance, my parents installed a hot water boiler-powered central heating system in their 1968-built home in Germany when heating oil costs only 5 cents per litre. Last year, the cost to heat this home in the European winter was over $12,000.

This drastic change over half a century underscores the financial implications of rising energy costs and highlights the relevance of tools like the Energy Performance Certificate.

What about Australia

Australia is going a similar path from energy costs being gas and electricity relatively affordable a decade ago to these heating and cooling costs now starting to bite. So, getting an idea of how energy-efficient a home would be at the time of purchase could be an important consideration.

We have already introduced an Energy Star rating system for appliances, so having the whole property assessed would only be an extension of the existing system towards the whole home.

For example, a tenant or buyer can use the Energy Performance Certificate of different homes to compare the energy efficiency of the various properties and see what kind of expenses they should expect to pay for different energy aspects of the building.

Moreover, the push towards more sustainable living in Australia underscores the potential appeal of such an initiative. it is important that a local Energy Performance Certificate does not add substantially to the cost of running and selling a home.

Allowing home buyers to make an informed decision

The Energy Performance Certificate would allow potential home buyers to identify what aspects of a building need improvement in energy efficiency.

Someone may inspect a property with a B rating, and the Energy Performance Certificate highlights the lack of insulation. When a person inspects the property, they can proactively weigh up how to address and resolve this issue even before finalising the purchaseThis ensures better living comfort and can lead to long-term savings regarding energy costs.

Now, authorities might commonly issue an Energy Performance Certificate for a building, allowing renters, for instance, to gauge the expected expenses of making their planned rental home comfortable. This transparency could encourage landlords to upgrade the energy efficiency of a  building so that tenants do not face alarming energy bills and in the case of a well-insulated top-rated home, leading to longer and happier tenancies.

the german Energy Performance Certificate

Are there any disadvantages to the Energy Performance Certificate?

While the Energy Performance Certificate is generally viewed as a positive measure in the battle against climate change, it is not without its identified disadvantages.

  1. The first disadvantage is that the cost of obtaining an Energy Performance Certificate can disadvantage an older building when sold. This is because older buildings may require more extreme renovations to meet today’s energy standards. However, this also presents an opportunity for homeowners to invest in sustainable upgrades that pay for themself over time, via lower running costs and ultimately enhance the property’s value.
  2. This means those who want to sell or rent their older-style home might have to invest in energy efficiency measures as part of the sales program, or if they leave it as is, they will not receive as much from the sale as the new owner will have to account for the cost of improving the building.
  3. Some people believe that the Energy Performance Certificate has limited usefulness. This is because although it provides information surrounding the energy efficiency of the building, a building, even with a medium star rating, might not deliver significant energy savings. It just means the building consumes less energy than an older-style building. So, it could lull a medium star rating buyer into a false sense of “energy security”.
  4. It exposes poorly insulated buildings and buildings with poor heating, cooling and old heating & cooling systems, potentially disadvantaging poor homeowners who could not afford to make their home energy efficient in the sales process. Then again, at least it does not expose new buyers to a potentially expensive to-heat/cool icebox or hot house.
  5. The assessment process has to be well understood and calibrated via a skilled assessment workforce as if one does not account for all variables, it could lead to discrepancies in ratings.

The advantages could win out

Overall, the Energy Performance Certificate is a very important aspect for building owners trying to sell or rent their property. It provides information on the energy efficiency of the building by creating a scale from A to G. This standardised measurement can serve as a valuable tool for Australians as they travel through the complexities of the real estate market. It can, also, hopefully reduce greenhouse emissions and lower overall energy consumption, making homes cheaper to run.

However, there is some debate as to how much the Energy Performance Certificate has caused improvements in Germany’s energy preservation, but it has undoubtedly changed people’s attitude towards their home’s energy consumption.

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