Why bad housing design pumps up power prices for everyone

Australia’s homes are notoriously “leaky” – allowing the uncontrolled flow of heat into and out of the building. Our answer has been to put in more and more pumps, in the form of air conditioning. This is often promoted as a feature, rather than an indication of a poor-quality building! This creates problems for everyone. We all know that some houses are hotter than others in heatwaves, and that well insulated and designed homes cost a lot less to operate throughout the year because they don’t rely heavily on air conditioners or heaters to provide comfort. But did you know that relying on air conditioners to stay cool on hot summer days affects the price of electricity for everyone, all year round? Pumping heat from one place to another takes a lot of energy, which makes air conditioners particularly power-hungry appliances. The more leaky the house, the more heat needs to be pumped out. On hot days, when lots of aircon units are operating at the same time, this creates a challenge for the electricity infrastructure. It costs money to build an electricity network that can handle these peaks in demand. This cost is recovered through the electricity unit cost (cents per kilowatt hour). We all pay this cost, in every electricity bill we get; in fact the cost of meeting summer peak demand accounts for about 25% of retail electricity costs. This is more than twice the combined effect of solar feed-in tariffs, the Renewable Energy Target and the erstwhile carbon tax