Energy-efficient homes pay dividends in lower power bills - Australian Financial Review Weekend



Energy-efficient homes pay dividends in lower power bills

Simon Letch

by Michael Bleby

Eugenie and Helmuth Stockmann didn't just buy a suburban Perth block in 2010, they developed it. Together with another couple Mark and Alana Dowley, they paid $550,000 for the 830-square-metre site at 96 Rutland Avenue in the southern suburb of Lathlain. By December 2012, after spending $2 million in total, they had built two large townhouses and two apartments on the block.

The couples sold the two apartments for a combined $870,000, meaning each had spent about $565,000 for their 120 sq m home five kilometres from the CBD and just 450 metres from Victoria Park train station.

The customised energy-efficient home – which uses passive heating and cooling, a 3kW solar panel system, a concrete slab floor for thermal mass design and has no gas connection – is paying for itself. Stockmann estimates her bi-monthly power bills are between $10 and $40, in contrast to the typical figure for an equivalent home of about $250. Rainwater collection feeds the toilets and washing machines and a bore irrigates the gardens.

The families are part of a rapidly growing number of Australian households investing in sustainable housing and being paid dividends in vastly reduced energy costs..

What Richard Keech invested in his home and how it paid offWhat Richard Keech invested in his home and how it paid off

Richard Keech retrofitted his Melbourne house, a two-storey weatherboard family home in Essendon, cutting the household energy consumption by an estimated 75 per cent from its 2006 level.

Break even

He has spent $67,500 since 2007. A solar system that cost $25,000 was the single highest cost, followed by reverse-cycle split-system airconditioning ($13,000), window glazing ($12,000), ceiling, floor and wall insulation ($7000), a more efficient Quantum 340-litre heat-pump hot-water storage system that uses just 10 per cent of the energy of the system it replaced ($6000), LED lighting, draught proofing and an induction cooktop.

Keech calculates it will take 14 years to recoup what he's paid in lower power bills.

"So I'm breaking even in 2021," he says. "This analysis excludes the less-tangible benefits [such as a more comfortable house] arising from the steps taken."

Energy and cost savings for 190sqm house in MelbourneEnergy and cost savings for 190sqm house in Melbourne

If he were to start from scratch again today, Keech estimates it would cost a much lower $40,000. He has written a book, The Energy-Freedom Home, about his project. "On the other hand, the economic benefit of the solar would also be reduced because of the reduced feed-in tariff," he says.

While much attention is paid to newly built homes and smart design that makes the most of Australia's natural climate, the greatest overall scope for energy saving and emissions reduction comes from the country's existing building stock.

Cut energy consumption by 50 per cent

"Most older homes could expect to reduce energy consumption by between 50 per cent and 75 per cent," Keech says.

Eugenie Stockmann estimates her power bills are $10-$40 rather than $250 every two months.Eugenie Stockmann estimates her power bills are $10-$40 rather than $250 every two months. Stefan Gosatti

You don't need to go the full extent of Keech's house modifications to make a difference. Increasingly common steps like solar panel installation make sense, even when feed-in tariffs (the rate at which energy retailers buy back power to the grid) are a fraction of what they once were.

A well-planned solar system will give you a payback in as little as five years across the country, says Donna Luckman, chief executive of the not-for-profit Alternative Technology Association (ATA). "Householders who benefit financially the most are the ones who are in a sunny location, use their electricity systems during the day and are in areas with high grid electricity rates."

The ATA is the organisation behind Sustainable House Day on Sunday, a day on which new and existing homes across the country open up to show visitors their energy-efficient and other innovations. Both Stockmann's and Keech's homes will be open, as will a number of others, including a family home in Sydney's Seaforth with extensive solar panels and battery storage.

When it comes to solar panel payback, the ATA points out that the time required varies widely between states. Adelaide and Perth have the shortest payback period of five years as both have good levels of sunshine and expensive grid electricity (Adelaide) or cheap solar systems (Perth).

Payback differs

Warmer climates take longer, as Sydney (minimum seven years) and Brisbane (six years) show. In Darwin, where solar systems are more expensive, the shortest payback time frame is 12 years.

The opposite isn't always true, however. The payback time in cool-weather Melbourne is a minimum 10 years as a result of the "very competitive" grid electricity, the ATA says. In Hobart, it is a minimum nine years due to expensive solar systems. And in Canberra it is also nine years as a result of cheap grid electricity.

Better technology makes some innovations cheaper.

"The combination of new efficient electric heat pump heating and cooling systems and hot water systems, and electric induction cooktops, now beats gas on economics in any climate zone anywhere in Australia," says Brendan Condon, director of Australian Ecosystems, which is developing a master-planned subdivision of 220 sustainable homes in Victoria's Cape Paterson, near Phillip Island.

But for some innovations, payback is still a way off.

The current minimum $10,000 required for batteries to store solar-generated power makes them not worth it for most people, Luckman says. "It's only by around 2020 that on an individual household level it starts making economic sense," she says.

Basic efficiency

Keech is more blunt.

"Batteries serve to distract from the fundamentals," he says. "Demand reduction (basic efficiency) comes before generation (solar PV), which comes before storage (batteries)."

The definitions of sustainability are also expanding beyond the well-known ideas of energy efficiency.

For the first time this year, Sustainable House Day also features an apartment block that retrofitted a 646 sq m green roof on top of the three-storey building.

What was previously a blinding white surface that the residents of the 23 apartments only used for hanging up their washing now has lawn decks, planter boxes with vegetable gardens, pathways and native plantings - and still has washing lines.

The roof of the St Kilda East block in Melbourne absorbs rainwater and reduces stormwater runoff, and provides thermal insulation to the top-floor apartments. These innovations are harder to achieve in multi-apartment dwellings, however – this was paid for by a $200,000 state government grant.

For Perth's Stockmann, much of the payback comes from the location of the home itself, not just in cheaper power bills. It started the day they purchased the land and in the way they did it.

More open space

"By buying this land as two couples jointly, to develop jointly meant we were able to purchase land at a similar, if not cheaper, value than what people were queuing up for and sleeping out for, quite substantially further out from the Perth CBD and in a location away from public transport," she says.

Developing the site themselves saved the 15-to-20 per cent margin a developer would have otherwise taken.

The development doesn't have a driveway running to each home, opting instead for more open space even in a denser configuration. The design encourages incidental contact and a sense of community between the two families in the townhouses and the occupants of the two single-bedroom apartments. That's an intangible but equally important interpretation of what sustainable living can mean, Stockmann says.

But the cost benefits of the location are very measurable. Being close to the city, the Stockmanns cycle in to town or take the train. They don't need a second car (a must for many Perth households) and that brings savings. The Royal Automobile Club of WA estimates total operating costs of nearly $26,000 for even the smallest of cars, a Suzuki hatchback, over a five-year period.

The small complex manages its own strata corporation and pays between $500 and $600 annually in building insurance premiums. The residents pay no strata manager fees and have no expensive facilities like a swimming pool to maintain.

Stockmann, who has since developed a second site in Lathlain, with five apartments and two townhouses on 1000 sq m, says one of the greatest needs for sustainability is in homes that people can afford to buy, without being financially "crippled" by debt for the rest of their lives.

"What I'm passionate about is to look at development models that would allow people to do what I did in the first project and provide the opportunity to buy in at cost," she says. "That's how we can really start to deliver affordable housing."


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