With fast-rising mortgage interest rates, housing sales are slowing around Australia. Vendors will need to do more work to maximise value, and a recent Domain sustainability report highlights energy efficiency as a strengthening driver of higher sales prices for houses and apartments. Smart energy monitoring can help to understand and showcase energy and carbon performance, and to highlight opportunities for buyers and sellers.
MULTIPLE REWARDS OF BEING EFFICIENT WITH ELECTRICITY
One of the great things about a home being energy efficient, as a core sustainability feature, is that it maps strongly to a suite of motivators for would-be real estate buyers: liveability, health and well-being, environmental concern, cost saving … and even the property market perennial, location, location, location!
Astute buyers have long known this to be true, paying significantly more for north-facing homes over south-facing ones to take advantage of prevailing weather, changing seasons and the sun’s trajectory across the sky (in the southern hemisphere, with the reverse being true in the northern hemisphere). Good orientation equals lower energy costs and greater comfort, a win-win for occupants that’s worth paying more to lock in.
Now the findings of the recent 2022 Domain Sustainability in Property Report indicate that more and more people are tuning into energy efficiency as a value-add that justifies paying more for a property. Domain, as reported in related media articles, found the value-add could be as high as $125,000 for houses, up from an average of $78,250 more just three years ago, and $72,750 for the right apartments.
Climate change is changing the equation
With climate impacts from extreme heat and weather now top of mind for many people in Australia and around the world, and power prices surging again, there’s arguably never been a better time to put energy efficiency and wider sustainability factors front and centre in real estate purchasing decisions.
There’s also growing potential for households, and also small businesses, to participate in the energy markets of the near future in multiple ways. These include energy efficiency, but also selling solar back to the electricity grid, and customers micromanaging when they run appliances and use power to help the energy system navigate peak demand and low supply scenarios – both of which can end up imposing high costs on consumers if not remedied.
In energy industry-speak, this latter scenario for customer participation is known as ‘demand response’, and customer-owned energy assets like solar systems and home storage batteries are called ‘distributed energy resources’, or DERs.
Customer energy resources (i.e. your installations and appliances)
Lately, Consumer Energy Australia (ECA), which advocates on behalf of household and small business energy consumers, has been leading a push to rebrand DERs as CERs, which stands for ‘customer energy resources’. The whole energy sector, meanwhile, is being pushed to rethink the role of consumers in the day-to-day challenge of balancing the grid and keeping it reliable and affordable for all, while advancing towards Net Zero carbon emissions for electricity, and catering to a strong electrification trend as household gas supply is phased out and electric vehicles (EVs) are phased in.
All of this adds up to a lot more engagement from energy consumers, which is pretty much everyone, and translation of this enhanced engagement into property markets, with implications for buyers and sellers, agents, financiers, builders and a range of other stakeholders, including social and community housing providers seeking to extend the benefits of the ‘New Energy’ era to their occupants.
As a simple example on the buyer-side, if you are paying millions of dollars for a home, you’ll want to be sure it can accommodate the one, two or more EVs you either already own, or more likely are expecting to buy over the next few years (Australian households on average own 1.8 vehicles each, so that’s a lot of charging in the energy system pipeline).
Renters and landlords can also get smart energy rewards
The impacts of the evolving energy market on the property market also extend to the rental market, with high energy operating costs for households contributing to a poverty trap for tenants; and at the same time smart energy management offering new remote monitoring and control opportunities for landlords, especially in the short-term high-turnover rental space, in which the most famous global brand is AirBNB.
So more value is at stake through energy use, generation and management than ever before, and the Domain report has identified this as a mainstream issue for the property market, and one that is still on the rise.
But there are some key questions: How can a property vendor demonstrate energy performance, and out-performance to the buyers they are trying to attract? And also provide them with data-driven visibility to identify opportunities to further reduce energy costs and greenhouse gas pollution?
A crude way is to share utility bills with buyers, especially for electricity, and also gas if applicable. There are, however, lots of gaps in billing data from the energy companies. Especially for homes with rooftop solar – which is up to nearly a third of all homes in Australia – because utility metering only records solar and is exported to the grid, and even so-called ‘smart meters’ are blind to total on-site generation and self-consumption.
Specialist real-time monitoring and control providers like Wattwatchers support a lot more data and flexibility to understand and share information about your household’s energy characteristics, performance and opportunities for further improvements.
How Wattwatchers is helping
Wattwatchers is monitoring electricity usage, and in many cases solar generation as well, at over 2200 Australian homes through our My Energy Marketplace (MEM) project*, and provides smart energy solutions and ‘energy data as a service’ to the property, finance and energy sectors.
We’re on track to have around 5000 households in our shareable dataset by mid-2023, providing household circuit-level data in real time to drive deep insights into performance and trends, and to support modelling, simulations and predictive analytics.
Longer term, Wattwatchers sees increasing integration and interoperability between smart energy and the kind of smart home technologies outlined here by market research group Parks Associates in the US, increasingly enabled by technology platform developments like the emerging home connectivity standard Matter.
You can watch a future-looking presentation from Wattwatchers’ Chief Innovation Officer Grace Young on YouTube.
The My Energy Marketplace project is receiving funding from ARENA as part of ARENA’s Advancing Renewables Program. The views expressed herein are not necessarily the views of the Australian Government, and the Australian Government does not accept responsibility for any information or advice contained herein.