Improving Energy Efficiency in ACT Rental Properties
The Australian Capital Territory (ACT) Government is taking a major step towards improving the energy efficiency of residential rental properties by introducing a new minimum energy efficiency standard for ceiling insulation. This new regulation, commencing on 1 April 2023, will be implemented under the Residential Tenancies Act 1997 and is expected to have significant benefits for tenants, and the environment.
Effective home insulation is critical to reduce energy usage for heating and cooling, which accounts for around half of an average home’s energy use. In fact, un-insulated houses can lose up to 35% of heat through the ceiling during colder months. Properly insulated homes require much less energy for heating and cooling, thus reducing energy costs.
In addition to financial and environmental considerations, poor insulation can also have negative impacts on health, particularly for vulnerable populations such as the elderly, children, and those with chronic illnesses. Insulation helps to maintain a comfortable and healthy indoor temperature, which improves overall well-being and reduces the risk of health complications.
Installing insulation with a higher R-value, such as the recommended R5.0 standard for ceilings, minimises heat loss, making homes more comfortable while also lowering energy bills and reducing greenhouse gas emissions. A Regulatory Impact Statement undertaken in 2021 identified a minimum ceiling insulation standard as the most effective option for improving energy efficiency in rental properties in the ACT.
How the New Scheme will be Implemented in Canberra and the ACT
In November 2023, Amelior Insulation was invited to a seminar for Canberra landlords, where the new scheme was discussed. The new minimum ceiling insulation standard requires rental properties with no insulation or existing ceiling insulation below an R-value of R2.0 to upgrade their insulation to a minimum R-value of R5.0. At the time of publishing this article, it is likely that over 65% of rental properties are already compliant with the standard. Those with ceiling insulation rated at R2.0 or above will not require upgrades, although upgrades are still highly recommended. Note that wall and underfloor insulation installation are not part of this scheme.
Landlords are responsible for ensuring that their rental properties meet the minimum energy efficiency requirements. Failure to meet these requirements could result in penalties or fines.
Key Take-aways regarding the New Scheme:
· The standard will apply to both private and public rental properties;
· All insulation products must meet the relevant Australian Standards and national codes of practice for the installation of ceiling insulation products;
· Approved and certified insulation installers will be able to advise on the most suitable type of insulation product for each individual property; (the ACT Government presumably doesn’t want a repeat of the 2009 ‘pink batts scheme‘).
· An electrical safety inspection must be carried out prior to any insulation works taking place.
From 1 April 2023, rental providers will be required to specify in any rental advertisements and lease agreements whether their property meets the minimum standard. Renters and prospective renters will have the right to request and be given information by rental providers on the property’s compliance.
During the phase-in period (April 2023 – November 2026) rental providers will have nine months from when a new lease is signed to comply with the standard, unless they have an exemption. Rental properties that have an existing lease which doesn’t get renewed before 30 November 2026 must comply by the 30 November 2026. After 30 November 2026, all properties entering the rental market will have three months to comply with the standard, unless they have an exemption.
Financial assistance will be available to help rental providers manage the costs of implementing the minimum standard. The Sustainable Household Scheme will offer support to rental providers prior to the requirement to upgrade their property, with private rental providers being able to access zero interest loans of up to $15,000 if they meet the eligibility criteria under the Scheme. Not-for-profit community housing providers and rental providers registered under the Community Land Tax Exemption Scheme can also access rebates for the cost of home insulation upgrades under the Home Energy Savings Program (HESP).
A penalty of up to $800 for individuals or up to $4050 for corporations may apply for failing to comply with the minimum standard. Tenants will be able to apply to the ACT Civil & Administrative Tribunal (ACAT) for dispute resolution in cases where compliance with the insulation standard is disputed or an exemption is based on a false or misleading statement. If a rental property does not comply with the minimum standard within the designated time period, the tenant can apply for an order to end the tenancy, apply for a rent reduction for the period where the property was required to meet the minimum standard but did not. Tenants may also apply for compensation for any loss suffered due to the property not meeting the standard.
Electrical Check prior to Insulation Upgrade
Before any insulation can be installed or upgraded in Canberra, a licenced electrician must inspect the property to ensure the safety of tenants, insulation installers, and of course to protect the property. This electrical safety inspection will minimise the hazards associates with the risk of fire and electrocution.
The electrician will be required to check for unsafe wiring in the roof space, including damaged or exposed wiring, or wiring that is incorrectly rated. They will also determine whether the installation of insulation will lead to any electrical wiring or circuits being adversely affected, and whether a Residual Current Device (RCD) needs to be installed in the relevant circuit. Additionally, the electrician will check whether any light fixtures need to be replaced. If there are halogen downlights in an area where ceiling insulation is required to be installed, a licenced electrician must remove and replace them with IC-4 rated LED downlights. Halogen downlights generate a lot of heat, and when covered by insulation this creates a fire risk.
After carrying out the inspection, the electrician should provide the home owner with a safety check report, which will note any electrical risks that must be rectified before new or additional insulation can be installed. A licenced electrician must be engaged to fix any identified issues. After the work is completed, the electrician will provide the property owner with a copy of the Certificate of Electrical Safety, which is submitted to the ACT Government via the Access Canberra website.
Property owners must ensure that they keep copies of the electrical safety check report. When the recommended rectification works have been completed, copies of the Certificate of Electrical Safety and all related tax invoices for work carried out should also be retained as evidence.
Checklist for landlords and property owners in the ACT
1. Book a roof insulation inspection
If your property was built since 1997 and has insulation that has not been significantly disturbed, it may already meet the standard. Check your property’s Energy Efficiency Rating (EER), which is provided with your property contract. This would typically include the R-value of the installed insulation. However, if your home insulation in Canberra may have been disturbed or upgraded since the EER was undertaken, or you are unable to determine whether insulation is present, then you’ll need to hire a certified insulation installer to determine the level of insulation on your property. For safety reasons, it is not recommended to enter the roof space yourself. Remember: if the roof insulation inspection confirms that the existing insulation already meets the required standard, then you shouldn’t need to engage an electrician in relation to any mandatory insulation upgrade.
2. Review your roof insulation assessment report
The reports we provide are concise and easy to understand. They include
- Photos of the internal roof area;
- A description of the condition of any current insulation;
- A recommendation for any required upgrade.
If the insulation assessment report confirms that an insulation upgrade is required then:
3. Book an electrical inspection
…and once the electrical work is sorted:
4. Book your Canberra home insulation upgrade
Minimum Ceiling Insulation Standard
If you have any questions regarding your property’s compliance with the new ceiling insulation standard, home insulation in Canberra, or to organise your initial roof insulation inspection, please give us a call on 0450 858 568.