Govt Proposes Cost-Effective Updates to Building Energy Standards

Changes Aim to Lower Construction Costs Without Compromising Energy Efficiency.

The government is proposing practical adjustments to New Zealand’s building energy efficiency standards to reduce upfront construction costs while maintaining high energy performance. Building and Construction Minister Chris Penk announced the changes, citing the pressing need for affordable, energy-efficient housing amidst soaring building costs.

“Since 2019, building costs have surged by over 40%, locking many Kiwis out of affordable housing,” said Mr. Penk. “We know secure, insulated homes are critical to social wellbeing, which is why we’re acting to ensure energy efficiency standards are both robust and cost-effective.”

Key Proposals to Improve Flexibility and Reduce Costs

Following a review by the Ministry of Business, Innovation, and Employment (MBIE), several adjustments have been proposed to address concerns about the cost impact of the H1 energy efficiency standards introduced in 2021:

Removing the Prescriptive “Schedule Method”

The schedule method, which mandates specific insulation requirements, is being replaced by more flexible “calculation” and “modelling” methods.

These alternative approaches allow designers to optimize insulation levels across a building’s components—such as walls, ceilings, and floors—resulting in potential savings of up to $15,000 per build.

Adjusting Minimum R-Values for Insulation

Minimum insulation requirements for roofs, walls, and floors will be revised, giving builders more options to balance insulation needs. For instance, thicker wall insulation can offset reduced underfloor insulation, providing flexibility without sacrificing overall energy performance.

Updating Regional Climate Data

MBIE will incorporate updated climate data to better reflect regional conditions. This will refine insulation requirements and address issues like overheated homes in warmer regions.

Balancing Costs and Benefits

The proposed changes reflect a more holistic understanding of how energy efficiency standards impact construction costs and housing accessibility. “We now have a clearer picture of the real-world implications of these standards,” said Mr. Penk. “These adjustments will strike a better balance between cost and energy performance, making homes both affordable and energy-efficient.”

The minister emphasized that the reforms are not about lowering standards but providing flexibility for builders and designers to achieve compliance in a cost-effective manner.

Call for Industry Feedback

Mr. Penk encouraged builders, designers, and other industry stakeholders to participate in the consultation process. “Your feedback is crucial to shaping standards that work for everyone,” he said.

Addressing Housing Affordability and Sustainability

The proposed changes align with the government’s broader goals to address housing affordability and climate resilience. Improved energy efficiency standards can lower long-term energy costs for homeowners while reducing greenhouse gas emissions from inefficient buildings.

Additionally, the government is exploring complementary initiatives, such as incentives for sustainable building practices and support for retrofitting older homes to meet modern energy standards.

“We want Kiwis to benefit from energy-efficient, affordable homes,” Mr. Penk concluded. “These commonsense updates are a step in the right direction to achieving that goal while fostering innovation in the building industry.”

The consultation period for the proposed changes will remain open through early 2025, with the government aiming to finalize the adjustments later in the year.