Victorian households are paying on average around $1,500 a year on electricity and that figure has been climbing for years. The real problem isn’t this year’s bill, it’s the one you’ll be paying in a decade if your home isn’t built or renovated to perform more optimally.
Switching retailers may help at the margins, but the building itself is what actually moves the needle. The decisions made at build or renovation time set your energy costs for the next twenty to thirty years, not the plan you’re on today.
At Yarrington Construction, we’ve spent over 20 years building and renovating across regional Victoria, and we’ve seen which of these decisions homeowners regret and which they don’t. Here’s what actually makes a tangible difference to your energy bills, whether you’re planning a new build or working with what you’ve got.
Why Your Home’s Structure Matters More Than Your Energy Plan
No electricity deal fixes a poorly insulated home. Heating and cooling make up roughly 40% of the average Australian home’s energy use, and most of that is lost through walls, windows, roofs and gaps in older or poorly built homes. You can shop retailers all day and still lose the battle through a gap under the back door.
Canstar Blue data suggests the average Victorian household spends around $1,564 a year on electricity. Homes that aren’t on an efficient plan, or aren’t built to perform, pay considerably more than that. And prices keep moving in one direction: Australian electricity prices rose 7.63% over a two-year span between 2023 and 2025, well ahead of inflation. One in six Australian households struggled to pay their electricity bill in the past six months.
Bills are likely to keep rising. The question is whether your home is designed to reduce demand on the grid or just keep contributing to it. A well-performing home cuts energy demand first. Solar and batteries then reduce what you pay for whatever is left.
What Makes a Home Genuinely Energy Efficient?
Energy efficiency isn’t a singular feature you tick off. It’s a stack of decisions that compound and getting the fundamentals right makes everything that follows easier.
Orientation & Passive Design
This is the single most-effective efficiency strategy there is and it costs nothing extra if it’s designed from the beginning. North-facing living areas, well placed eaves and cross-ventilation reduce your home’s heating and cooling load before you’ve switched on a single appliance. In regional Victoria’s climate, hot summers and cold winters, orientation matters more than most homeowners realise.
At the far end of this thinking sits Passivhaus, a rigorous international standard combining superior insulation, airtight construction, heat recovery ventilation and thermal bridge-free detailing to produce homes that need almost no active climate control. Full certification is a specialist undertaking, but the principles behind it inform good energy efficient design at all levels.
Insulation
The highest-return upgrade you can make, in either a new home or old one. Ceiling, wall and underfloor insulation work together to hold a stable year-round temperature. A lot of older homes across regional Victoria are significantly under-insulated and retrofitting is more achievable and cost-effective than most homeowners expect.
Windows & Glazing
Single glazing is the biggest thermal weak point in most existing homes. Double glazing cuts heat loss in winter and heat gain in summer, while uPVC frames tend to perform best in our climate. It also improves acoustic comfort which is particularly helpful if you live on a busier street.
Air Sealing
Easy to overlook, but draughts account for a solid share of heat loss in older regional Victorian properties. Sealing gaps around doors, windows, cornices and exhaust fans is low cost with a genuine impact on comfort and running costs.
Heating, Cooling & Hot Water
Reverse-cycle air conditioning is the most efficient heating and cooling option for most Victorian homes. Heat pump hot water systems can cut hot water energy use by up to 70% compared to a conventional electric system. Under NCC 2025, NatHERS Whole of Home ratings now assess appliances alongside the building envelope, not just the shell of the house.
NatHERS Ratings — What They Mean and Why They Matter
If you’re building a new home in Victoria, you’re already required to hit a minimum 7-star NatHERS rating. Understanding what that rating covers and what it costs to go further, helps you decide how far above the minimum to go.
NatHERS, the Nationwide House Energy Rating Scheme, rates a home’s thermal performance on a 10-star scale. Seven starts is the new minimum for Victorian builds and major renovations under NCC 2022/2025, stepping up from the previous 6-star requirement. The new Whole of Home rating goes further again, factoring in solar, appliances and hot water systems rather than just the building envelope.
Getting to 7 stars typically adds $5,000 to $10,000 to a build. The running-cost savings pay that back quickly, with modelled energy savings being significantly more than the required outlay. Pushing on to 8 stars buys better comfort during extreme heat and cold, which is genuinely relevant given the temperature swings experienced in regional Victoria.
Renovating rather than building new? The Residential Efficiency Scorecard programme provides an energy assessment for existing homes, and it’s worth doing before you commit to a scope. NatHERS ratings are also beginning to matter more to lenders, with some green home loan products offering improved terms based on a home’s star rating.
New Build vs Renovation — Where the Opportunities Differ
Energy efficiency looks different depending on whether you’re starting from scratch or improving what’s already there. Both are worth doing properly the first time.
New Builds
New builds give you the cheapest path to good performance, because orientation, glazing placement, insulation and service layout all cost far less to get right at the design stage than to fix later. NatHERS compliance is mandatory either way, so the real question is how far above the minimum you want to go. Designing the roof pitch and electrical infrastructure with solar in mind from the outset costs almost nothing extra.
Renovations
Renovations follow the same priority order: structure first (insulation, air sealing, glazing), then services (heating, cooling, hot water), then solar. Most renovation clients are surprised how much insulation and draught-sealing alone can shift things, often without touching a wall. The Household Energy Upgrades Fund gives access to subsidised finance for insulation, solar, batteries and efficient appliances, and a Residential Efficiency Scorecard assessment gives you a clear roadmap before you spend a dollar.
How Much Can You Actually Save?
The numbers vary by home and household, but the direction never does. A well-built or well-renovated home costs less to run, year after year.
A 6.6kW solar system delivers estimated annual savings of between $1,100 to $1,800 on electricity bills, and that’s before the building performance improvements that reduce your base demand in the first place. Swapping a conventional electric hot water system for a heat pump can cut hot water energy usage by up to 70%. Insulation and draught-sealing in an under-insulated old home can reduce heating and cooling costs by up to 40%.
These effects compound. A better-insulated home needs a smaller heating and cooling system, which costs less to buy, less to run and lasts longer. NatHERS ratings are also increasingly recognised by lenders and buyers alike, and energy-efficient homes are starting to command a premium on the open market.
Conclusion
The home itself is the investment. The decisions you make at the time of build or renovation set your energy costs for the foreseeable future, not the particular retailer who supplies your home’s energy. At Yarrington Construction, we’ve spent over 20 years building and renovating in regional Victoria, and we know what performs here and what doesn’t.
Key Takeaways:
- Fix the building envelope first: insulation, glazing and air sealing beat any energy plan
- 7-star NatHERS is now the Victorian minimum for new builds; going further pays for itself
- Renovations should follow the same order as new builds: structure, then services, then solar
- Insulation and draught-sealing are usually the highest-return upgrade for an existing home
- A better-performing home needs a smaller heating and cooling system, compounding the savings
Whether you’re planning a new build or considering upgrades to an existing home, we’d love to talk through what energy efficiency looks like for your project. Get in touch with the Yarrington team for an obligation-free consultation.
Frequently Asked Questions
Does Energy Efficiency Cost A Lot More To Build?
At 7 stars, typically $5,000 to $10,000 above a 6-star baseline for a new build, and the payback through lower running costs usually lands within a few years. Retrofitting an existing home varies depending on scope.
What’s The Best First Upgrade For An Existing Home?
Insulation and air sealing deliver the highest return for the cost in most regional Victorian homes. A home energy assessment through the Residential Efficiency Scorecard will confirm your specific priorities.
Can I Retrofit Double Glazing Into An Existing Home?
Yes. Double glazing can be retrofitted into most existing window frames. It’s one of the pricier individual upgrades, but it delivers lasting comfort and bill savings, particularly in our climate.
