Zero energy and zero carbon homes

Key points

  • Zero energy homes have an energy-efficient thermal shell and appliances, and when combined with renewable energy systems, over a year their total energy production minus their total energy use equals zero.
  • A zero carbon home emits no net carbon dioxide during its operation, and a carbon positive home produces more renewable energy than the home uses, exporting the excess to the grid.
  • Reducing greenhouse gas emissions (such as carbon dioxide) aims to reduce the rate and impact of climate change.
  • The zero carbon definition focuses on carbon emissions resulting from a home’s energy use. It does not include the ‘embodied carbon’ in the building (though this may be offset too).
  • Making a zero energy, zero carbon or carbon positive home means reducing energy demands through good passive design, smart purchases of systems and appliances, and energy-efficient behaviour. It also means using renewable energy sources, either on site or through GreenPower.
  • Buying carbon offsets can also help to make your household carbon neutral. Carbon offsets support activities that avert or absorb carbon (such as growing trees) to offset the carbon your household produces.

Understanding zero energy, zero carbon and carbon positive homes

Zero energy (or net zero energy) homes have an energy-efficient thermal shell and appliances, and when combined with renewable energy systems, over a year their total energy production minus their total energy use equals zero.

Zero carbon homes release no net carbon dioxide into the atmosphere during their operation. This means that over a year, the home’s energy use from carbon-emitting sources, will be equal to the amount of renewable energy it produces.

Carbon positive (sometimes called climate positive) homes move beyond the zero carbon benchmark by making additional ‘positive’ energy contributions. Over a year, they produce more renewable energy on site than the home requires, and feed that excess back into the grid.

By reducing emissions, zero energy, zero carbon and carbon positive homes can play an important part in helping to slow the rate and impact of climate change.

The definition of ‘zero carbon’ focuses on a home’s operational energy use, it does not include the embodied carbon in the building. Embodied carbon results from the production of building materials, their transportation to the site, and the energy used onsite during construction.

A simple diagram using equation-style illustrations, explains the different between zero energy,  zero carbon and energy positive, carbon positive homes.

By offsetting energy use with energy production, zero carbon and carbon positive homes can reduce greenhouse gas emissions
Source: Felicity Woodhams, adapted from Scott Dwyer.

The key to making a home zero energy, zero carbon or carbon positive is to minimise energy demand first, and then use renewable energy sources to meet the remaining demand. The main components are:

  • improving energy efficiency with more efficient building design
  • reducing energy use by using more efficient systems and appliances, and changing occupant behaviour
  • using renewable energy sources, either by installing a system to generate your own renewable energy, or by buying GreenPower from the electricity grid.

In general, living in a zero energy and zero carbon home means that the efficiencies and renewable energy generation are achieved on site. However, you can still aim for affordable zero carbon living in a home that is unable to be altered (for example, a rental or heritage listed property) by buying GreenPower or purchasing carbon offsets. Carbon offsets may also be used to offset the home’s embodied carbon.

Carbon offsetting is where an action is taken to remove the same amount of carbon dioxide (CO2) from the atmosphere as another action puts in; for example:

1 tonne of CO2 emitted each year from burning fossil fuels to generate electricity + 1 tonne of CO2 absorbed by trees planted = net zero CO2 emissions



Many carbon offset schemes are available that can offset the emissions from our homes and lifestyles. Choose a scheme that guarantees permanent or long-term carbon dioxide sequestration and creates local social and economic benefits.

Achieving a zero energy, zero carbon or carbon positive home

Setting targets

The best way to achieve a zero energy or zero carbon home is to start with smaller goals, set targets, and monitor your progress over time. To set your first target:

  1. Calculate your current household energy use based on 12 months of energy bills
  2. Use a carbon calculator to establish a reduction target (you can find free carbon neutral calculators online).
  3. Adjust the figures to reflect likely efficiencies in your new home or after upgrades or renovations.

Having a Nationwide House Energy Rating Scheme (NatHERS) assessment undertaken for your home is a useful way to benchmark performance and find options for energy upgrades. An experienced assessor will help you identify priority actions to help improve the thermal performance of your home (refer to Building rating tools for more information).

To achieve zero carbon, your offset target should be equal to the total carbon emissions from energy used to operate your home. But you can take several steps to get there, setting larger and larger targets as your budget allows.

Home design

Your zero energy or zero carbon home will need to be designed to suit your location, including your local climate and the site itself. Basic principles for designing zero energy or zero carbon homes include:

Always consider ways to reduce energy demand first, before installing a renewable energy system such as solar photovoltaic (PV). Maximising the energy efficiency of your home and appliances will significantly reduce the amount of renewable energy you will need to generate to meet your needs. Doing this improves the feasibility of solar PV:

  • economically, because your home will require a smaller-capacity system which is cheaper to buy
  • physically, because the size of the solar photovoltaic system and the roof surface area required to fit it will be smaller
  • environmentally, because fewer resources will be needed to manufacture system components and be managed at end of life.

Reduced house size

Minimise the size of your home without loss of function through smarter design. This is one of the most cost-effective steps in achieving zero energy and zero carbon. For example, around 40% of the average Australian household’s energy use and greenhouse gas emissions are from heating or cooling.


The amount of heating and cooling your home needs is proportional to the floor area. Your total household energy consumption decreases by up to 3% for every 10% decrease in conditioned floor area (refer to Heating and cooling for more information).

Thermal efficiency

Consider how to improve the thermal efficiency of your home when building, renovating, or buying:

A photograph of a modern home with an outdoor timber deck features louvre-style horizontal blinds incorporated into roofing which extends over the deck. The blinds can be opened or closed, adjusting to provide shade or light through depending on the season and weather.

Good orientation and smart external shading can make a big difference to the thermal efficiency of your home

Photo: Simon Wood Photography

Appliance efficiency

Look for energy efficiency in all areas of your home:

A photogrpah of a panel of parallel tubes which are set at an angle of about 70 degrees to the roof. The tubes absorb energy from the sun to heat water.

Solar hot water services absorb renewable energy from the sun to heat water

Photo: Nic Granleese

Renewable energy generation

To be zero energy, zero carbon or carbon positive, consider installing on-site renewable energy generation, such as:

  • solar hot water
  • solar PV system
  • heat pump hot water system.

It is a good idea to first increase the efficiency of your home and reduce the amount of energy you use. This will then reduce the size (and therefore cost) of the system you need. Minimising your peak energy demand is also an important aim, as this reduces the required capacity of your on-site renewable energy and storage, meaning you can install smaller and less expensive systems.

For more information on choosing renewable energy systems, and system design and sizing, refer to Renewable energy and Photovoltaic systems.

New energy retailing models are emerging that seek to support peer-to-peer (P2P) energy trading, shared ownership of PV and battery systems, and other options to increase access to renewable energy. This aims to make it easier to share excess renewable electricity that is generated on site between different households.

If it is not feasible for you to install your own system, GreenPower can be a simple, cost-effective way for householders (particularly tenants) to reduce or eliminate their carbon footprint. Using grid electricity from accredited GreenPower providers helps drive consumer demand for the construction of large-scale renewable energy generation such as wind, solar thermal and biomass.

A photograph of the roof of a modern home which features solar panels.

Australia is a world leader in household solar PV installations

Photo: Getty Images

Case study: costs and benefits of zero carbon

A study in 2019 by the Cooperative Research Centre for Low Carbon Living, identified the financial costs and benefits of upgrading typical display home designs in Canberra, Melbourne, Perth, and Townsville, and upgrading them to a net zero energy standard. Doing this added between 6 and 11% to construction costs, but reduced annual energy costs by around 88%, around $1,750 per year. Most major efficiency gains came from the additional insulation, increased shading, glazing upgrades, and energy-efficient appliances, such as induction cook tops and air source heat pumps, with only a small 3 to 4KW photovoltaic (PV) system required. The research shows net zero energy (which is the same as zero energy or zero carbon as defined earlier in this chapter) housing can be a reality for all, when homebuyers negotiate with their builder about energy-efficiency upgrades.

A 4-part video series follows the journey of building net zero energy display homes and mainstreaming these practices in the building industry refer to References and additional reading for more information.

The SJD Homes Z-Range display home in Officer, Victoria was designed to run exclusively on electricity, with energy consumption fully offset by renewable energy generated on-site

Net zero energy display homes give new homebuyers ideas for sustainable home upgrades

Photo: The Zenith by SJD Homes (© SJD Homes)


Changes to your behaviour can reduce your energy use and help you to achieve zero energy and/or zero carbon homes. It can also move beyond the home to a zero carbon lifestyle:

  • Turn your thermostat up a few degrees in summer and down a few degrees in winter to reduce your heating and cooling costs by around 20%.
  • Actively operate your home to improve thermal comfort and reduce energy use. 
    • Open windows at night and on cooler days in summer.
    • Close doors to create a heating zone in winter and do not heat unused rooms.
    • Draw curtains at night in winter to keep the heat in.
    • Operate or erect external shading in summer, retract or remove it in winter.
  • Save water and the energy used to heat the water by replacing showerheads and taps with water-efficient models, taking shorter showers, washing clothes in cold water, and leaving mixer taps in the cold position.
  • When replacing appliances, buy energy-efficient models. Turn off lights when you leave the room, and switch off appliances and equipment at the plug when not in use.
  • Switch to low-carbon transport options like walking, cycling or public transport. Consider car share options; if replacing your car, consider an electric vehicle you can charge with renewable electricity. An e-bike may be an alternative to a second car.
  • Consider the greenhouse gases arising from the products you purchase, consume, and dispose.
    • Compost food and garden wastes to reduce the production of greenhouse gases such as methane in landfill.
    • Grow some of your own food and incorporate more plant-based foods in your diet.
    • Purchase food, products, and other services that have not been highly processed, transported long distances, kept in storage and overpackaged.
    • Minimise waste from packaging and materials — ‘refuse, reduce, reuse, recycle’.
    • Reduce the purchase of non-essential products. Buy only durable, quality goods you really need from certified sustainable (for example, Good Environmental Choice Australia) and socially preferred (for example, Fairtrade) sources.

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Growing food at home can lower the transport emissions of the food your family eats

Photo: Getty Images

Monitor and manage

Monitor your energy consumption to identify any areas where further efficiencies can be gained. In particular, monitor changes in energy consumption after replacement of major appliances with more efficient ones, or before selecting or changing your solar PV system.

Monitoring and controlling your energy use can also help to minimise the need for imported grid electricity by matching the times when you consume electricity (for example, when you switch on your reverse-cycle air-conditioner) with the times when you generate electricity (for example, when your solar PV system is capturing the most energy from the sun). PV systems now come with detailed monitoring capabilities that help you get the best from your system, including helping you to identify any emerging faults.

Home appliances and equipment can be controlled automatically and remotely as part of a ‘connected home’ or ‘smart home’. Connected home devices can also provide advice to help you optimise their energy use, improve comfort, and identify faulty or inefficient equipment.

References and additional reading

Learn more

  • Read Embodied energy to see what to consider if you want to offset the embodied carbon of your home 
  • Explore Renovations and additions to discover how to make your existing home more energy-efficient
  • Visit Designing a home for ideas on designing an energy-efficient home
  • Refer to Renewable energy for advice on choosing and installing a renewable energy system for your home


Original author: Jodie Pipkorn

Updated: Chris Reardon 2013, Scott Dwyer 2020