2.3. Topic 1: The schedule method may lead to higher upfront costs and less cost-effective construction than the more flexible calculation and modelling methods
Discussion topic on whether the schedule method may lead to higher upfront costs and less cost-effective construction than the more flexible calculation and modelling methods.
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2.3.1. Reasons for the change
Because of its simplicity, the schedule method has historically proven the most popular. Using this compliance method, designers do not need to consider what insulation levels (R-values) are most appropriate and cost-effective for the various elements of a particular building.
Designers can simply specify constructions that achieve the prescribed minimum R-values. Building Consent Authorities can easily check if a building complies by comparing the specified construction R-values against the schedule method R-values. This provides a high degree of certainty whether a proposed building design complies.
Whilst the simplicity and certainty provide a strong incentive for designers to use the schedule method, this generally comes at the expense of higher building costs ultimately faced by households and businesses, with potential negative impacts on the affordability of new housing.
Recent BRANZ analysis[1] commissioned by MBIE found that there is a strong economic case for using the calculation or modelling methods instead of the schedule method. These methods provide flexibility that enables the use of different, often lower insulation levels (R-values) than the schedule method. This helps reduce upfront building costs and improves the overall cost-effectiveness of the insulation in a building.
2.3.2. Proposed change: Remove the schedule method
The proposed change includes removing the schedule method, leaving the calculation and modelling methods as compliance pathways. This proposed change involves amendments to Acceptable Solution H1/AS1 Energy Efficiency for all housing, and buildings up to 300m2. For more details of the proposed wording in H1/AS1, please refer to Appendix A.
Appendix A: Proposed changes to Acceptable Solution H1/AS1 [PDF, 4.4 MB]
2.3.3. Analysis of the proposed change
The primary objective of this proposal is to reduce upfront building costs and improve the cost-effectiveness of the insulation required for achieving Objective H1.1 of the Building Code, Functional requirement H1.2(a) and Performance H1.3.1(a).
MBIE considers that removing the schedule method will best achieve this objective by better encouraging building designers to optimise insulation levels for each building they are designing. Removing the schedule method will increase the use of the remaining calculation and modelling methods.
Compared to the schedule method, the calculation and modelling methods enable significant reductions in upfront building costs from optimised insulation levels tailored to the individual building, whilst still achieving ‘adequate thermal resistance’ as required by Building Code clause H1.3.1(a).
Designers can already choose to use the calculation and modelling methods instead of the schedule method. However, designers do not directly benefit from the reductions in building costs achievable with the other compliance methods. The familiarity, simplicity and certainty offered by the schedule method acts as a disincentive for designers to use other compliance methods.
User-friendly online tools[2] have made the calculation method more accessible, easy to use, and only require a negligible amount of additional technical capability and work by the designer compared to the schedule method. Recent sector feedback indicates that designers have already started adopting the calculation method more, instead of the schedule method.
The modelling method has to date been the least commonly used method as it requires specialist computer modelling skills, access to relevant building modelling tools or software and takes more time than the other two methods.
MBIE expects that the impacts of removing the schedule method include:
- Lower upfront building costs
- Removing the schedule method will encourage designers to optimise their insulation solution for each building, reducing upfront costs while maintaining compliance.
- For a sample single or double storey house, BRANZ’s analysis identified upfront cost savings of $3,712 to $9,565 when using the calculation method, and $2,318 to $15,071 when using the modelling method. This could have positive impacts on the affordability of new housing and small buildings.
- Higher energy usage (running costs and carbon emissions)
- Higher energy usage for heating and cooling in new housing and small buildings. This is because the calculation and modelling methods oftentimes enable compliance with less insulation than the schedule method[3].
- However, the estimated costs from additional energy use by using the calculation or modelling methods instead of the schedule method are relatively modest in comparison to the savings in build costs. For a sample single or double storey house, BRANZ’s analysis estimates additional annual household energy costs of $53 to $236 when using the calculation method, and $27 to $351 when using the modelling method.
- More work for designers and Building Consent Authorities when establishing compliance
- The removal of the schedule method will require designers to calculate or model the insulation required.
- However, where designers use the calculation method via one of the available user-friendly online tools and enclose a copy of the output with their building consent application, the additional work required compared to the schedule method is negligible.
- Upskilling required by the industry
- Removing the schedule method may feel like a big step for some designers and MBIE would work with the industry to support this transition and help designers become competent with the use of the calculation method, including the use of existing free online tools[4].
- More innovation
- Removing the schedule method could encourage innovation within the industry as practitioners explore new ways of achieving compliance. This could lead to increased development and uptake of innovative products, technologies or design methods that improve building performance.
On balance, MBIE considers that the benefits of removing the schedule method outweigh the costs.
2.3.4. Other options MBIE considered
As part of the analysis, we also considered other options that were not further pursued on the basis that the proposed option was considered to address the issue more effectively.
These discounted options included:
- Reverting the R-value settings back to the previous fourth editions of H1/AS1 and VM1 that were in effect between 2008 and 2022:
A recent cost-benefit analysis commissioned by MBIE found that reverting insulation requirements back to the previous settings is uneconomic.[5]
- Reducing the minimum R-values of the schedule method:
This option would not achieve our objective because recent BRANZ analysis[6] found that there is no single simple answer on what R-value settings provide the best balance between upfront building costs and long-term benefits.This is because it depends on a building’s design, and there are also significant variations in material costs depending on suppliers and other factors.
Only adjusting the schedule method R-values could also lead to unintended inconsistencies in required performance between the compliance methods.This is because the schedule method minimum R-values are used as the benchmark in the calculation and modelling methods.
Whilst R-value reductions could be made consistently for all three compliance methods, this could enable unintended reductions in insulation levels of new homes and buildings. For some buildings the current modelling method already enables reducing insulation to less than what was commonly used under the previous fourth editions of H1/AS1 and VM1.
- Providing multiple combinations of R-values for the roof, walls, windows and floor in the schedule method that designers could choose from:
Currently the schedule method only provides one combination for each climate zone. MBIE considers this option less practicable and effective than the proposed removal of the schedule method. This is because the most cost-effective combination of insulation for achieving compliance depends on many factors, including the material supply and labour costs applicable to a particular building, a building’s shape and size of glazing areas.
Using the calculation or modelling methods was identified as being more effective for providing the flexibility to optimise insulation, at no significant additional effort for designers and Building Consent Authorities when existing user-friendly tools for the calculation method are used.
- Increasing awareness and providing education for building designers about other compliance methods:
Given that the calculation and modelling methods have been available for over twenty years MBIE does not consider a lack of awareness of the other compliance methods to be a current barrier. Whilst additional education would help some designers switch away from the schedule method, the proposed option is considered to be more effective.
MBIE have determined that the proposed approach of amending Acceptable Solution H1/AS1 to remove the schedule method is the most reasonable and effective option for achieving the objective of reducing upfront building costs and improving the cost-effectiveness of the insulation required for achieving ‘adequate thermal resistance’ as required by Building Code clause H1.3.1(a).
2.3.5. Questions for the consultation Topic 1
1-1 Do you support amending Acceptable Solution H1/AS1 as proposed to remove the schedule method?
- Yes, I support it.
- Yes, with changes
- No, I don’t support it.
- Not sure/no preference.
1-2. Please explain your views.
[1] Sullivan, J., Curtis, M., McNeil, S., Burgess, J. & MacGregor, C. (2024). Technical analysis of New Zealand Building Code energy efficiency clause H1 settings for residential buildings. BRANZ Ltd.
[2] Free tools that have implemented the calculation method include the New Zealand Green Building Council’s H1 Calculator and BRANZ’s H1 Calculation method tool.
[3] At least where a proposed building’s glazing area is less than 30% of its total wall area. BRANZ’ analysis of building consent data of a sample of new detached homes found that only around 10% had glazing areas greater than this.
[4] Free tools that have implemented the calculation method include the New Zealand Green Building Council’s H1 Calculator and BRANZ’s H1 Calculation method tool.
[5] Sullivan, J., Curtis, M., McNeil, S., Burgess, J. & MacGregor, C. (2024). Technical analysis of New Zealand Building Code energy efficiency clause H1 settings for residential buildings. BRANZ Ltd.
[6] ibid
Footnotes
[1] Sullivan, J., Curtis, M., McNeil, S., Burgess, J. & MacGregor, C. (2024). Technical analysis of New Zealand Building Code energy efficiency clause H1 settings for residential buildings. BRANZ Ltd.
[2] Free tools that have implemented the calculation method include the New Zealand Green Building Council’s H1 Calculator(external link) and BRANZ’s H1 Calculation method tool(external link)
[3]At least where a proposed building’s glazing area is less than 30% of its total wall area. BRANZ’ analysis of building consent data of a sample of new detached homes found that only around 10% had glazing areas greater than this.
[4] Free tools that have implemented the calculation method include the New Zealand Green Building Council’s H1 Calculator(external link) and BRANZ’s H1 Calculation method tool(external link)
[5] Sullivan, J., Curtis, M., McNeil, S., Burgess, J. & MacGregor, C. (2024). Technical analysis of New Zealand Building Code energy efficiency clause H1 settings for residential buildings. BRANZ Ltd.
[6] ibid