What Is a NATHERS Rating and Why It Matters for Your Power Bill

If you have read any new home contract in NSW since 2024 you have seen the phrase NATHERS rating. Most homeowners do not know what it actually means or why it matters. Here is the plain English version.

What NATHERS rates

NATHERS measures one thing: the thermal performance of the home shell. That is, how well the walls, roof, floor, windows, doors and air sealing retain warmth in winter and reject heat in summer. It does not rate appliances, solar panels, lighting, or hot water systems. Those are separate from NATHERS.

The rating is calculated by accredited software that takes your floor plan, orientation, glazing schedule, insulation values, and the local climate, then runs a simulation of how much energy the home needs to maintain a comfortable internal temperature year-round.

The star scale

• 0 stars: No thermal performance. Open structure with no walls.
• 3 stars: Typical 1970s Australian home. Single brick, no insulation, single glazing.
• 5 stars: Pre-2010 new homes. Some insulation, basic glazing.
• 6 stars: 2010 to 2022 standard NSW new home minimum.
• 7 stars: Post-2022 NCC standard. 2024 BASIX target for most NSW new homes.
• 8 stars: Above-code performance. Achievable with care but not common in production homes.
• 9 stars: Near zero-energy. Premium custom builds only.
• 10 stars: Theoretical. No energy needed for thermal comfort.

What the difference actually costs

For a 200 sqm 4-bedroom home in Western Sydney, the annual heating and cooling energy required:

• 5 stars: approximately 11,500 kWh per year
• 6 stars: approximately 9,200 kWh per year
• 7 stars: approximately 7,400 kWh per year
• 8 stars: approximately 5,800 kWh per year

At average 2024 NSW electricity rates of around 32 cents per kWh, that translates to:

• 5 stars: $3,680 per year heating and cooling
• 7 stars: $2,370 per year
• 8 stars: $1,855 per year

Going from a 5-star older home to a 7-star new build saves $1,310 per year. Over 30 years (at flat rates, no inflation): $39,300. With realistic 4 percent annual energy cost inflation, the 30-year saving exceeds $70,000.

What drives NATHERS rating

• Orientation: North-facing main living rooms with northern glazing can pick up 0.5 to 1 star at zero cost.
• Insulation: R5.0 ceiling, R2.5 walls, R2.5 floor insulation is the 7-star baseline in Western Sydney.
• Glazing: Double glazing improves the rating significantly. Low-e coating and thermally broken frames push higher.
• Eaves: 600mm eaves on north windows help summer shading.
• External colour: Light roof and external walls reduce summer thermal gain.
• Air sealing: Reduces infiltration losses. Critical above 7 stars.
• Thermal mass: Internal concrete slab and brick walls absorb heat during the day, release it at night, smoothing temperature swings.

What does not affect NATHERS

• Appliances and how efficient they are
• Whether you have solar panels
• Hot water system type
• Lighting (LED vs halogen)
• How you use the home (closed doors, fan use, etc)

These all affect your actual energy bill, but they do not change the NATHERS rating. NATHERS is about the building’s inherent thermal performance.

Reading your NATHERS certificate

When you receive your NATHERS certificate at construction certificate stage, check:

• The star rating (top of document)
• The annual heating and cooling load in MJ/sqm/year
• The orientation assumed (matches your block)
• The glazing schedule (what was assumed for each window)
• The insulation values (what was assumed in walls, ceiling, floor)

If the build does not match these assumptions, the rating is invalid and you will not get the thermal performance promised.