13 July 2026 | See disclaimer
Does your new home fit the standard 7-star energy rating requirements? If you’re building a home, buying a new house or undertaking major renovations, you may have overlooked this crucial part of the process. In October 2023, the Nationwide House Energy Rating Scheme (NatHERS) increased the minimum energy standard, with every new home in the country required to have a 7-star energy rating, [1] which changes more than just your energy bill.
This article will cover what the 7-star energy rating means for your new build or renovation, and how it may affect your insurance. The new standard won’t just provide you with a quality build and potentially lower power bill costs, but it may also reduce your home’s vulnerability to destructive weather events.
How to Achieve a 7-Star Energy Rating
Local Climate
Designing your home for the climate zone you live in may ensure your home stays at a comfortable temperature all year round and uses less energy for heating and cooling.
Passive Heating
Passive heating, or passive solar heating, is when heat is trapped from the sun inside a home and stored, distributed and retained using thermal mass, heat flow and insulation. The best way to use passive heating is to build living areas on the north side of your home. You can also add north-facing windows so that sunshine reaches thermal mass materials, which absorb, store and release heat energy.
Other ideas include adding heaters near thermal mass areas and building airlock rooms, sealing around doors, windows and roof space to keep cold air out.
Passive Cooling
Passive cooling aims to reduce heat gain and increase heat loss.
The most important decision to make when it comes to passive cooling is whether you will add any air conditioning units, ceiling fans or both and how this will impact your home design.
Increased insulation, shading both inside and in outdoor living areas, and window placement can also contribute to passive cooling overall.
Orientation
The orientation of a building refers to how it is positioned about the sun’s path and the wind across different seasons.
The path of the sun in Australia is to the north. And this is why north-facing rooms get the most sunlight for the longest period of the day in winter and are easily shaded by the eaves of the roof in summer.
However, the best orientation for your home is the one that is best suited to your climate.
Thermal Mass Materials
Thermal mass refers to how a material absorbs, stores and releases heat. The rate at which a material releases heat is called thermal lag.
Building materials with high thermal mass and long lag times, including concrete, brick and stone, can be used in your floor and in your walls.
In mixed climates, thermal mass can passively heat and cool your home when heating is needed in the winter and cooling in summer.
Insulation
Adding insulation may help slow down or stop the flow of heat in your home.
The climate of your home and its construction type will determine the type of insulation that is best suited for your home.
Insulation products include:
- Bulk insulation - Air pockets within a thick material to slow the flow of heat.
- Reflective insulation - Reflects radiant heat.
- Composite insulation - Combines bulk insulation with a reflective material.
We recommend hiring a licensed professional to install your insulation to ensure they are meeting all required standards. Complying with the applicable standards may prevent the risk of fire hazards by meeting minimum clearances around fittings such as electrical cables and downlights.
Glazing
Appropriate glazing (in a northern orientation) can help keep solar warmth inside the building.
While single, double and triple-glazed windows will allow your home to gain solar heat, double and triple glazing may also help with stopping your home from losing heat.
In existing buildings, you can also use coverings such as curtains or blinds to improve the thermal performance of your windows.
Shading
Shading is suitable in warmer tropical climates, helping to block unwanted sun in the summer and still giving solar access in winter.
Shading can be either:
- Fixed - Eaves, fences and evergreen trees
- Adjustable - External louvres, pergolas with adjustable shade cloths, blinds and trees.
Skylights and Roof Windows
Skylights and roof windows are predominantly used to let natural light into your home. And depending on the roof space, you’ll want to ensure the placement allows light to enter your home without excessive heat.
Ventilation and Airtightness
Ventilation can either be natural (windows) or mechanical (ceiling fans) and is part of maintaining good air circulation and air quality in your home.
Airtightness reduces the amount of cold air entering your home in winter and hot air in summer. Loss of air is usually caused by poorly sealed glazing or an outside wall.
Condensation
The climate in which you live will ultimately determine your home’s risk of condensation.
However, to reduce the risk of condensation (in a well-ventilated home), you’ll need to choose an insulation material, such as reflective insulation, to avoid damp, mould and rot.
It’s also recommended that you reduce thermal bridging (reduce direct paths for cold to reach inside surfaces) in your home. Using insulation in building frames and glazing units may help to minimise heat transfer between building elements and reduce thermal bridging.
7-Star Energy Rating and Your Home Insurance
Here’s something you might be easily overlooking. Adhering to the NatHERS 7-star energy efficiency rating and adding improved features to your property may increase the overall cost to rebuild your home. But where does that leave your sum insured amount?
7-star energy features aren’t just a smart way to reduce your energy bills, but may also reduce your insurance risk, too. With designs such as airtight construction and fire resistance from thermal mass materials in builds, these can help to reduce your home’s vulnerability to weather events. [2]
If you’ve decided to add such features to your house, it’s important to keep in mind that your sum insured amount needs to reflect these new costs, as a gap may leave you underinsured.
For example, if you add $40,000 worth of solar panels, double-glazing and insulation upgrades to your home, does your sum insured amount reflect these costs accurately?
Whether you add high-performance insulation or battery storage, to make sure you’re covered, we suggest carefully reviewing your sum insured amount on your insurance policy.
To help you decide the sum insured amount on your policy, it may be worth using the Home and Contents Replacement Cost Calculators to assess your property and belongings. With ready-to-use calculators, you can determine what you think your home and contents are worth and easily update your sum insured amount.
Save 30%^ on your first year’s premium when you get a Home and Contents Insurance quote online.
Benefits of Having a 7-Star Energy Rating
Lower Energy Bills
Due to increased wind and battery generation, states such as New South Wales, Victoria, South East Queensland and South Australia will receive a power bill cut, potentially saving up to $155 over the 2026/27 financial year. [3] However, if you’re looking to capitalise on this and save more with lower energy bills, implementing 7-star energy rating features in your home may help you save on future power costs.
| State | Average power bill (quarterly) |
|---|---|
| New South Wales | $450 [4] |
| Victoria | $385 [4] |
| Queensland | $499 [4] |
| South Australia | $400 [4] |
| Western Australia | $272 [4] |
With recent drops in some states’ power bills, these figures may fluctuate.
Comfortable Living
Maintaining a consistent temperature, reducing drafts and improving indoor air quality are all major factors when it comes to living comfortably.
Building for your climate zone using passive heating and cooling techniques, such as using thermal mass materials and insulation, can help maintain a consistent temperature throughout your home.
Using appropriate shading or glazing can help to reduce drafts, while having proper ventilation and airtightness (where needed) may contribute to the quality of air in your home.
Resale Value
A 7-star energy rating can improve a property’s resale value and appeal to buyers who are looking to reap the benefits that come with energy-efficient homes. This may lead to lower energy bills that fit into a home energy budget, improved comfort and a commitment to sustainable living.
Keep in mind that the resale value of your home may vary greatly depending on whether it’s a house or a unit and its location.
Moving forward, updates to NatHERS have provided a clearer framework for banks to offer green home loans and upgrade loans that are in favour of energy efficiency.
FAQs
When did 7-star become mandatory?
Does the 7-star rating apply to renovations?
NatHERS 7-star rating applies to new homes and major renovations to existing homes.
Will it cost more to build a home with a 7-star rating?
The cost to build a home with a 7-star rating will vary substantially depending on your jurisdiction, climate zone and other variable factors.
