Australian households are under immense financial pressure – and rising energy costs are a major reason why.
While policy makers and system planners have focused on ways to produce more energy – such as increasing renewables like solar – they’ve paid less attention to strategies to encourage people to save power.
House insulation – or large squares of bulky materials such as polystyrene and wool that are installed in roof cavities or walls – is one of the most practical ways to curb energy demand.
Insulation acts like a giant blanket for your home, ensuring it retains heat in winter and stays cool in summer. It also helps lower energy demand on the grid at peak times, making it cheaper to integrate renewable energy into the broader network.
However, Australia’s insulation standards have long lagged behind other countries.
Why insulation matters
Insulation limits the transfer of heat between the inside and outside of your house. This process works in both directions, ensuring homes retain warmth in winter and block out heat in summer.
Insulation also reduces the need for heaters and cooling systems, which make up a large share of energy bills. This may also reduce your exposure to harmful gases – such as carbon monoxide, nitrogen dioxide and formaldehyde – that gas heaters may release in large amounts.
How does it relate to energy?
Insulation is an efficient way to reduce energy use, both on a household and network level.
Well-insulated homes use less energy overall. This is because insulation ensures houses stay at a comfortable temperature long after appliances are switched off.
Insulation also helps prevent spikes at peak demand times . These include evenings when many people prepare dinner after coming home from work or school, or hot summer afternoons when people rely on cooling systems.
Households with effective insulation can also install smaller air-conditioner units and batteries. This brings down energy costs, while making it more affordable to switch to electrical appliances.
On a societal level, improving insulation in walls, floors and ceilings is one of the most effective ways to reduce peak energy demand. Research from the Climateworks Centre shows thermal upgrades – such as electrifying heating systems and adding insulation, heavy curtains, shade windows and gap sealing – can help detached houses save between 1.4 and 4.0 kilowatts at peak periods. That’s a reduction of up to 77%.
Curbing peak demand is increasingly important, as Australia faces a surge in electricity demand from data centres , electric vehicles and electric household appliances . If we don’t rein in peak demand, we may over-invest in infrastructure needed to generate all this electricity, as well as the poles and wires used to distribute this power.
By limiting unnecessary investment, we can also lower system costs. A recent report found if an 800‑resident Melbourne community electrified their homes – for example by replacing gas appliances with efficient electric induction cooktops – planned gas network upgrades can be avoided. In fact, researchers found this would save about A$3.3 million, mainly by avoiding the cost of replacing gas pipes.
So, how can we fix it?
Climateworks’ research shows around three million homes must be updated and electrified to meet national emissions targets. This highlights the need for large-scale retrofit programs, stronger minimum rental standards and better installation practices.
However, Australia’s insulation standards are improving, particularly when it comes to newly built homes. Under the Nationwide House Energy Rating Scheme – which assesses a house’s heating and cooling needs out of ten stars – new homes must be designed to a seven-star minimum rating. However, specific requirements vary between jurisdictions.
From July, this scheme is also expanding from new homes to rate established homes , under the Home Energy Rating program. This can provide households with clearer guidance and accredited assessments to help make their existing homes more energy efficient.
State-based programs in Victoria , the Australian Capital Territory and New South Wales also support insulation upgrades.
Alongside government initiatives, the Brotherhood of St Laurence’s Climate Safe Homes pilot helped low-income households make their homes more energy efficient by providing tailored advice, financing and practical assistance.
What you can do
If you’re keen to make your home more energy efficient while cutting your power costs, here are three practical steps you can take.
ask a Home Energy Rating accredited assessor or qualified insulation installer to assess your existing insulation. You should also look out for government rebates or community programs that can help reduce upfront costs
upgrade ceiling insulation by filling any gaps, topping up existing layers or removing old or ineffective insulation
seal any gaps around doors, windows, floors and unused vents to prevent draughts
if you don’t have wall insulation, consider external blow-in options that involve using a specialised blowing machine to spray insulating materials, such as cellulose or fibreglass, into wall or roof cavities.
Insulation is not just a home upgrade. Rather, it is essential infrastructure for a low-emissions future. And it just might shave some dollars off your next power bill.
We would like to acknowledge Victoria Johnson and David Bryant, Brotherhood of St Laurence, for their collaboration and contribution to this article.
