1. Introduction
Introduction to how the Building Code regulates minimum insulation requirements through clause H1 Energy Efficiency.
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1.1. The Building Code regulates minimum insulation requirements through clause H1 Energy Efficiency
1.1.1. Insulation helps keep buildings cool in the summer and warm in the winter
Building Code clause H1 Energy Efficiency contains mandatory requirements to provide adequate thermal resistance (insulation) to buildings to help keep them energy efficient. Buildings need to have adequate insulation in roofs, windows, walls and floors to keep people warm, dry and healthy and to make sure that energy is being used efficiently. Insulation can make it easier to cool a building in the summer and heat a building in the winter helping to reduce the amount of energy used in all parts of the country.
1.1.2. In 2021, MBIE published changes to energy efficiency and insulation requirements
In 2021, MBIE published updates to the acceptable solutions and verification methods for H1 Energy Efficiency to make new buildings healthier and more energy efficient.
This update was made following a consultation that received more than 700 submissions. In that consultation, we heard changes for insulation requirements were long overdue as New Zealand lagged behind other countries.
In the 2021 consultation 98% of respondents supported the proposal to increase minimum insulation requirements in the acceptable solution and verification method documents used to comply with H1. The feedback was summarised as telling us to “go as far and fast as possible, without breaking anything”.
The final changes were the best balance of upfront cost and long-term energy efficiency at the time. The level of increase to insulation was based on the findings from research studies commissioned by MBIE. The final changes were separated by the type of building (housing, and small buildings versus other larger buildings[1]).
1.1.3. In 2022, MBIE extended the deadlines to transition to the new requirements
In 2022, MBIE heard that there were concerns with the timeframes to implement the new requirements. The unprecedented levels of building activity, product shortages and cost increases within the sector meant there were additional pressures and stresses on our construction workforce.
As such, MBIE consulted on extending the deadlines for transitioning to higher insulation settings. This consultation received 840 submissions. Based on the barriers and issues identified at the time, MBIE decided to extend the transition period for some of the requirements for housing into 2023. This extension allowed the building and construction sector more time to be able to deliver on the changes.
The transition period ended in November 2023 and the changes have now been fully in-place for over one year.
1.1.4. There have been concerns raised following the insulation changes from 2021
In early 2024, concerns were raised about the insulation changes from 2021. These concerns focused on the:
- financial impacts of the changes and the impacts on the cost of construction.
- use of insulation in the warmest parts of the country and whether insulation settings were appropriate or were making houses too hot.
This led to questions whether the changes are still appropriate and whether the benefits exceeded the costs.
As part of MBIE’s role as the building regulator, we continue to actively monitor the implementation of new requirements. It is important that the minimum requirements strike the right balance between the outcomes they can help achieve, such as lower power bills, and the upfront costs they impose onto households and businesses. It is also important to check whether these settings cause unintended consequences, for example if the increased insulation causes dampness issues and overheating.
1.2. MBIE has taken another look at the changes made in 2021
1.2.1. MBIE has identified outcomes that we would like to achieve
The mandatory requirements for H1 in the Building Code regulations require that buildings be provided with adequate levels of insulation to facilitate the efficient use of energy.
For this review, we have identified the following additional outcomes we want to achieve while maintaining adequate energy efficiency in buildings:
- Balancing upfront building costs, and longer-term benefits.
- Removing barriers for designers to optimise insulation for energy efficiency in a building.
- Improving the consistency and certainty of compliance and consenting of buildings in regards to insulation requirements and energy efficiency.
1.2.2. MBIE has engaged with the sector and commissioned further research and cost estimates for providing insulation in new houses
Throughout 2024, MBIE has been reviewing the changes to insulation requirements. In order to do this, we have recently:
- engaged with the sector to better understand their practical experience with the insulation settings since 2021
- commissioned quantity surveyors to provide updated cost estimates for different levels of insulation in housing, which included the previous insulation settings first published in 2008
- commissioned the Building Research Association of New Zealand (BRANZ) to undertake a full cost benefit analysis using updated computer modelling of the temperatures and energy use in new housing
- assessed the risks of overheating, internal moisture and condensation as result of the changes made to insulation in 2021.
1.2.3. What MBIE have heard from key building and construction sector stakeholders
In recent meetings, key building and construction sector stakeholders told us that they generally supported the current H1 settings and expressed the following views:
- Using the calculation or modelling compliance methods usually results in better outcomes compared to the schedule method (see subsection 2.1.1 in the consultation document for explanations of the different compliance methods).
- Any changes should be based on evidence. Assessment of costs and benefits should consider both upfront costs and long-term benefits. This includes energy efficiency improvements, and the health and wellbeing benefits of warmer and drier buildings.
- Industry has made significant investments to meet the current H1 settings. Reversing them is unlikely to reduce upfront costs due to the sunk costs of these investments.
- Insulation does not cause overheating. Overheating is caused by poor design. It would be advantageous for the sector to collectively put more effort into providing education for designers to avoid overheating and internal moisture issues.
- MBIE should also consider updating the Building Code to help to address overheating and internal moisture risks.
1.2.4. Cost-benefit analysis indicates that meeting the current insulation requirements can be cost-effective and beneficial overall
Building Research Association of New Zealand (BRANZ) cost-benefit analysis suggests that meeting the current H1 insulation requirements for housing and small buildings can be cost-effective and beneficial overall. The long-term energy efficiency benefits outweigh the additional upfront costs.
However, the balance between costs and benefits depends on the compliance method that is used. BRANZ’s analysis shows that using the calculation or modelling methods achieves the highest benefit to cost ratio overall. This is because the calculation and modelling methods enable people to adjust the insulation levels of different building elements to optimise a buildings’ overall energy performance in the most cost-effective way.
BRANZ also assessed whether the current H1 insulation requirements are creating overheating and internal moisture risks in housing. The research confirmed that housing overheating is not simply caused by insulation, rather it is a combination of design factors such as sun heat gains during the day, window shading, heat absorption properties of building materials, as well as ventilation and building orientation.
BRANZ’s analysis also shows that the current H1 settings are not increasing internal moisture risks in buildings.
See section 2.6 for more details on BRANZ’s findings on the effects of insulation on overheating and internal moisture risks in housing.
1.2.5. MBIE have developed for proposals for change for housing and small buildings, and for large buildings
We have developed several proposals that aim to achieve the identified outcomes. These proposals are primarily focused on the settings for housing and small buildings in the Acceptable Solution H1/AS1 and Verification Method H1/VM1 – refer Section 2.
However, some of these proposals relate to similar provisions for the insulation settings in large buildings (other than housing). Stakeholders also identified other areas that may cause design complexity leading to unnecessary costs for large building typologies.
To maintain consistency between the documents and approaches, we have included additional proposals to amend Acceptable Solution H1/AS2 and Verification Method H1/VM2. These proposals are specifically for large buildings and are presented separately – refer Section 3.
1.2.6. MBIE wants to hear your feedback and opinions on insulation and energy efficiency
The following sections seek your feedback on specific proposals to change the insulation settings and the ways to demonstrate compliance with H1 through the use of acceptable solutions and verification methods. MBIE welcomes your feedback on these proposals.
[1] These terms are defined within the acceptable solutions and verification methods for H1 Energy efficiency. Housing of any size (including multi-unit apartment buildings) has the same requirements.