How you can be part of the future of energy use in thousands of homes

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This post is brought to you by Sustainability Victoria, which is inviting Expressions of Interest from potential new owners of FirstRate5. The software provides energy ratings on Australian homes, and currently has annual revenue of approximately $1.25 million.

Australian homes built with a high energy rating, as you would expect, keep the heat in and the cold out and also save their owners a lot on power bills.

But they have another benefit that’s harder to predict – they are cheaper to build.

A study by Australia’s peak science body, the CSIRO, found houses with a five star or higher energy rating used up to 50% less power in winter, depending on the city.

On top of that, high energy rated houses are less costly to build with average savings of $7,500 in Brisbane, $5,500 in Adelaide and $5,000 in Melbourne. Other benefits include lower greenhouse gas emissions – about 7% less than a home with a lower energy rating.

Just simple measures included in the standard, such as better sealing on windows and doors, also reduces the need to keep re-cooling or re-heating homes because of air leaks.

The study, The Evaluation of the 5-Star Energy Efficiency Standard for Residential Buildings, was the first to tackle the question of ratings and exactly what that means to households and whether new five star plus ratings have actually reduced heating and cooling energy costs.

The CSIRO found 414 volunteers who allowed their homes to be tested to see exactly what having a high energy rated home means.

New homes in Australia, depending on their state, now have to be rated 5 or 6 stars under the Nationwide House Energy Rating Scheme. The previous standard was 3.5 to 4 stars.

With the benefits clear, the next problem is how to rate new homes to get to the new standards.

What does it take to reach that level and create an energy efficient home, and how do you prove the design does what it says on the packet and meets regulations?

A piece of software, created and owned by state government agency Sustainability Victoria, has emerged as the standard in creating energy efficient homes across Australia.

It has quietly influenced how, and with what materials, thousands of homes have been built in Australia over two decades.

It’s called FirstRate5 and it’s used to create an energy rating certificate which can be submitted with a development application, showing the local government authority that the new home conforms to energy building regulations.

The first version the software was created in the 1990s when there were no mandatory standards for energy efficiency. The software was distributed via disk and was purchased for a fee.

However, 12 months ago the model changed. The software comes as a free online download. The fee comes in only when a designer wanted an energy rating certificate: $20 for a new home and $10 for a renovation.

There are now 2,600 registered users of the software with about 59,000 certificates being generated over the last 12 months.


And about 97% of all new homes built in Victoria, and about 40% across Australia, have a certificate generated by the software. It underpins energy rating regulations.

Making homes more energy efficient was entirely voluntary when the software was first released.

Over the years, the software was rewritten, new interfaces added, calculations changed. Very little of the original code is left.

And a whole industry has built up, as regulations were written for building standards and energy ratings, around the software to service builders and designers.
A designer will send drawings to an energy rater who then uses the software to build a simulation using weather data for the local climate where the house will be built.

This tests how energy efficient a house will be during the heat of summer and the cold of winter, using temperature variants for the local area. If they want to generate a certificate for a development application, they upload a file through a web interface and run a simulation on the server. A certificate is then generated, giving an energy rating from one through ten stars, and hopefully a five or higher, depending on the local state regulations.

Since the business model was changed about a year ago, from selling CDs to free downloads and a charge for certificates, the current annual revenue is approximately $1.25 million.

There is significant potential for the new owner to grow market share, and enormous opportunity to add additional revenue from new streams.

For anyone interested in the sale of FirstRate5, further information is available from the Vic Tenders Website.

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