Energy Efficiency Ratings and Actual Utility Costs—How to Choose Rental Properties Based on ZEH and Insulation Performance

What is an Energy Efficiency Rating?

Japan's buildings have an "energy efficiency rating" standard that measures insulation and energy consumption performance. The "Building Energy Efficiency Performance Standards" revised in 2023 introduced a system that evaluates residential energy consumption performance on a 7-point scale, from ratings 1 through 7.

• •Rating 7: Top tier (ZEH+ equivalent). Utilizing solar power generation and other technologies to significantly reduce annual primary energy consumption
• •Rating 6: ZEH equivalent. High insulation and airtightness performance significantly reduce heating and cooling costs
• •Rating 5: The 2025 energy efficiency standard (new mandatory energy efficiency level)
• •Rating 4: Energy efficiency standards through 2016 (next-generation energy efficiency standard)
• •Rating 3 and below: Old insulation performance equivalent to standards from the 1980s and earlier

As of April 2025, energy efficiency compliance became mandatory for new building permits, so newly constructed properties are generally rating 4 or above. Meanwhile, buildings over 15 years old often have rating 3 or lower insulation performance.

Impact of Energy Efficiency Ratings on Utility Costs

Insulation performance directly affects heating and cooling costs. When comparing residences of the same size, estimated annual heating and cooling cost differences are as follows:

• •1K (~25㎡) with rating 4 equivalent insulation: Heating and cooling costs approximately ¥50,000–70,000 annually
• •1K (~25㎡) with rating 6 equivalent insulation: Heating and cooling costs approximately ¥30,000–40,000 annually
• •1K (~25㎡) with rating 7 equivalent insulation: Heating and cooling costs approximately ¥15,000–25,000 annually

An annual difference of ¥20,000–40,000 equals monthly savings of ¥1,600–3,300. In cold climates like Sendai, winter heating costs tend to run higher, making the difference larger than the urban average. Energy-efficient properties may offer better overall monthly costs when including utilities, even if rent is somewhat higher.

BELS Certification and ZEH—Energy Efficiency Certifications You'll See in Rentals

BELS stands for "Building Energy Efficiency Performance Labeling System" and is a system that objectively evaluates and displays energy efficiency using a 5-star rating scale. Rental properties displaying BELS certification marks in their listings have undergone third-party evaluation of energy efficiency, guaranteeing a certain level of insulation performance.

ZEH, or Zero Energy House, refers to housing that maintains net-zero or negative annual primary energy consumption through enhanced insulation and energy-efficient equipment. Increasingly, rental properties obtain certifications like "ZEH-M (for multi-unit housing)" or "NZEB (Nearly Zero Energy Building)."

Rental properties with BELS or ZEH certification typically have certification marks or energy efficiency ratings clearly listed in their property information, making them useful as filtering criteria when searching for properties.

How to Check Insulation Performance During Viewings

Even without energy efficiency documentation, there are clues to estimate insulation performance during property viewings.

Check the window type: Insulation performance is largely determined by windows. Properties with multi-pane glazing (double or triple-pane glass) or plastic window frames tend to have higher insulation performance. Aluminum frames combined with single-pane glass indicate poor insulation and are prone to condensation.

Check wall thickness and materials: Reinforced concrete (RC) construction has high thermal mass, retaining warmth once heated. In wooden apartment buildings, the quality of insulation installation determines performance.

Presence of 24-hour ventilation systems: Buildings constructed after 2003 are required to have 24-hour ventilation installed. If a heat-exchange ventilation system (total heat exchange type) is in place, heat loss from ventilation is minimized.

Inspect weatherstripping and insulation: Feel around window frames and electrical outlets on walls for cold air infiltration, which indicates poor airtightness. Winter viewings are especially recommended for checking this point.

Comparing Rent and Utilities for Energy-Efficient Rental Properties

Energy-efficient properties with high insulation typically command slightly higher rents, but it's important to assess "real monthly costs" including utility savings and comfort improvements.

Sample calculation (Sendai area, 1K, 25㎡):

This calculation shows the new high-efficiency property is ¥5,000 higher monthly, but the large difference in winter heating costs (December–February) narrows the annual gap. When comfort improvements (no condensation, uniform temperature) are factored in, cost-performance can be comparable.

Using Available Subsidies and Grant Programs

When selecting energy-efficient rentals, also check government and local subsidy programs. The Ministry of Land, Infrastructure, Transport and Tourism's "Housing Energy Efficiency 2026 Campaign" provides subsidies for energy-efficient renovations and high-efficiency equipment installations (though direct tenant access is limited, landlord subsidies indirectly promote property efficiency upgrades).

Miyagi Prefecture and Sendai also operate consultation windows and promotion programs for energy-efficient housing, so check these when considering a move.

In Summary: Using Energy Efficiency Ratings in Your Property Selection

Utilities are a recurring monthly cost, and for long-term residency, energy efficiency is an important selection factor. When searching for properties, check these points:

1. Verify whether energy efficiency ratings or BELS certification are listed in the property information
2. During viewings, confirm window type (multi-pane or single-pane glass)
3. Ask the property manager for past tenants' estimated utility costs
4. Compare properties based on total monthly costs including utilities, not just rent

Energy-efficient rental properties also reduce environmental impact. Use energy efficiency ratings as a key decision-making tool to realize comfortable and economical living.

Learn how to leverage Japan's building energy efficiency labeling system, which began in 2024, when searching for a rental. This guide covers how to read energy efficiency ratings, their impact on utility costs, and key points to check during property viewings.