H1 Insulation Update 2025: Why Energy Modelling is the Best Method

H1 Compliance - Schedule Method is out, Calculation, and Modelling remain - Which is Better? 

The New Zealand Building Code is evolving — and for good reason. In the latest H1 updates just released, the schedule method has been removed as a compliance option for insulation. From now on, new builds must use either the calculation method or the modelling method to demonstrate compliance.

This change might seem technical, but it has big implications for how we design, build, and live in our homes. It’s a clear signal that the era of minimum standards is giving way to a smarter, performance-based approach — and we’re here for it.

Let’s unpack what this change means, why it’s happening, and why we believe energy modelling isn’t just the best way to comply — it’s the best way to build.

Why the Schedule Method Had to Go

The schedule method was simple. Too simple. It allowed builders to pick minimum R-values from a table based on climate zone, and as long as those values were met, the job was done.

But here’s the issue: buildings are complex. Climate isn’t static. And “minimum” often meant just enough to scrape by. The schedule method didn’t account for window orientation, thermal bridging, air leakage, or even basic differences in building design. It was a one-size-fits-all shortcut in a world where tailored performance matters more than ever.

In practice, the schedule method led to poor-performing buildings that looked compliant on paper — but left owners with cold rooms, high power bills, and uncomfortable living conditions. It had to go.

Why the Calculation Method is Better — But Still Flawed

The calculation method was the next step up. It gave designers the ability to "trade off" insulation values in different parts of the building — thicker walls might allow for a thinner roof, or vice versa.

This allowed for more flexibility and, in many cases, better buildings. But it’s still fundamentally a compliance tool. It’s based on simplified formulas and assumptions. It doesn’t simulate actual building behaviour. It can’t predict how a home will perform through a Dunedin winter or a hot Northland summer. It’s an educated guess — better than a blunt schedule, but still just a guess.

Why the Modelling Method is the Future

Enter the modelling method — a complete shift in thinking.

Instead of relying on theoretical trade-offs, the modelling method simulates the real-world performance of a building. It factors in site-specific climate data, solar orientation, shading, ventilation, internal heat gains, and the thermal properties of every component. It allows designers and homeowners to see how the home will actually perform — before it's even built.

That’s game-changing. Instead of compliance by approximation, you're now working with clarity, control, and confidence.

Benefits of the Modelling Method:

• More accurate performance insights

• Tailored designs that balance comfort and efficiency

• Informed decisions about cost vs. performance trade-offs

• Predictable energy bills, not surprises

• Better resale value with data-backed performance

For those aiming high — Passive House, Homestar, or just a healthy, comfortable family home — energy modelling is the only way to make smart, performance-based choices.

What is PHPP and Why Does it Matter?

One of the best-known modelling tools is the Passive House Planning Package (PHPP). This German-developed software is used globally to design ultra-efficient buildings that use up to 90% less energy than typical homes.

At Formance, we’ve worked with designers using PHPP to model high-performance homes all over New Zealand. The results? Exceptional comfort, incredibly low heating costs, and buildings that deliver on their promise — not just in theory, but in real life.

Using PHPP with Formance SIPs makes Passive House performance more accessible than ever. Read our technical bulletin on Passive Houses with Formance and what input values you can use if you're a Passive House Designer.  

The Bottom Line: Compliance is No Longer the Goal — Performance Is

The removal of the schedule method is more than a regulatory tweak — it's a mindset shift. MBIE are pitching this as a way to make homes cheaper to build, and in a way they are right. By taking a more mindful approach to insulation the right levels can be installed in the right place, but the role of airtightness is missing from the conversation. Airtightness is so important, without proper consideration for it, along with mechanical ventilation we still run the risk of mouldy unhealthy homes. Cheaper may be true for compliance, but in the long run could cost building owners much more in remedial work. 

We think the opportunity for better performing homes lies within the push for more airtightness and the inclusion ventilation. Read our article on why airtighness is important. 

They key to balancing building performance, and cost is in thermal modelling, read our article on the surprising benefits of thermal modelling and why you need it on your next home. 

New Zealand is raising the bar for how homes are designed and built. And the message is clear: guesswork isn't good enough anymore. Whether you're an architect, builder, or homeowner, now’s the time to move beyond ticking boxes and start designing homes that truly work.

Formance Structural Insulated Panels already provide an ultra-efficient building envelope. But pair them with performance modelling — and you unlock the full potential of modern building science.

Get in touch for a free assessment of whether SIPs are right for your new home.