Morrison’s $25,000 grant could deliver full energy retrofit for social housing

The federal Morrison government’s $688 million home building and renovation stimulus has unleashed a torrent of suggestions for how the money could be much more meaningfully spent, with the same “jobs for tradies” outcome Scomo seems fixated upon.

As RenewEconomy has reported^[1], sustainability experts have lamented the new HomeBuilder scheme’s complete failure to drive a higher standard for energy or thermal efficiency standards in building and renovations as a massive missed opportunity.

Even worse, the requirement that applicants to the $25,000 subsidies must be home owners planning a minimum $150,000 spend on renovations or building blatantly ignores the opportunity to vastly improve the living conditions of some of Australia’s most vulnerable people.

So how could these generous cash grants be better spent?

According to a Twitter thread started by green finance expert Jeremy Burke^[2] – the head of product and strategy at Impact Investment Group – $25,000 is about what you would need for a full retrofit of a social housing dwelling: “Solar, battery, heat pump, insulation…the lot. Cost savings, health benefits, greater social equity.”

Burke does the sums in the tweet below, putting the bill for all of those basic improvements at somewhere between $20,000-$25,000, depending on the availability of other state-based savings that can be made on retrofits and technologies like solar and storage.

Broad estimates:
$4,000 – 5,000 for solar (3-4kW)
$7,000 – 10,000 for battery storage (subject to rebates)
$3,000 for air-sourced heat pump (hot water)
$3,000 insulation, air-sealing
$2,500 split-cycle air-conditioning
Around: $20,000 – 23,000 per dwelling

— Jeremy Burke (@jpsburke) June 4, 2020^[3]

Rob Murray-Leach, the head of policy at the Energy Efficiency Council, also weighs in.

“Doing the sums and $25k doesn’t just get you a basic energy efficiency upgrade – it gets you a safe, climate-proof, comfortable home,” he adds to the thread.

“With over 2,600 Australians dying each year from cold (twice the rate of cold-related deaths as Sweden) this is essential spend.”

As One Step Off The Grid reported earlier this week^[4], Australia’s standards for thermal and energy efficiency in housing are generally pretty woeful compared to the rest of the world, lagging 10-15 years behind Europe and parts of north America.

A Victoria-based study by a team at RMIT found that for homes designed to a minimum of 7.5 stars, the energy required for heating and cooling amounted to 40 per cent less over the course of one year than for a 6-star house – the current minimum standard under NatHERS.

The study highlighted numerous benefits of this improved thermal efficiency performance, starting with the greatly reduced energy costs that result from such a significant reduction in energy used to maintain thermal comfort.

A second benefit is that these homes spend a greater percentage of the time in the healthy temperature range (without the need for mechanical heating and cooling), which had the potential to improve health outcomes for occupants.

Thirdly, if there is a blackout, the homes can still maintain thermal comfort for an extended period of time. And finally, it means the homes can use smaller heating and cooling appliances (or remove them altogether) reducing capital, maintenance and replacement costs over the life of the home.

Add solar and battery storage and you have the potential to cut energy costs to near-zero for low-income and social housing.

And it would be great for jobs, too. As Murray-Leach points out, the International Energy Agency recently put out a brief about energy efficiency being a ‘job-intensive’ field^[5] that was a perfect target for government economic stimulus.

“Last year we SUPER conservatively estimated 120,000 jobs in (Australia) from EE upgrades,” he said.

“We are actively choosing not to to do this, with record low interest rates and capacity in our job market,” said Burke.

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