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One Million HomesA 2010 ENERGY AND WATEREFFICIENCY CAMPAIGN

July 2010

About the One Million Homes alliance: The One Million Homes alliance has come together to ensurethat improving the efficiency of our housing stock is on the agenda ahead of the 2010 State andFederal elections. The alliance comprises organisations with expertise in developing environmentaland social equity policy, experienced practitioners of energy and water efficiency, and unionscovering workers in the industry.

For more information contact Josie Lee 03 9341 8118 or email [email protected]

This report is printed on 100% post-consumer waste paper using 100% Green Energy.Printed by Arena Printing and Publishing.

One Million Homes Alliance

Table of Contents

Executive Summary 4

1. Introduction 6

2. Why we need a One Million Homes package 7

2.1 Reducing emissions and water use 7

2.2 Easing financial stress 8

2.3 Improving comfort and making 8 our homes climate safe

2.4 Growing green collar jobs 8

2.5 Why one million homes? 8

3. Why target low-income households? 9

4. Providing best value energy and 9water efficiency measures to households

5. Energy audit and advice 10

6. Financial costs and benefits of a 11 One Million Homes package

7. Environment and employment benefits 12 of the One Million Homes program

8. Governance and implementation 12

9. Delivery considerations 13for different household types

9.1 Home Owners 13

9.2 Private rental homes 13

9.3 Public and community housing 14

9.4 Apartments 14

9.5 Caravans 14

9.6 Energy Hardship

10. Complementary policies – Mandatory 15disclosure and regulatory standards for existing rental homes

10. Conclusion 16

Appendix 1: Existing State and Federal 17energy and water efficiency programs

Endnotes 19

References 19

A 2010 VICTORIAN ENERGY AND WATER EFFICIENCY CAMPAIGN 3

Executive Summary

In 2010 the Victorian Government has an opportunity to drive an historic change in theenergy and water efficiency of Victoria’s existing residential properties. Now more thanever we need strong action to ensure Victoria’s greenhouse pollution starts falling, togenerate green jobs, save water and deliver affordable energy and water bills tohouseholds struggling to cope with the rising costs of living.

This report calls on all political parties this election year to commit to climate-proof OneMillion Homes – half of Victoria’s housing stock – with a comprehensive and flexiblepackage of energy and water efficiency measures over the next five years.

The One Million Homes program will primarily target concession card holders, includinghealth care cards, pensioner concession cards and low-income health care cards. Thisensures that those on a low income who are most vulnerable to energy and water pricerises and least able to afford the upfront cost of energy and water efficiency measuresbenefit. It also ensures that elderly people and people with chronic health conditions –who are most vulnerable to extreme weather events like heatwaves – are prioritised.

Each retrofit will involve:

• A house visit and energy audit, including an assessment of the most effectiveenergy and water efficiency measures; guidance for householders on how touse energy and water more efficiently; and referral to other relevant programsand efficiency opportunities.

• A suite of retrofit measures including efficient lighting, weather sealing,insulation, solar water heating, low-flow showerheads, tap-flow controllers anddual-flush toilets, and fridge upgrades as needed to complement those alreadyin place in homes.

• Delivery by trusted organisations and businesses with the skills to work withhouseholds to ensure the safety and efficacy of the program.

A 2010 VICTORIAN ENERGY AND WATER EFFICIENCY CAMPAIGN4

Test running anew waterefficientshower rose. Photo: EV

The program will result in:

• A green makeover for one million homes with a comprehensive set of energyand water efficiency measures

• Greenhouse gas emissions reductions of roughly 2.38 million tonnes per year

• An estimated 32.5 billion litres of water savings each year

• Approximately 3000 to 6700 new direct jobs. Over 40 percent of these will besemi-skilled providing opportunities for disadvantaged job seekers

• Savings to household energy and water bills of roughly $296 per year (average)per household, and a saving of $296 million to the Victorian community atcurrent energy and water prices

• Increased householder protection against heatwaves and the coldest days inwinter

• Support for low income households and those suffering from energy hardship.

The program will cover different household types including owner-occupier, rentalproperties, and public and community housing. Targeted delivery mechanisms will beneeded to ensure that the program meets the needs of different household types.

The average cost of each comprehensive audit and retrofit is $2,570 per household.Therefore the total cost of the program is estimated at $2.57 billion over 5 years or $514million per year. While the program will require considerable new investment from theState or Commonwealth Governments, significant funds are already on the table. Forexample, current (2010/11) Federal and Victorian rebate and incentive programscontribute up to $400 million in annual funding for efficiency measures in Victorianhouseholds.

To maximise the benefits of One Million Homes it will be critical that the programcomplements existing and new programs and sets overarching policy goals. Importantlyit should be supported by regulatory standards that require rental homes to meetacceptable minimum standards at the time of lease.

In the past energy and water efficiency programs have been limited in scope orpiecemeal in their delivery. The climate crisis we face, along with dwindling watersupplies and growing household financial stress, demands that in 2010 we design andfund retrofit programs on a larger and deeper scale.

The One Million Homes alliance has formed to advocate for new retrofit programs ofsufficient scale to generate timely and lasting benefits to the environment and thecommunity. By committing to retrofitting one million Victorian homes over the nextfive years, Victoria’s next government could create a lasting legacy of more efficient,comfortable and affordable homes for all Victorians.


1. Introduction

Rising energy and water prices are hitting households hard because of our wastefulbuildings and old inefficient appliances. As Victorians try to remain warm through thewinter, their hard-earned dollars are effectively floating through the roof or windows,raising heating bills and leaving householders in the cold. Precious water is also beingunnecessarily wasted by outdated single flush toilets and high flow shower heads.

The solutions are available and Victorian householders have been doing their bit to saveenergy and water. It’s time for the Government to take responsibility and helphouseholds achieve greater savings, to ensure affordable and climate safe homes forVictoria’s future.

Strong investment by the Government in the Black Balloons and Target 155 campaignhas made Victoria a leader in linking household energy and water usage with greenhousegas emissions and the state of our reservoirs. Now the Government needs to take thenext step and enable households to lock in energy and water savings.

The One Million Homes program aims to increase the affordability of energy and waterbills, improve comfort and health, generate green jobs, save water and reduce greenhousegas emissions through a comprehensive and flexible energy and water efficiency retrofitprogram for one million Victorian homes over five years.

The One Million Homes alliance has come together to capture these benefits and ensurethat improving the efficiency of our housing stock is on the agenda ahead of the 2010Federal and State elections. The alliance comprises organisations with expertise indeveloping environmental and social equity policy, experienced practitioners of energyand water efficiency, and unions covering workers in the industry.

This report makes the case that the State Government should climate proof one millionhomes – half of Victoria’s housing stock – with a comprehensive package of energy andwater efficiency measures over the next five years. But not just any homes. The OneMillion Homes alliance believes a comprehensive energy and water retrofit programshould be directed to households who are the most in need of home improvements andwho can’t afford the upfront costs needed to make the efficiency changes necessary. Theprimary beneficiaries of the One Million Homes program will therefore be concessioncard holders, including households on a low income, seniors, people with disabilities orchronic disease, carers, and those suffering energy hardship.


The problems:wasting waterthrough taps,toilets andshowers;inefficientelectric storagehot watersystems; andcracks andgaps that letwinters cool airand summer’swarm air in,making itdifficult towarm or coolyour houseefficiently.Other problemsincludeinefficientlight globes,fridges andlack ofinsulation. Photo: EV

2. Why we need a One Million Homes package

Comprehensive home retrofit programs can reduce greenhouse gas emissions, savewater, increase the affordability of energy and water bills, improve comfort and health,and create new green collar jobs. Research undertaken by the Brother of St Laurence andKPMG1, and built on by Environment Victoria2, shows that energy and water efficiencyprograms can provide these multiple benefits to households and the wider community.

2.1 Reducing emissions and water use

Climate change presents a clear and present danger to ecosystems, communities andeconomies. As Professor Garnaut so powerfully stated in The Garnaut Review “the failureof our generation (to address climate change) would lead to consequences that wouldhaunt humanity until the end of time”.3

Energy efficiency is one of the largest and cheapest ways to cut emissions. TheInternational Energy Agency estimates 65 percent of global emission cuts by 2020 willcome from energy efficiency4. In the Australian context, ABARE in 2007 concluded that, in an assessment of all ‘currently available and plausible future technologies’, energyefficiency would likely contribute 55 percent of total carbon abatement for Australia by20504.

The residential sector contributes 17.5 percent of Victoria’s total greenhouse gasemissions6. By retrofitting half of Victoria’s building stock for energy and waterefficiency within five years, we can save energy and reduce greenhouse gas emissionsby an estimated 2.38 million tonnes and water consumption by 32.5 billion litres of watereach year. Energy efficiency remains one of the cheapest ways to reduce greenhouse gasemissions7, and is also a premium area for employment growth.

2.2 Easing financial stress

Housing with poor thermal efficiency (no insulation, no window coverings, inefficientappliances and no fixed heating) contributes to energy hardship for low incomehouseholds8. About one-third of Victorian households have difficulties in heating theirhomes in the colder months, with concession households and renters the most likely toencounter difficulties9.

Many households are in financial hardship, struggling to pay their utility bills. Energyprices increased 50.6 percent from 2000 to 2008 and are projected to increase by a further25-52 percent without a carbon price and 30-70 percent with a carbon price by 202010.Refrigeration, hot water systems and heating are major areas of energy use and keycauses of energy hardship11. Water prices are also rising, with the Essential ServicesCommission confirming in mid-2009 an increase of between 51 percent and 64 percent


A solar hot watersystem - one of themeasuresavailable underthe program.Photo: MEFL

in water and sewerage bills for Melbourne households over the next four years12.Addressing energy and water use in low income households requires flexible responses.For some households material upgrades are required, while for others understandingefficient use of appliances and home features is key13.

2.3 Improving comfort and making our homes climate safe

With past emissions already locking in further climate change, it’s clear that climatechange will impact directly on our homes. We need to prepare them for highertemperatures, more erratic and extreme weather events and higher energy and watercosts. It makes sense to prepare our homes to withstand future environmental andeconomic shocks.

Energy efficiency can increase the comfort of homes by reducing humidity and damp,and maintaining warmer temperatures inside homes. This has been found to have arange of health benefits relating to respiratory illness and asthma14. It can also helpprotect householders from extreme temperatures such as heatwaves by increasing theirability to keep their home cool. The Chief Medical Officer of Victoria estimates that atleast 374 people died as a result of the Victorian heatwave in January 2009. Many moresuffered non-fatal episodes of extreme discomfort and illness. The most vulnerable toextreme heat are people who are elderly or have a disability or chronic illness, especiallythose living in poor quality housing 15.

2.4 Growing green collar jobs

As of 2002 (the last date for which survey data isavailable), the energy efficiency industry in Victoriawas valued at $334 million and employed 5700people16 The industry is growing rapidly, so thesefigures are likely to be significantly higher.

Victoria’s market for sustainable water systems iscurrently valued at $900 million and employs anestimated 6000 people17. Victoria’s 5-star housingstandard has delivered energy efficiencyimprovements for new homes since introduced in2004. The introduction of 6-star housing standards inMay 2011 is estimated to create an additional 700 jobsin Victoria18. However, an estimated 1.9 millionVictorian homes built before 200419 still have energyratings of 2-stars or less20. Thes homes are in desperateneed of improvement.

2.5 Why one million homes?

In the past energy and water efficiency programs,while successful, have been limited in scope orpiecemeal in their delivery. The climate crisis we face,along with dwindling water supplies and growinghousehold financial stress demands that in 2010 wedesign and fund retrofit programs on a larger anddeeper scale.

The One Million Homes program is visionary andambitious. In 2008 there were 2,056,500 dwellings inVictoria21. A retrofitting program with the target of onemillion homes will cover roughly half of Victoria’shousing stock. Only a program of this scale can deliverall the benefits detailed in this report and a step changeimprovement in Victoria’s housing stock.

If this program were rolled out nationally, the benefitswould be even greater. It would reduce Australia’semissions by approximately 11.9 million tonnes,reduce water use by approximately 130,000 millionlitres and create up to 27,800 new jobs.


Home retrofitter –just one of themany new jobscreated under aOne MillionHomes program.Photo: MEFL

3. Why target low-income households?

There are many efficiency products on the market and government rebate programshave been effective in making energy and water efficiency more attractive to higher-income households. Low-income households who can’t afford the upfront expense ofefficiency products, even with partial rebates, don’t receive these benefits. Yet these arethe households that suffer most from higher energy and water prices and are most likelyto live in poor quality housing.

The One Million Homes program therefore aims to target low-income households andpeople experiencing financial difficulty. In addition, households which will benefit mostfrom retrofitting, including older people and those with disabilities or chronic healthconditions, will be prioritised.

4. Providing best value energy and waterefficiency measures to households

By providing a single in-home ‘one stop shop’ approach to retrofitting one million homes,we can package together existing efficiency and rebate programs with additionalinvestment in high value efficiency measures. This ensures that the best value efficiencyretrofits are available to those who need them most. It also reduces the cost of householdefficiency programs in the long term associated with recruiting and re-visiting the samehome numerous times to install different efficiency measures through different programs.

Modelling by KPMG22 has identified the most cost-effective efficiency measures forhouseholds. These measures and their implementation costs are detailed in the tablebelow. The One Million Homes package will provide an audit for each dwelling and aselection of appropriate efficiency measures. By providing a flexible package ofmeasures, each household receives a retrofit package that complements those efficiencymeasures already in place in their home. This will have the effect that the poorest qualitydwellings receive greatest assistance.


100% $400

20% $70* $0.85 $45

75% $600 $1.35 $70

28%23 $1,100 $3.65 $190

23% $2,500 - $5,500 $5.00 – $12.70 $260 – $660

5%24 $3,000 - $4,000 $3.45 – $9.60 $180 – $500

50% $95 $0.40 $21

20% $750 $1.00 $51

90% $40 $0.50 $25

15% $950 $1.65 $86

$2,570

$296

Proportionof dwellings

Cost of efficiencymeasures before

rebates andincentives

Weekly savings tohousehold energy

and water bills (no carbon price)

Annual savings tohousehold energy

and water bills (no carbon price)

Audit

Upgrade household with CFLs

Weather sealing retrofit (priority selectionfrom door strips, vent and crack seals, pelmetsand curtains)

Ceiling insulation

Solar electric or gas-boosted hot water systemto replace inefficient electric storage hot watersystems

Electric heat pump hot water system toreplace inefficient electric storage hot watersystems, where solar systems are not suitable

High efficiency showerhead

Dual flush toilet

Tap flow controllers

Fridge upgrade for old and inefficientfridges/freezers

Average cost per dwelling

Average saving per dwelling per year

* Assuming 12 light globes are replaced per household. Note: Where a bracketed cost is indicated, program costs are calculated based on the average of the bracketed range.

Retrofit activity

5. Energy audit and advice

A key component of the One Million Homes program is an initial household audit andfollow-up advice. Tailored information and advice is essential to ensure that householdsare able to get the best value from the energy and water they use, and can maximise theenvironmental benefit of household retrofitting. For this reason, households needaccurate and relevant information about energy and water efficiency that relates to theirlives and their specific housing structure, furnishings and appliances25.

Households accessing the One Million Homes program will receive:

• A tailored energy and water audit

• Explanation of the equipment being installed and how best to use it

• Energy and water use behavioural change advice and support information

• Information and advice regarding utility concessions and eligibility

• Referral to support services for those households at risk.

The average cost of the audit and advice is $400. For some households, the general levelof support will be required and the audit and advice may cost only $30026. Others whoface financial hardship or have low energy and water efficiency literacy will need higherlevels of support.

To provide this level of comprehensive service, auditors should be trained in the technicalskills required for auditing, the skills necessary to identify and support householders atrisk of financial hardship and in cultural competency and respect. Auditors will also beequipped to ensure that households are accessing all concessions available to themincluding winter energy concessions.

An opportunity for the One Million Homes program is that it could harness the skills of,and provide employment for, those who trained to be Green Loans Assessors throughthe Green Loans Program.


The solutions: dual flush toilets,weather sealing gaps and cracks,solar hot water systems, flowrestrictors on taps. Other solutionsinclude efficient fridges,insulation and compactfluorescent light globesPhotos: EV

6. Financial costs and benefits of a One Million Homes program

In recent years there has been significant investment in energy and water efficiency bythe State and Federal Governments. The Home Insulation and Solar Water Heatingrebates in particular have reduced the level of investment required to deliver acomprehensive retrofit program to a million Victorian homes.

The table above shows that that the average cost of providing this package is $2,570 perhousehold. Therefore the total cost of the program will be roughly $2.57 billion over 5years or $514 million per year. These costs have been calculated on the basis of priorwork by KPMG27 and Environment Victoria28, and have been updated to reflect recentprice reductions and installations delivered in the rollout of other programs (eg solarwater heating and insulation). Costings of measures, eg audit costs, draw on theconsiderable experience some members of the One Million Homes Alliance have aspractitioners of energy and water efficiency retrofits.

While the program will require considerable new investment from the State orCommonwealth Governments, significant funds are already on the table. For examplecurrent (2010/11) Federal and Victorian rebate and incentive programs contribute up to$400 million in annual funding for efficiency measures in Victorian households. Utilisingthese funding sources could reduce the funding gap for a comprehensive retrofittingprogram to just $114 million annually presuming continuation of current programs.Appendix 1 details current State and Federal energy and water efficiency programs thatcould contribute towards the One Million Homes program target. Investment by landlordswill also be leveraged through incentives and standards that will help achieve fundingrequirements.

The financial benefits of the One Million Homes program far outweigh the costs. As wellas achieving significant emissions and water use reductions, the One Million Homespackage aims to help households better manage their energy and water use at minimalcosts. The program will deliver estimated savings of $296 per household per year and$296 million to the Victorian community per year at current energy prices (June 2010).When a carbon price is introduced and as energy and water prices rise, these savingswill grow.

In 2008, KPMG modelling indicated that with the $20 per tonne CO2- e carbon price, acomprehensive energy efficiency retrofit can reduce electricity bills by an average of$313 to $700 per household, depending on the measures installed and the energy uselevel of the household29. Coupled with water efficiency measures and behavioural changeadvice, which are included in this program design, even greater savings to householdscan be expected.

7. Environment and employment benefits of theOne Million Homes program

Not only will the One Million Homes program provide a significant financial benefit to theVictorian community, it will also deliver significant greenhouse gas emission reductions,water savings and new green jobs.

The greenhouse gas emission reductions of the program are estimated at 2.38 milliontonnes CO2-e per year. That’s roughly 2% of Victoria’s emissions. It will also deliver anestimated 32.5 billion litres of water savings each year. Together these two benefits amountto a significant step forward in the environmental performance of our housing.

Further, retrofitting one million homes is estimated to create an additional 3000 - 6700new jobs over the five years of the program. Over 40 percent of these will be semi-skilledproviding opportunities for disadvantaged job seekers.

Retrofitting One Million Homes is a crucial investment in Victoria’s future. It delivers longterm affordability in energy and water bills, locks in low cost emissions reductions,alleviates pressure on water supplies, and improves household resilience to temperatureextremes such heatwaves, while decreasing the risk of damp and exposure to extreme cold.


8. Governance and implementation

The One Million Homes program should have a slow start and increase capacity over thefive year period to ensure high quality delivery of the program.

Ideally the program would be administered by Sustainability Victoria, and tendered tothe community sector, and small and medium enterprises. The tender could be designedto deliver quality assurance. For instance participation in the tender system could bethrough the granting of a license by Sustainability Victoria. The license would only beissued once the participants have satisfied a number of conditions established to ensurethat only reputable operators who have the necessary skills, capacity, capital and safetystandards to meet the aims and objectives underpinning the tender are successful30.

Auditors will need technical expertise relating to domestic energy and waterconsumption, but will also need training and support to identify social and culturalissues, and ensure that the social equity objectives of the program are being met andmaximised.

The program will primarily target concession card holders, including health care cards,pensioner concession cards and low-income health care cards. This ensures that those ona low income – who cannot afford energy and water efficiency measures – are receivingsupport. It also ensures that elderly people and people with chronic health conditions –who are most vulnerable to extreme weather events like heatwaves – are prioritised.

Non-concession card holders experiencing energy hardship could also be referred to theprogram through hardship programs and financial counselling services. Research byKildonan UnitingCare finds that eligibility for energy efficiency support needs toencompass a full conceptualisation of hardship, rather than narrower criteria signallinglow income, e.g. through government concession eligibility. Kildonan UnitingCare hasfirst-hand experience of growing ‘middle class hardship’ in the community, particularlythrough its financial counselling services with people who do not have concessionstatus31

There are around 750,000 concession card holding households in Victoria today. Due togrowth in the number of people eligible for concessions, at least 788,258 householdswould be expected to be receiving a concession by the end of the fifth year of theprogram. Further, many households move in and out of home and of concession statusbased on changes in their employment, age and health status. Targeting concession cardholders and energy hardship households alone should allow the program to reach onemillion households. However, the program should be reviewed in the second or thirdyear of its operation to ensure the one million homes target is met.


The Brotherhoodof St Laurence’sEnergy and Watertaskforceundertake homeretrofits. Photo courtesy of Ross Bird

9. Delivery considerations for different household types

Different household types – including owner-occupiers, renters in public housing, rentersin private dwellings, and those in non-fixed accommodation – face a variety of differentbarriers to implementing energy and water efficiency measures. In this context differentdelivery mechanisms and incentives will be required to achieve a comprehensive retrofitin each home.

Barriers faced by most household types include:

• Information barriers: knowledge about which efficiency measures are the mostsuitable for their property, the costs and the benefits of these measures, andwhere to purchase them.

• Time barriers: in our busy lives we face a series of stresses every day that makeit difficult to take the time and energy to research, purchase and install theseproducts.

In addition to these barriers, concession card households face financial barriers tomeeting the up-front cost of energy and water efficiency measures. While efficiencymeasures deliver significant savings over the lifetime of the product, the upfront cost ofthese measures can be prohibitive for those living on low incomes, pensions and thosewith chronic health conditions.

9.1 Home Owners

Twenty-four percent of Victorian households are home owners with a concession card.Thus roughly half of the One Million Homes package will be delivered to thesehouseholds by brokering access to existing rebate opportunities and providing additionalsupport so that households can receive the full package of measures with no out-of-pocket expenses.

9.2 Private rental homes

Many Victorian concession card holders live in rental properties. Approximately 30percent of concession card holders in Victoria are renters32, compared to the state averageof 24 percent33. Thus rental properties make up a significant part of the one millionhomes target.

Currently tenants in rental properties have neither the financial incentive nor the rightto carry out alterations to improve the energy efficiency of their home. Because rentersdo not have security of tenure, they are unlikely to spend money on fixed measures thatcan provide savings over a number of years. Unfortunately most energy efficiencymeasures are not transportable between properties. Landlords are also unlikely to investin efficiency measures as they do not receive the benefit of reduced energy and waterbills (which are delivered to the tenant). This is called the split incentive and is asignificant barrier to energy and water efficiency improvement in rental properties.Further, even if tenants do decide to invest in efficiency measures, landlords are notcurrently compelled to consent to such alterations or to ensure their properties achievebasic standards.

A combination of legislative reform and targeted assistance for rental properties isrequired to overcome these barriers. The introduction of minimum standards for rentalproperties will provide a cost effective mechanism to drive the uptake of these basicenergy and water efficiency measures in rental properties. However, landlords andtenants will still be eligible to receive support for further measures under the One MillionHomes program. Tenants will receive non-fixed appliances, auditing and advice free ofcharge. Landlords will be provided with streamlined access to the range of existingrebates and further incentives to install the full package of water and energy efficiencymeasures.


9.3 Public and community housing

Nearly 10 percent of the One Million Homes target could be reached by retrofitting the77,259 public and community housing properties in Victoria through the provision ofadditional funding to the Office of Housing.

9.4 Apartments

Households living in apartments can face specific barriers to implementing efficiencymeasures relating to the physical limitations of the property, for example they havelimited space for solar or heat pump hot water systems, or relating to body corporateagreements which can exclude implementation of some measures. Wider considerationof these issues is necessary to ensure energy efficiency benefits are available to thesehouseholders.

9.5 Caravans

Special consideration is required to ensure people living in caravans and other forms ofnon-fixed accommodation receive the benefits of this program and are not overlooked.

9.6 Energy Hardship

Households referred through hardship programs including financial counselling services,will receive auditing, advice and retrofitting free of charge. These households do notrequire a concession card to access the program.


Worker installinginsulation – one ofthe measuresavailable underthe program. Photo courtesy ofFletcher Insulation

10.Complementary policies – Mandatory disclosure and regulatory standards for existing rental homes

To maximise the benefits to One Million Homes it will be critical that the programcomplements existing and new programs and sets overarching policy goals. Importantlyit should be supported by regulatory standards that require rental homes to meetacceptable minimum standards at the time of lease.

It is currently proposed that mandatory disclosure of property efficiency at the point ofsale or lease will be introduced by May 2011. Based on experience in the ACT, this willincrease the value of more efficient properties on the market and create incentives forhome owners and landlords to invest in efficiency.

However, mandatory disclosure operates through the mechanism of consumer choice.Low income renters have very few housing options and so mandatory disclose withoutminimum standards may simply push people with limited housing options into the leastefficient properties.

There are currently no minimum standards on rental properties. This makes it legal forlandlords to rent out properties that are not weatherproof, have no window coverings,inefficient built in appliances or no hot water34. According to Campbell, of the 74,000public housing properties in Victoria, 56,351 fail to meet energy efficiency standards35.The projected impacts of climate change will exacerbate these problems.

While many measures can be installed in rental dwellings at little cost, landlords fail toimplement them as they don’t benefit from the reduced energy or water bills. Standardsremove the split incentive that currently sees many renters living in homes with poorenergy and water efficiency while having minimal ability to invest in efficiencymeasures.

There has also been limited uptake of existing voluntary efficiency incentives availableto landlords. Minimum standards will encourage landlords to take advantage ofefficiency rebate opportunities. As described earlier landlords and tenants would still beeligible to receive support for further measures under the One Million Homes program.


A home that mightbe eligible for anenergy and waterretrofit.Photo istock

11.Conclusion

The One Million Homes program provides a golden opportunity to reduce greenhousegas emissions, save energy, save water and generate new green jobs. It can also improveaffordability of utility bills for low income households at a time when energy and waterprices are rising rapidly, and enhance comfort, reduce damp and increase protectionfrom extreme weather events such as heatwaves.

An effective and efficient One Million Homes retrofit program should:

• Provide a tailored home audit and advice

• Deliver a comprehensive set of energy and water efficiency measures tohouseholds

• Be delivered by trusted organisations and businesses with the skills to workwith households to ensure the safety and efficacy of the program

• Target concession card holders and those experiencing energy hardships. Thesehouseholds tend to live in the poorest quality dwellings, are most likely tostruggle to pay their utility bills. They face financial barriers to meeting theupfront cost of installing efficiency measures.

The program should leverage existing funding from government rebate programs andmarket mechanisms with supplementary funding to provide the package with no out-of-pocket expenses to concession card holders. Current Federal and VictorianGovernment rebates and market mechanisms are projected to deliver $400 milliondollars in efficiency measures to Victorian households in 2010/11. By building on thisinvestment to increase the support, the Victorian Government can deliver significantsavings to household bills.

Delivery will be different for different household types and must account for the barriersthese households face. To ensure private renters can benefit from energy and waterefficiency measures, minimum standards in rental must be introduced in tandem withincentives to landlords to install efficiency measures.

In the past energy and water efficiency programs have been limited in scope orpiecemeal in their delivery. The climate crisis we face, along with dwindling watersupplies and growing household financial stress, demands that in 2010 we commit toretrofit programs on a larger and deeper scale.

The One Million Homes alliance has formed to advocate for new retrofit programs ofsufficient scale to generate timely and lasting benefits to the environment and thecommunity. By committing to retrofitting one million Victorian homes over the nextfive years, Victoria’s next government could create a lasting legacy of more efficient,comfortable and affordable homes for all Victorians.


Appendix 1: Existing State and Federal energy and water efficiency programs

The cost of delivering comprehensive retrofits to half of Victoria’s existing homes by2016 could be substantially reduced by effectively building on past and allocated futureexpenditure on household efficiency by both the Victorian and Federal Governments. Amore coordinated approach will increase access to existing government incentives andmarket based measures for low income households. These households have been under-represented in the uptake of these programs to date.

Green Start

Green Start is a $130 million initiative to help improve the energy and water efficiency oflow income and disadvantaged households. This program is due to start in January 201136.

Green Loans

Provides a home sustainability assessment to the value of $200 per household. Some360,000 home sustainability assessments were undertaken up to February 2010.Completed audits could be incorporated into the service received under the MillionHomes program to avoid duplication and reduce delivery costs. A further 600,000assessments have been funded37.

Water Wise Program

Water efficiency measures for water hardship households up to the value of $500 per household38. The program started in January 2009, with a budget of $700,000 overfour years39.

Victorian Water Smart Gardens and Homes Rebate Scheme

Provides water efficient showerheads, upgrading to eligible dual flush toilets, gardenproducts, rainwater tanks and systems for reusing household waste water up to the valueof $550 per household40. Households are only eligible for one measure. $100 is availablefor dual flush toilets as of May 2010 and $10 is available for efficient shower roses. Thisprogram has been funded for eight years from 2003 to 2011. It has received $30 millionin funding.


Green Loans Energy Audit $15 2 Energy audits

Green Start $32.5 1+ Range of measures

Victorian Water Smart Gardens $3.75 Unknown Dual flush toilets, and Homes Rebate Scheme low-flow shower rosesEnergy Saver Incentive $70 3 CFLs, low-flow shower roses,

solar hot water systems, heat pump hot water systems

Energy and Water Task force $1.87 Unknown Range of measures

Victorian Government Rebate $25 0.5 Solar electric or for Solar Hot Water gas hot water systems

Renewable Energy Bonus Scheme $218.8 1 Solar electric hot water systems, heat pump hot water systems

Scale-scale Renewable Energy Scheme $33.6 5 Solar electric or gas hot water systems, heat pump hot water systems

Showerhead Exchange Program $0.75 0.5 Showerheads

Total $401

Program Annual Spend $ Million Program length remainingfrom Jan 2011 (years)

Measure delivered

Victorian Government Rebate for Solar Hot Water

Between $400 and $1600 to assist regional households41 and $300 and $1500 to assistmetropolitan Victorian households42 to switch their existing electric hot water systemto solar. $300-$700 for switching your peak electric hot water system to a high-efficiencygas hot water system where gas is available43. This program was funded $50m for twoyears starting in June 2009. In May 2010, 20,000 households had taken up the program44.

Renewable Energy Bonus Scheme

This scheme provides $1000 to homeowners installing solar hot water systems on theirroofs and $600 for installation of heat pump systems45. The scheme is for 2.5 years fromJune 2009 to January 2012.

Small-scale Renewable Energy Scheme

As of January 2011 under proposed Federal Government legislation, Renewable EnergyCertificate (REC) values will be fixed for households at $40 per certificate. Solar hotwater systems receive 10 to 40 certificates depending on the system’s capacity, with themost common systems receiving 10 to 20 certificates. Therefore households will receivea one-off return of $400 to $800 per system46. Heat pumps tend to be larger systems andthus a slightly larger return can be expected.

Victorian Energy and Water Taskforce

The Victorian Energy and Water Taskforce started in 2002 and had retrofitted 4,700 low-income homes at an annual cost of $980,000 by June 2008. An additional 8,000 homeswill be retrofitted with energy and water saving measures by 201147.

Energy Saver Incentive

This program leveraged $210 million in energy efficiency measures in the first threeyears of operation48. This is expected to continue in the years ahead.

Showerhead Exchange Program

The Showerhead Exchange Program received $750,000 in the 2010/11 budget to bringthe total number of free showerheads given to Victorians to 500,00049.


Endnotes.1 KPMG 2008.2 Environment Victoria 2009.3 Garnaut Climate Change Review, 2008p.597.4 IEA reference.5 ABARE 2007, Report 7.16.6 George Wilkenfeld and Associates 2008.7 For example, McKinsey & Company 2008.8 VCOSS 2009.9 Roy Morgan Research 2008.10 KPMG 2008.11 Kildonan UnitingCare 2009.12 Essential Services Commission 2009.13 As above.14 World Health Organisation 2004.15 VCOSS 2009.16 Mark Ellis and Associates 2003.17 Derived from national figures in ACF andACTU 2008, Green Gold Rush, AustralianConservation.

Foundation and Australian Council ofTrade Unions, Melbourne, assigning 25%of national employment and turnover toVictoria. These figures include revenue andemployment.

related to the agricultural water sector.18 Victorian Government 2010.19 ABS 2004.20 Department of Sustainability andEnvironment 2006.21 ABS 2008.22 KPMG 2008.23 Based on ABS 2008 data on insulation,plus the 158,000 houses recorded to havebeen insulated as of December through thefederal insulation program. Preceding thisprogram and over December to Februaryduring the program’s operation it is highlylikely more Victorian households wereinsulated. Hence this is an overestimate ofthe insulation requirements.24 23% + 5% = 28% Victorian householdshad electric hot water systems in 2008. ABS2008.25 Based on experience of auditors workingwith alliance member organisationsincluding the ATA, Environment Victoria,Kildonan Uniting Care, Moreland EnergyFoundation and the Brotherhood of StLaurence.26 Kildonan UnitingCare 2009.27 KPMG 2008.28 Environment Victoria, 2009.29 KPMG 2008.30 Kildonan UnitingCare 2009.31 Derived from ABS, 2006 CensusQuickStats : Victoria,<http://www.censusdata.abs.gov.au/ABSNavigation/prenav/ViewData?&action=401&tabname=Summary&areacode=2&issue=2006&producttype=QuickStats&javascript=true&textversion=false&navmapdisplayed=true&&breadcrumb=PLD&#Tenure%20Type>.32 Roy Morgan Research 2008.33 VCOSS 2009.34 Campbell, J ‘Green Apartments Too Hotto Handle’, The Sunday Herald Sun,Victoria, 29 March 2009.35 Department of Environment, Water,

Heritage and the Arts, Green Start,<http://www.environment.gov.au/sustainability/greenstart/index.html>.36 Department of Environment, Water,Heritage and the Arts, Green Loans,<http://www.environment.gov.au/greenloans/>.37 Water Wise Guidelines<http://www.dhs.vic.gov.au/__data/assets/pdf_file/0011/364286/water-wise-guidelines.pdf>.38 Cheryl Roche, Personal communication,Department of Human Services, March2009.39 Victorian Government 2009.40.Sustainability Victoria, Resource Smart,<http://www.resourcesmart.vic.gov.au/for_households/rebates_3096.html>.41.As above.42 As above.43 Personal communication, Robert Hynes,Sustainability Victoria.44 Australian Government, Living Greener,<http://www.livinggreener.gov.au/rebates-assistance/victoria/solar-hot-water-rebate>.45 Enhanced renewable energy factsheet,<http://www.climatechange.gov.au/government/initiatives/~/media/publications/renewable-energy/enhanced-ret-fs-pdf.ashx>.46 Katrina Woolfe, Personalcommunication, March 24th 2009.47 Department of Primary Industry, Victoria2007.48 Water Projects The Roadmap Back FromRestrictions.

<http://www.premier.vic.gov.au/newsroom/10255.html>.

ReferencesABS 2004, Homes built prior to 2004,Household and family projections Australia2001 to 2026, Commonwealth of Australia,page 82.

ABS 2006, Census QuickStats : Victoria,<http://www.censusdata.abs.gov.au/ABSNavigation/prenav/ViewData?&action=401&tabname=Summary&areacode=2&issue=2006&producttype=QuickStats&javascript=true&textversion=false&navmapdisplayed=true&&breadcrumb=PLD&#Tenure%20Type>.

ABS 2008, Environmental Issues, EnergyUse and Conservation, March 2008, Cat.4602.0.55.001.<http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/4602.0.55.001Mar%202008?OpenDocument>.

ACF and ACTU 2008, Green Gold Rush,Australian Conservation Foundation andAustralian Council of Trade Unions,Melbourne.

Department of Sustainability andEnvironment 2006, Energy EfficiencyAction Plan, page17.

Department of Primary Industry, Victoria2007, Victorian Energy Efficiency Target(VEET) scheme fact sheet.

Environment Victoria 2009, Victoria – theGreen Jobs State: Seizing theOpportunities, http://www.environmentvictoria.org.au/sites/default/files/useruploads/Green%20Jobs%20Report%20-%20FINAL.pdf?phpMyAdmin=8%2CSW0pHXD5tewKNvRRFVgHetb%2Ca

Essential Services Commission 2009,MEDIA RELEASE No 7/2009, 26 June 2009,Regulator Confirms Water Price Increasesfor Melbourne, <http://www.esc.vic.gov.au/NR/rdonlyres/5D84E066-C836-4C0D-9646-B433441041DD/0/MRPriceReview20091320090625.pdf>.

George Wilkenfeld and Associates 2008,Victoria’s Greenhouse Gas Emissions 1990,1995, 2000 and 2005: End use Allocation ofEmissions, Report to the Department ofSustainability and Environment.<http://www.climatechange.vic.gov.au/summit/Resources/GW%20Report%20-%20Victorias%20Greenhouse%20Gas%20Emissions.pdf>.

Kildonan UnitingCare 2009, Energy AuditProgram Evaluation 2004-2006, KildonanUnitingCare.

KPMG 2008, A national energy efficiencyprogram to assist low income households,KPMG, Brotherhood of St Laurence andEcos Corperation, September 2008.

Mark Ellis and Associates 2003, theAustralian Sustainable Energy Survey2002. Estimating the Contribution of theSustainable Energy Industry to theAustralian Economy. Published SEDA.

McKinsey & Company 2008, An Australiancost curve for greenhouse gas reduction,www.mckinsey.com/mgi.

Roy Morgan Research 2008, VictorianUtility Consumption Household Survey2007, Prepared for Department of HumanServices, http://www.dhs.vic.gov.au/__data/assets/pdf_file/0008/307358/victoria-utility-consumption-survey-2007.pdf>.

VCOSS 2009, A Future Focused HousingStandard - The case for rental housingstandards to help vulnerable householdsadapt to climate change, Victorian Councilof Social Services, <http://www.vcoss.org.au/documents/VCOSS%20docs/Housing/VCOSS%20minimum%20housing%20standards%20Oct%2009.pdf>.

Victorian Government 2009, Our WaterOur Future, Water Smart Gardens& HomesRebate Scheme, http://www.ourwater.vic.gov.au/__data/assets/pdf_file/0013/2461/Rebates_Brochure.pdf

Victorian Government 2010, Jobs for theFuture Economy: Victoria’s Action Plan forGreen Jobs, <http://www.business.vic.gov.au/busvicwr/_assets/main/lib60254/jobs%20for%20the%20future%20economy.pdf>.

World Health Organization 2004, Reviewof evidence on housing and health:background paper, Fourth MinisterialConference on Environment and Health,April 2004.


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