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Energy Efficiency
Home energy ratings explained: what they mean for your home
Learn how home energy ratings work, what NatHERS star ratings mean, and how to improve your home's energy efficiency, comfort and running costs in Victoria.
Whether you're buying, building, renovating or simply trying to reduce your power bills, understanding home energy ratings can help you make smarter property decisions.
A home's energy rating measures how efficiently it uses energy to maintain a comfortable indoor temperature. The higher the rating, the less heating and cooling the home should need, which can translate to lower energy costs, greater comfort and a reduced environmental footprint.
Victoria has a seven-star minimum energy efficiency building standard for new homes, in accordance with the National Construction Code 2022. However, many existing dwellings in Victoria fall well short of that benchmark, with an average rating of just 2.2 stars, according to CSIRO data.
Here's what home energy ratings mean, how they're calculated and why they matter for Victorian homeowners.
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What is a home energy rating?
A home energy rating is an independent assessment of a property's energy efficiency. Rather than measuring electricity or gas usage directly, it estimates how much energy the home is likely to require for heating and cooling under standard conditions.
The rating considers the home's design, construction materials and thermal performance. Features such as insulation, glazing, orientation and ventilation all influence the final score.
A more energy-efficient home generally:
- stays warmer in winter and cooler in summer
- requires less artificial heating and cooling
- can be cheaper to run
- provides more consistent indoor comfort
- produces lower greenhouse gas emissions.
It's important to remember that an energy rating measures the home's performance rather than the behaviour of the people living in it. Two households in identical homes may have very different energy bills depending on their lifestyle and appliance use.
Understanding the NatHERS star rating system
Australia's most widely recognised home energy rating system is the Nationwide House Energy Rating Scheme (NatHERS). NatHERS assesses the thermal performance of new homes using accredited software. Homes receive a rating between 0 and 10 stars. The more stars, the more energy efficient the home.
0–2 stars
These homes have very poor thermal performance and require significant heating in winter and cooling in summer to remain comfortable.
3–5 stars
These homes offer moderate energy efficiency but may still experience uncomfortable temperatures during extreme weather and have relatively high heating and cooling costs.
6 stars
At a six-star NatHERS rating, homes should provide enough energy efficiency to remain comfortable in most weather conditions, with only moderate heating and cooling costs.
Until recently, six stars was the minimum energy efficiency requirement for most new homes built under Australia's National Construction Code. It is now seven stars.
7 stars
New homes built under the updated National Construction Code generally need to achieve a minimum seven-star NatHERS rating. Compared with a six-star home, a seven-star home typically requires less energy for heating and cooling, while providing greater year-round comfort.
8–10 stars
These highly efficient homes often incorporate excellent insulation, high-performance windows, thoughtful orientation, effective shading and airtight construction. Some homes may require very little mechanical heating or cooling for much of the year. However, homes with higher efficiency ratings may have a higher upfront cost.
New homes built in Victoria need to achieve a seven-star energy efficiency rating. Image: Getty
What factors affect a home's energy rating?
A home's energy rating isn't determined by one feature alone. Assessors examine how all parts of the building work together. Some of the biggest influences include the following.
Orientation
'Orientation' refers to the position of your home in relation to the path of the sun and your region's prevailing wind. Good orientation in Victoria usually means that your home's living areas face north, where they will receive maximum sun in winter but will be easily shared by the roof eaves in summer.
It's not impossible to achieve a seven-star rating if your home doesn't face north. You can achieve the new standard through a range of approaches.
Insulation
Quality ceiling, wall and underfloor insulation helps keep conditioned air inside the home and outdoor temperatures outside.
More: How to insulate a house in a cost effective way
Windows and glazing
Windows can be one of the largest sources of unwanted heat gain and heat loss. Double or triple glazing, thermally efficient frames, low emissivity (low-e) glass and well-positioned windows can significantly improve thermal performance.
Most homes will require high-performance glazing to achieve seven stars - but homes with better orientation may be able to reach seven stars with a limited amount of single glazing.
More: How do double-glazed windows work? Are they right for your home?
Shading
Eaves, external blinds, pergolas and deciduous trees help reduce summer heat entering the home while still allowing winter sunshine where appropriate.
Airtightness
Reducing draughts around doors, windows and other gaps improves comfort and reduces energy loss.
Building materials
Walls, floors and roofs with good thermal properties help moderate indoor temperatures throughout the day.
Ventilation
Well-designed natural ventilation allows homes to cool efficiently during warmer months without relying solely on air conditioning.
Do existing homes have energy ratings?
While NatHERS is primarily used for new homes and major renovations, existing homes can also undergo energy assessments.
Professional assessors can identify where a home is losing energy and recommend improvements such as:
- upgrading insulation
- sealing draughts
- replacing inefficient windows
- installing external shading
- improving ventilation
- upgrading heating and cooling systems.
These assessments can help homeowners prioritise upgrades that offer the greatest improvements in comfort and energy efficiency.
Why home energy ratings matter when buying a property
Location, layout and price are often top priorities when buying a home, but energy efficiency deserves attention too.
A well-rated home may offer:
- lower heating and cooling costs
- improved year-round comfort
- fewer temperature fluctuations between rooms
- reduced reliance on gas or electricity
- greater appeal to future buyers as energy efficiency becomes increasingly important.
If an existing home doesn't have a formal energy rating, buyers can still inspect features such as insulation, window glazing, orientation, shading and the age and condition of heating and cooling systems.
How to find out a property's home energy rating
Accredited assessors through Assessor Accrediting Organisations (AAOs) can provide new home assessments and issue a NatHERS certificate displaying the property's energy rating.
For existing homes, you can use the Home Energy Rating website's assessors register.
Homes with higher energy ratings require less heating and cooling. Image: Getty
How to improve your home's energy rating
Many Victorian homes can become significantly more energy efficient without requiring a complete renovation. Here are some options to improve your home's energy rating.
Upgrade insulation
Adding or replacing ceiling insulation is often one of the most cost-effective ways to improve thermal performance.
Seal gaps and draughts
Weather seals around doors, windows and exhaust fans help prevent conditioned air escaping.
Install efficient windows
Double glazing or secondary glazing can reduce both winter heat loss and summer heat gain.
Improve shading
External shading is generally more effective than internal curtains at blocking unwanted summer heat.
Upgrade heating and cooling
Modern reverse-cycle air conditioners are typically much more energy efficient than older heating or cooling systems.
Consider solar and batteries
While rooftop solar panels and home battery storage don't increase a NatHERS thermal rating, they can substantially reduce electricity bills and overall household energy consumption.
Double glazing can significantly help reduce home heating and cooling costs.
Home energy ratings FAQs
Generally, yes. A higher rating indicates the home should require less energy for heating and cooling while providing better thermal comfort throughout the year.
No. NatHERS measures the home's thermal performance rather than its energy generation. Solar panels can still significantly reduce electricity bills and emissions.
Under current building standards, seven stars is the minimum requirement for most new Australian homes. Homes achieving eight stars or higher are generally considered highly energy efficient.
Yes. Improvements such as better insulation, draught sealing, efficient glazing, external shading and modern heating and cooling systems can substantially improve comfort and reduce energy use, even if the home's original construction is decades old.
