BASIX Cost benefit analysis summary

Since 2004, BASIX has influenced the design and construction of over 150,000 new dwellings. In 2009 the Department of Planning & Environment (then the Department of Planning) commissioned an independent economic evaluation of the program's performance, and its expected future benefits to 2050.

The BASIX Post-Implementation Cost-Benefit Analysis was based on seven case studies determined from actual BASIX certificates in different locations across NSW. It concluded that BASIX has and will continue to reduce water consumption and greenhouse emissions across New South Wales, and delivers substantial economic benefits to BASIX-compliant households and the State.

BASIX saves New South Wales money

The analysis estimated that to 2050, new BASIX certified dwellings will generate a positive benefit to New South Wales of between $1.20 and $1.60 for every dollar spent complying with BASIX, most of which accrues directly to individual householders through lower energy and water bills. To 2050, the total net benefits (minus compliance and administration costs) of BASIX for NSW are estimated to lie within a range of $294 million to $1.1 billion. Forty-six per cent of these benefits will be from BASIX certified dwellings already approved for development. This amounts to an average saving for NSW of between $6.7 million and $25 million a year in lower household bills, emission reductions and avoided electricity network augmentation. The estimated range of benefits is quite broad. This is due to the uncertainty surrounding energy uses attributed to factors outside the scope of BASIX commitments, especially the increasing number, use and energy requirements of portable household appliances, particularly televisions and computers, and the variable energy use behaviour of heating and cooling systems. The graph to the right shows that household electricity bill savings were the chief source of net benefits to NSW.

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Household benefits and costs

The cost for a dwelling to comply with BASIX ranges from between $1,114 (for a Sydney high rise unit) and $21,902 (for a single detached house in the Southern Highlands with no gas). The compliance cost for an average Sydney Western Suburbs house was estimated at $6,417. The total per dwelling benefits expected to accrue to households is estimated at between $3,273 (for a Sydney high-rise unit) and $14,661 (for a large Sydney house relying on solar power to pass BASIX) to 2050.

The following graph shows that with access to reticulated gas, most dwelling types can expect to have their investment returned through energy and water bill savings (see full report for details of non-gas and large house case studies).

Untitled-13Costs and benefits of BASIX compliance to 2050 

Key findings

Large houses are at a significant disadvantage in BASIX due to their high energy and water consumption, with a large 400m2 house in Sydney estimated to cost over 2½ times that of an average Sydney house (240m2) to meet the same BASIX water and energy targets.

Substituting electricity with gas fuel sources is the most cost-effective approach to meet BASIX energy targets. Access to gas reduces BASIX compliance costs by around 40 per cent for new houses and between 85 per cent and over 300 per cent for new units.

  • BASIX compliance costs are lower for unit dwelling types, which have lower energy targets and are able to distribute costs over a greater number of dwellings.
  • The higher single dwelling compliance costs reflect the added cost of individual rainwater tanks included by most single dwellings to satisfy the BASIX water reduction target.
  • Compliance costs outside of Sydney are higher due to greater installation costs, lack of reticulated gas access and climate variables often requiring greater system efficiencies (such as thicker insulation in colder regions). 
  • Costs of compliance for units are slightly higher than estimates made when BASIX was first introduced in 2004. This reflects a wider investment in system and fixture efficiency to meet improved energy, thermal comfort and water targets, as well as an improved understanding of compliance pathways in multi-dwelling developments. 
  • The BASIX scheme promotes innovation in the design of water and energy efficient technologies and practices, and assists in the further growth and development of these industries in New South Wales. 
  • The cost for reducing one tonne of carbon emissions through the BASIX scheme is $0, as the households are generally better off through lower bills that offset the costs involved. 

Future improvements

  • The report's findings indicate that there is a clear need to obtain an improved understanding of the impact of BASIX and other energy efficiency initiatives upon household energy use. 
  • In order to maximise its effectiveness, BASIX should be continuously updated to ensure new energy and water efficiency innovations are taken into account.

    The BASIX Post-Implementation Cost-Benefit Analysis was conducted by NERA Economic Consulting and BMT Quantity Surveyors.
    BASIX® is a registered trademark of the Crown acting through the NSW Department of Planning & Environment.

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