$25K-plus in extra costs and delays will come with new H1 Energy Efficiency requirements

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The three existing climate zones (above left) and the six new climate zones.


EasyBuild director Mike Fox says the prospect of new, far-reaching H1 Energy Efficiency requirements to be implemented over the next eight months read like a Tui ad — yeah right! But with far more serious consequences.


The new H1 Energy Efficiency requirements are so far reaching and rushed, it risks bringing the industry to an expensive halt.

In late November 2021, with little fanfare or, it seems, understanding of real-world implications, the MBIE announced changes to the minimum thermal performance requirements for compliance with the Building Code Clause H1 Energy Efficiency. Along with E3 and other changes.

Ever since, I’ve been waiting for the media or opposition politicians to pick up on the changes and perhaps investigate what it might mean for the industry and consumers, given the cost implications and delays that will result. It seems they have missed this one big time. 

If you think that hyperinflation, material supply issues, labour shortages and dealing with Covid-19 weren’t already enough for an industry to cope with, wait for the carnage when this trojan horse hits home later this year.

I suspect many within the industry, and certainly consumers, will be naively oblivious to the changes, delays and implications heading their way, sooner than they think.

Significant changes imminent for roofs, windows and floors

The MBIE says the new insulation requirements aim to reduce the energy needed to heat new homes by up to 40% compared to the existing requirements.

However, what about the cooling costs that will be required to bring temperatures down in these super-insulated homes in our temperate climate zones?

They are also silent on the approximately $25,000-plus extra in construction costs and delays that will be imposed on the consumer to achieve this.

In one instance, I heard the extra cost was $125,000 because it involved completely re-engineering the roof structure on a mono-pitched house using long span skillion rafters. That’s nothing short of crazy!

Be prepared for similar scenarios and a massive rush to get projects consented under the old requirements.

These changes come at a time when housing affordability and availability is at its lowest point ever, and really makes you wonder who is driving something so divorced from reality.

It’s no secret that the housing that actually needs upgrading is the existing housing stock in New Zealand. That’s where the low hanging fruit on energy efficiency hangs.

However, little or no effort is made to address existing homes by the regulators. Unless of course you happen to be a landlord, and have been forced to upgrade homes to higher standards.

Home owners lucky enough to have a new home know that they are already living in relatively efficient homes.

Architects, designers, engineers and builders should be warned not to assume that any construction details or methods currently used will comply with the new requirements. Complying with the new regulations will require more than simply adding more insulation.

Designers will also need to look at reducing the thermal bridging effect through the build’s structural framing, including changing systems and doing new calculations.

This is where the cost and unintended consequences of the purist approach will hurt financially.

A number of generic and proprietary solutions that currently comply are unlikely to meet the new requirements. This is especially true where requirements have increased significantly, such as with roofs, windows and concrete flooring systems.

But wait, the news gets better. All this redesign and product change is required to be in place within 11 months of the announcement, by November 2, 2022. Go figure that!

Changes of this magnitude should have been introduced over years, not months. What is the rush? 

Energy efficiency improvements important

Improvements in energy efficiency are important, but must be introduced in a manner that the industry can deliver.

Please, don’t get me wrong, I am all for improvements to the energy efficiency of our built environment.

However, it is important this should be done in a well thought out and timely way, and that it is a New Zealand-specific solution that gives an already struggling industry time to advise, adapt, cope and maintain delivery.

The extreme haste of this introduction and the zealous ideology used to set the measures against European city climates is, I believe, seriously flawed. The consultation process used to anoint these changes was little more than a PR exercise to tick a box to say it had been done.

If there was a cost-benefit analysis prepared, I seriously doubt it would withstand the slightest of scrutiny.

Are these new measures over the top? In mine and many others’ opinions, yes, but it depends on who you’re asking. The purist zealot will say they are not enough, and the naysayer the opposite. The correct answer probably lies sensibly somewhere in the middle.

It appeared to me the outcome was pretty much agreed before the consultation process started and, as many of the key individuals preparing the changes were originally from Europe, it perhaps explains why they were drawn to making such strong European comparisons.

I knew they weren’t listening when I was asked by one of them, “Why can’t it be done here? We have been doing this in Scandinavia for decades”.

My answer was we don’t have a Scandinavian climate — in other words, snow and ice for many months of the year.

It obviously fell on deaf ears. They made condescending noises, but you could tell it was going to be their way come hell or high water.

So, what do the changes mean?

Like most bureaucratic bungles, they have taken what was a pragmatic H1 system and have made it unnecessarily complicated.

It’s a bit like NZS3604, which was a fit- for-purpose builders guide, but is now a document that is so large and complex it has completely lost the intent of its original purpose.

I have looked at the proposed changes and will do my best to summarise in a manner that industry participants will resonate with.

• Climatic zones

The original simple three climatic zones which were three zones in the North Island and one in the South Island have now been turned into a patchwork quilt of six zones across the country — Zones 1-4 in the North Island and Zones 3-6 in the South Island. The greater Wellington region is now split across two zones.

In reality, the difference between the requirements for the respective zones is so minimal it beggars belief as to why they decided to complicate this.

• Roofs

Ceiling insulation requirements move to an R value of R6.6 across all six zones which, in some regions, is double the current setting. I have heard that insulation providers are unlikely to be able to meet the changes and supply within the time frames. In short, expect long delays.

This extra depth insulation is all well with high-pitched conventional trussed roofs and flat ceilings, but any low-pitched or skillion roof construction is going to have to increase depth significantly or be scrapped.

This is where the unintended consequences kick in, and the lack of real engagement with industry is stark. There are many forms of innovative alternate construction methods that are now heavily impacted by these changes.

Was there any thought given to the severe shortage of affordable housing, off-site manufacturing needs, or how long it may take to re-tool a factory to meet these new requirements? Obviously not.

The volume of insulation required to insulate a 200sq m single-level ceiling will now be significant — and likely take more than one delivery from the merchant.

The storage and delivery requirements of this increase will need to be factored in. I see that increasing the carbon footprint of the build, which is in direct contrast to what they’re trying to achieve.

Walls

Walls have been the least affected in this process, with an increase to R2.0 across all zones. This will thankfully still work within traditional 90 x 45 framing, but don’t get complacent.

Thermal bridging, which is the bureaucrats’ latest buzzword, must now also be factored in. So, if you have walls with significant timber, you might find they need more insulation or a thermal break of some sort.

The MBIE initially wanted to significantly boost wall insulation which would have put an end to traditional 90 x 45 framing on external walls unless they are strapped with additional insulation, or increased to 145 x 45 framing or more.

I feel they got spooked when framing suppliers apparently told them they wouldn’t or couldn’t supply the framing. This requirement has been reluctantly pulled back on. However, this will be the next step change so it could pay to be prepared.

• Windows

In short, very few if any standard aluminium frames will comply after November 2, 2022 without enhancements.

To comply in Zones 1 and 2, including Northland, Auckland, Coromandel, Bay of Plenty, Hamilton, East Coast and New Plymouth, until November 2, 2023 you can use standard aluminium frames with argon-filled, double-glazed low E level 4 glass with a thermal spacer between the glass to achieve R0.37.

From then onwards, all windows in Zones 1 and 2 will also require the use of thermally broken aluminium frames, double-glazed with thermal spacer and low E level 3 glass to meet R0.46.

Zones 3 and 4, including Manawatu, Horowhenua, Wellington, Nelson, Marlborough, Chatham Islands, Central Plateau, Wairarapa and the West Coast, must go straight to the R0.46 requirements detailed above from November 2, 2022.

Zones 5 and 6, including Canterbury, Coastal Otago, Inland Otago, Southland and Stewart Island, must go straight to R0.50 from November 2, 2022. To comply with the minimum, you must use a thermally broken aluminium frame, with argon-filled, double-glazed  low E level 4 glass with a thermal spacer between the glass.

With all the above, you can, of course, use uPVC or timber frames which will give much higher R values. But they currently make up only a small percentage of the market.

You can see that the majority of the country has the same settings — R0.46 windows, R 6.6 ceilings, R2.0 walls, R1.5 floors. In fact, the entire North Island’s four zones have the same settings. Hence my comments about the unnecessary complication of six zones.

Be prepared to get your wallet out as the cost and lead times with windows is going to take a massive jump. Some window suites will no longer be able to be used, and window manufacturers will be scrambling to work up suitable replacements.

It can take years to develop new window suites by the time they are tested and, in some cases, patented. So how is this going to happen within the mandated time frames?

For example, face-fixed windows often used in factory installations for ease of installation and speed will no longer comply, and no efficient replacement is currently available.

But, of course, all of this will easily be achievable in the 11 months offered — yeah right! Sort of reads like a Tui ad. But with far more serious consequences.

• Floors:

There are new requirements for slabs of all types and other floors. Slabs will have a minimum requirement of R1.5 in Zones 1-4 (North Island), R1.6 in Zone 5, and R1.7 in Zone 6. Edge insulation and other enhancements are likely a must.

For other types of floors, the requirements are R2.5 in Zones 1-3, R2.8 in Zone 4, and R3.0 in Zones 5 and 6.

Extensive tables are provided within the regulations for determining slab values and compliance. It is definitely not simple, and I haven’t found anyone yet who can pinpoint what this might mean for a standard rib raft slab.

Expect changes, costs and delays while the reality of all this is worked through.

These measures and the haste of their implementation unfortunately represent a complete disconnect between ideology and the realities of what the industry can deliver, and what the consumer can pay for.

At a minimum, the implementation of these should be delayed for 12 to 24 months to allow for the supply chain to adapt and re-tool.

In the pragmatic world many of us live in, these measures would be shelved while the MBIE works with the industry in a constructive and timely manner so the best possible solution can be gained for all. I live in eternal hope but won’t hold my breath.

And I’ll leave you with a reminder to amend your contracts to allow for the recovery of costs due to these changes — they will be significant and unpalatable for many to accept!

• This article contains the author’s opinion only, and is not necessarily the opinion of the Registered Master Builders Association, its chief executive or staff.

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