Victoria
New South Wales
South Australia
Queensland- Heating and Cooling accounts for the largest aspect of our energy needs in the home, and AC is at the forefront of combating this.
- The industry is evolving rapidly to support residents and business owners across the country in adopting more efficient air conditioners, from new technology to scheme incentives and shifting consumer sentiment.
- Heating and cooling efficiently has become a priority in the emissions reduction journey domestically.
- Suppliers and installation companies across Australia are helping to drive the state based scheme incentives available for consumers and more consumers are becoming aware of what’s available and the benefits for upgrading.
Australia is a land of diverse climates and has long relied on air conditioning as a main line of defence in the sweltering heat of summer and the chilly temperatures of winter. However, as concerns over energy consumption and environmental impact rise, a notable shift is occurring in the market for air conditioning units and consumers are turning to new, efficient air conditioners that promise both comfort and sustainability.
The Importance of Heating & Cooling in the Home Energy Profile.
In Australia, heating and cooling our living spaces account for around 40% of our total energy use which is quite the slice of the home energy pie, and something Australians have reluctantly accepted on their energy bills to keep comfortable for decades. It wasn’t until 2003 that Australia set housing energy-efficiency standards in the National Building Code and so it’s not all that surprising that many homes around the country are considered leaky, or thermally inefficient. In a large study of homes in major cities across the country, it was found that the average home experiences 15 air changes per hour (15ACH 50pa), which means that the air in a home that is heated or cooled, is reheated or cooled 15 times per hour to maintain a given temperature. This is considered poor against international standards.
To compound the heating and cooling energy leech, those of us using older air conditioners to maintain a comfortable home climate have our work (or energy bill) cut out for us. Over time, components in old air conditioners, such as compressors, coils, and refrigerant lines start to degrade, which can significantly impact their ability to effectively cool/heat a space.
It’s also very common that an older AC unit will have a lower SEER (Seasonal Energy Efficiency Rating), meaning they use more energy per hour when they are switched on. In summary, older air conditioners have to work much harder to do the same job.
With demand shifting around the globe for more efficient heating and cooling, air conditioners have reduced in cost due to production and manufacturing efficiencies and brand-new air conditioners with modern features are becoming more affordable than ever. Demand has also continued to be driven on home soil by increasing national and state commitments to sustainability and a cleaner grid, and with access to information readily available online, consumers are becoming more informed about the environmental impact of their purchasing decisions and are actively seeking out appliances including air conditioners with higher energy efficiency ratings and lower environmental footprints.
Another key influence for consumers has been the notable rise in the price of electricity, pushing consumers to look for cheaper ways to stay comfortable.
Market Trends & Projections.
In a recent report by DCCEEW, the key drivers for a three-fold increase of air conditioners in Australia since 1998 and the expected increase in demand in the years ahead are the following:
-
- A greater householder expectation for thermal comfort
- Increased affordability due to manufacturing keeping costs lower. The industry expects this will continue
- Air conditioners are considered a standard feature in new homes
- That more than one air conditioner can be installed per household (i.e. split systems).
To further reinforce this, in a report released in 2022 by DCCEW called Cold Hard Facts, 2021 was the fifth year in a row where air conditioner sales were estimated at 1.2-1.3 million units. This comprised of 1.09 million non-ducted split systems and 178,000 ducted split systems, with ducted systems up by at least 10%. As Australia’s population continues to grow at an average of 1.4% per year and heat pumps continue to become desirable replacements for gas and electric appliances, growth in the market is expected to continue.
It’s clear that our heating and cooling needs in the country are felt closely by many. With the average supply and installation cost for a new reverse cycle split-system air conditioner between $2,500 – $5,000 depending on brand, size and labour, it’s understandable that the upfront cost could present a barrier to adoption for many, particularly those in lower-income households, however, as a result of the Energy Savings Scheme (ESS) in NSW and the Victorian Energy Upgrades Program (VEU) in Victoria, the barrier to adopting new and significantly more efficient technology to heat and cool our homes and businesses are being drastically reduced.
State Schemes & Their Impact.
Incentives offered under the state Schemes are attractive to consumers as they hold the promise of an often substantial price reduction.
South Australia, REPS
South Australia has the Retailer Energy Productivity Scheme (REPS), an energy efficiency-focused program that has operated and supported efficiency space heating and cooling upgrades since 2009, when it was first launched as the Retailer Energy Efficiency Scheme (REES). The REPS program has multiple methods that incentivise the installation of efficient heating and cooling systems and is one of the only state programs to incentivise the installation of evaporative air conditioners, recognising the use case for such systems in a largely dry and hot state.
The REPS scheme is set to continue until 2030, with a review scheduled for 2025 as the scheme and technologies mature.
Victoria, VEU
In Victoria, the Victorian Energy Upgrades program (VEU) is on a similar trajectory.
According to a Sustainability Victoria report, gas-ducted heating is the main form of heating used in Victoria, estimated to be in use for around 950,000 homes. With Victoria’s Gas Substitution Roadmap a key pillar of reaching emissions reduction targets of net zero by 2045, replacing the saturation of aging gas heating units around the state is an important part of the state’s strategy. In 2023 the VEU introduced the High-Efficiency Air Conditioner activity and since its introduction, the program has seen an estimated 6,224 high-efficiency air conditioners installed, either replacing hard-wired electric heaters, gas ducted systems, gas wall furnaces, or aging and inefficient air conditioners. With strong incentives helping remove the largest barrier to adoption, cost, it’s expected the new activity will become a key creator of Victorian Energy Efficiency Certificates (VEECs) on the approach to 2030.
New South Wales, PDRS
Since the Peak Demand Reduction Scheme (PDRS) was introduced as a complementary incentive on the air conditioning activity that was officially gazetted in 2021, air conditioner installs have been able to attribute two types of certificate – the Peak Reduction Certificates (PRC) and the Energy Saving Certificate (ESC), further increasing the incentive available for end-users.
Using the total number of PRCs created for air conditioning and a conservative average PRC creation per unit installed, approximately 18,000 new high-efficiency air conditioners have been installed in NSW. This illustrates that the incentive provided by the scheme is propelling uptake and helping to alleviate the upfront costs of purchasing a new air conditioner. In the 2022 ESS Scheme Highlights report, it was noted that there was $513 million in net bill savings as a result of 325,412 upgrades provided to over 230,000 households and businesses, abating over 3.2 million tonnes of GHG emissions.
Average incentives in each state for a range of heating & cooling upgrades
[Click the tables to enlarge]
Incentives like those offered under the state Schemes are attractive to consumers as they hold the promise of an often substantial price reduction. A survey conducted by NPD Group found that 21% of the 6,800 adults surveyed purchased a product sooner than expected due to a rebate promotion, and 9% of the adults purchased brands they would not have without a rebate offer.
As the state-based schemes gain momentum and consumers are increasingly exposed to the incentives available, there’s a growing expectation that rebates will be offered on quotations. By relationship, small to medium businesses and local providers looking to participate and offer these benefits to their customers are proliferating in order to compete, convert sales, and align with strengthening environmental sentiments.
Industry Response & Innovation.
The combination of state schemes and targets and environmentally conscious consumers are also influencing the development and advancement in technology with manufacturers investing in research and development to create innovative cooling solutions that deliver superior performance while consuming less energy. Features such as inverter technology, variable-speed compressors, and advanced refrigerants are making modern air conditioners more efficient than ever before, in some cases by 30% or more.
Getting Involved.
Ecovantage views heating and cooling as an integral part of a business or households energy efficiency journey and since 2022 we have partnered with a vast number of installation companies with strong community standing in NSW, VIC and SA. By being in direct conversations with residents and business owners around the country, Ecovantage routinely equips customers with knowledge about the benefits, savings, and feasibility involved with upgrading and connect them with our trusted partners.
As a company, Ecovantage is able to support businesses working in heating and cooling create the rebates that are continuing to make a noticeable and growing impact on the largest hurdle for many – cost.
If you are providing heating and cooling solutions in either NSW, VIC, or SA, we would love to hear from you and discuss how we can support you in offering scheme incentives to your customers.
Please complete the form below and one of our state-based Account Managers will be in touch.
