Everything you ever wanted to know about NABERS rating

The NABERS Rating (National Australian Built Environment Rating System) and systems such as Green Star and GRESB have been established to encourage and reward building owners for cutting carbon emissions and playing their critical part in curbing climate change.

With the built environment being one of the largest contributors to climate change – producing 30-40% of global greenhouse gas emissions, it stands to reason they’d be targeted for significant change by Government environmental bodies.

Below we answer many of the initial questions that you’re likely to have regarding NABERS ratings for buildings, the benefits and most importantly how you can begin to improve a buildings rating. You can skip to a specific question by clicking on it below:

The NABERS rating system explained

What is a NABERS rating?

What are the NABERS rating types?

How do you get a NABERS rating?

How is the NABERS rating calculated?

How can you improve your NABERS rating?

Is NABERS compulsory?

What is a good NABERS rating?

What are the benefits of having a good NABERS rating?

How can I estimate my NABERS rating?

How long does a rating last?

The NABERS rating system explained

NABERS aims to provide a simple, reliable, and comparable sustainability measurement across building sectors such as hotels, shopping centres, apartments, offices, and data centres.

Helping building owners accurately measure, understand, and communicate the environmental performance of buildings, the NABERS system identifies areas for cost savings and future improvements – paving the way for improved financial growth. NABERS claim their customers have saved an average of 30-40% on their energy over 10 years.

The program, which started in Australia in 1998 and expanded to New Zealand in 2012 and the UK in 2020 (they’ve also conducted pilot certifications for buildings in India in 2015, and later Hong Kong and Indonesia in 2017) can also provide that all important competitive factor.

How so? By providing an effective industry benchmarking tool, the system enables building owners to provide potential tenants with independent comparisons to the environmental performance of other similar buildings.

At CIM, we specialise in providing real time access to reliable building information thereby allowing you to make accurate decisions resulting in peak building management performance. These factors are also vital in calculating and optimising your NABERS rating – a process we are skilled and experienced in assisting with.

What is a NABERS rating?

NABERS measures the energy efficiency, water usage, waste management and indoor environment quality of a building or tenancy and its impact on the environment.

Much like the efficiency star ratings that come standard with a new fridge or washing machine, NABERS provides a “star” rating from one to six stars for building efficiency across each of these areas.
As mentioned, this easily digestible rating system helps building owners understand their building’s performance compared to similar buildings – while providing a benchmark for progress and identifying areas for savings and improvements.

NABERS has also partnered with Climate Active to provide a Carbon Neutral certification, another way the program has helped building owners accurately communicate the environmental performance and progress of their buildings to potential tenants.

These ratings are valid for 12 months, the annual model ensuring ratings represent a building or workplace’s current operational performance.

What are the NABERS rating types?

NABERS provides several types of ratings to assess the environmental performance of buildings, including:

NABERS Water

NABERS Water measures the water usage within a building, focusing on conservation and management practices. It helps building owners and managers identify how much water their buildings consume and provides insights into areas where water usage can be reduced, ultimately saving costs and contributing to environmental sustainability.

NABERS Energy

NABERS Energy assesses the energy efficiency of a building and its impact on greenhouse gas emissions. This rating helps to identify the building's energy consumption patterns, benchmark against similar buildings, and find opportunities to reduce energy use and carbon footprint, leading to operational savings and environmental benefits.

NABERS Waste

NABERS Waste evaluates waste management and reduction practices within a building, aiming to improve recycling rates and minimize contributions to landfills. This rating encourages buildings to adopt more sustainable waste management practices, reducing environmental impact and promoting a circular economy.

NABERS Indoor Environment

NABERS Indoor Environment reviews the quality of the indoor environment, focusing on air quality, lighting, temperature, and humidity. This rating is crucial for occupant comfort and health, as it impacts productivity and wellbeing. Buildings with high indoor environment ratings are more attractive to tenants who prioritize employee health and satisfaction.

NABERS Renewable Energy Indicator

The NABERS Renewable Energy Indicator showcases the extent to which a building uses renewable energy in its overall energy consumption. It highlights buildings that are committed to using clean energy sources, reducing reliance on fossil fuels, and supporting the transition to a sustainable energy future.

NABERS Climate Active Carbon Neutral Certification

Buildings that achieve a NABERS Energy rating of 4 stars or above and use carbon offsets to cancel their emissions can obtain the Climate Active Carbon Neutral Certification. This certification recognizes buildings that have achieved carbon neutrality in their operations, demonstrating a commitment to environmental leadership and action against climate change. Buildings can also opt to use renewable energy for their stationary energy consumption instead of carbon offsets, further enhancing their sustainability credentials.

How do you get a NABERS rating?

The short answer is accredited assessors will collect consumption data for your building (think electricity and gas bills) alongside data pertaining to a variety of other building specifics such as size, hours of occupation, climate location and density of occupation.

NABERS assessors are a professional team of sustainability consultants, trained and accredited to perform NABERS ratings. While accredited through the NSW Department of Planning, Industry & Environment (DPIE) who administer the program, they operate independently and are not employed by DPIE.

While there are no formal pre-requisites to attend the training, most assessors have experience in the building services, property or energy management industries.

The process may sound straightforward and set for DIY, however it is quite complex and requires significant preparation. CIM can guide you through the process of what to expect and how to prepare for your NABERS assessment to ensure that you get the best assessment possible.

How is the NABERS rating calculated?

The journey to obtaining a NABERS rating begins with data—lots of it. Here's a step-by-step breakdown of the calculation process:

1. Data Collection: The first step involves gathering detailed information about the building's actual consumption. This includes data on energy usage, water consumption, waste production, and indoor environmental conditions over the past year. For buildings seeking an energy efficiency rating, electricity and gas meter readings play a crucial role.
2. Normalization: To ensure fairness and accuracy, NABERS accounts for factors that can influence a building's performance but are beyond control, such as climate variations, hours of operation, and occupancy levels. By normalizing data, the system allows for an apples-to-apples comparison between buildings of different types, sizes, and locations.
3. Benchmarking: The normalized data is then compared against a benchmark that represents the performance of similar buildings. This benchmarking process is what sets NABERS apart—it enables the rating to reflect how well a building performs relative to its peers, rather than against an arbitrary standard.
4. Rating Scale: NABERS ratings range from 1 to 6 stars. A 1-star rating indicates that a building has considerable room for improvement, while a 6-star rating signifies market-leading performance. The beauty of the NABERS scale is its ability to motivate continuous improvement; even buildings at the higher end of the scale can strive for operational excellence and further environmental benefits.

How can you improve your rating?

We specialise in providing real time access to reliable building information. Buildings are a rich source of data – if you have the systems in place to capture it and put it to work. We have advanced building analytics software that analyses existing building performance, via your building management system, to show where you can make energy efficiency improvements.

Our PEAK Platform software allows you to pinpoint building faults and inefficiencies in real time enabling you to resolve issues quickly and satisfactorily. Ultimately, our platform helps you make accurate decisions resulting in peak building management performance.

PEAK also captures critical NABERS data in real time and continually provides data-driven insights based on the NABERS assessment criteria to help you significantly improve your NABERS ratings. For example, PEAK functions as an HVAC monitoring system, gauging your building's HVAC components in real-time and highlighting faults when they occur.

Our experience speaks for itself. CIM and the Kyko Group were able to increase the NABERS star rating by four stars in three years for their building at 99 Elizabeth Street, Sydney, which for Bill Jenkings, director of the Kyko Group, was an outstanding effort.

“In terms of the quantum reduction in energy consumption, CIM’s PEAK platform has exceeded our expectations,” Jenkings says. “At this site, energy consumption has been reduced by 15%. Our indicative NABERS rating was 1.5 stars on this building and we were targeting 4.5 stars and with CIM’s help, we were able to achieve 5.5 stars.”

Is NABERS compulsory?

The NABERS energy rating system is required for all new buildings over 1,000 square metres and buildings that are up for sale or lease.

Rules and regulations aside, attaining a NABERS rating indicates to your peers that you are serious about reducing carbon dioxide emissions. These emissions are mostly caused by large scale heating, ventilation and air conditioning (HVAC) systems used to maintain building comfort.

NABERS industry standing is in part due to the team behind it. While managed by DPIE, the operation of NABERS is overseen by a national steering committee comprised of all State and Territory representatives, and the Commonwealth Government. These government members have voting rights within the committee.

The NABERS steering committee is also made up of non-voting stakeholder members from bodies representing the wide range of NABERS stakeholders.

What is a good NABERS rating?

The maximum rating a building can achieve is six stars - and this is not easy to achieve. A six-star rating indicates a market leading performance, with half the greenhouse gas emissions or water use of a five-star building. There are currently only 256 buildings in Australia with a six star rating.

Conversely, a one star rating means the building is performing well below average and has lots of scope for improvement. NABERS describes each star ratings as follows:

• One Star: Indicates poor performance, much lower than the average Australian building.
• Two and Three Stars: Represent performance that is below average to average.
• Four Stars: Signifies performance that is above average.
• Five Stars: Denotes excellent performance, well above the average.
• Six Stars: Represents market-leading performance, indicating that a building is among the most efficient and sustainable.

According to the NABERS 2020/21 annual report, more than 70% of NABERS rated buildings are 4 star or above.

What are the benefits of having a good NABERS rating?

There are significant benefits associated with obtaining a high NABERS rating. Here’s an outline of some:

• Increased asset valuation: As energy efficiency is increasingly valued by buyers, a high NABERS rating can enhance the value of your property

• Cost savings: The implementation of energy and water efficiency measures significantly reduces operational costs, as energy-efficient buildings experience lower utility costs and long-term savings.

• Improved tenant satisfaction and retention: A high NABERS rating translates to a comfortable and healthy working environment, which improves tenant satisfaction and productivity. With a positive tenant experience, lease renewals and tenant loyalty are increased.

• Increased marketability: Properties with a high NABERS rating have a competitive edge. A high rating validates your property’s environmental performance, leading to higher occupancy rates, reduced vacancies and increased rental income. These properties are desirable to both tenants and investors.

How can I estimate my NABERS rating?

Keen to see how your building may fare from a NABERS assessment? You can log on and use the NABERS rating calculator to get an indication of how your building or tenancy is performing – though do note this cannot be promoted or published.

The first step is to answer a few basic details such as what type of rating you would like to estimate – the options including water, energy, waste or indoor environment. You can then select from the type of building and its postcode.

Follow the prompts and the NABERS rating calculator will provide an indication to your buildings performance.

Do note while you can use the online 'self-assessment' tool, however, you cannot promote these results - only ratings that have been certified by the NABERS national administrator can be promoted using the NABERS.

How long does a rating last?

A NABERS rating lasts 12 months, however, this doesn’t mean you can’t attain the maximum rating possible. The higher the rating, the more responsible your tenants and your peers will rate you. Attaining the maximum rating possible, should be a priority for your business and building.

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CIM's PEAK Platform is a best-in-class building analytics and property operations software, improving efficiency, sustainability, and tenant comfort across property portfolios. Discover more by watching a demo.