Explains how ZEH and energy efficiency ratings work. Provides detailed information on how to confirm energy-saving performance in rental properties, impacts on utility costs, and the benefits and drawbacks of property selection.
Reviewed by: Nobuyuki MoriPresident, M-Assets Co., Ltd. / Licensed Real Estate Transaction Specialist (Miyagi #018212)
As electricity and gas costs continue to rise, there is a rapidly growing need for rental properties with high energy-saving performance. ZEH (Net Zero Energy House) and energy efficiency ratings are important indicators that directly impact utility costs for rental properties. This guide provides detailed explanations of how ZEH and energy efficiency ratings work, methods to verify them in rental properties, and the actual impacts on utility costs.
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ZEH (pronounced "zecchi") stands for "Net Zero Energy House," a housing concept that enhances building insulation performance and equipment efficiency while utilizing renewable energy such as solar power generation to achieve net-zero or negative annual primary energy consumption.
There are two main types of ZEH certification for rental properties.
ZEH (Single-Family Homes & Multi-Unit Buildings): While standard ZEH is primarily designed for single-family homes, since 2020 a specification called "ZEH-M (ZEH Mansion)" has been established for multi-unit buildings. ZEH-M has different certification levels including "ZEH-M Ready," "Nearly ZEH-M," and "ZEH-M Oriented" depending on certification criteria.
The main characteristics of ZEH properties are as follows:
With the 2022 amendments to the Building Standards Law, indicators showing building energy-saving performance were standardized. The main indicators listed in rental property advertisements and disclosure documents are as follows.
Thermal Insulation Performance Rating (formerly: Thermal Insulation Rating): Building insulation performance is expressed in ratings from 1 to 7. As of 2025, Grade 4 (equivalent to the previous energy-saving standard) becomes the minimum standard for new residential buildings, Grade 5 and above are recommended levels, and Grades 6 and 7 are equivalent to or exceed ZEH standards. Higher numbers indicate superior insulation performance and greater air-conditioning cost savings.
Primary Energy Consumption Rating (Energy Efficiency Rating): An indicator comparing the building's total primary energy consumption against a standard benchmark, classified into Grades 3–6. Grade 6 means a BEI (Building Energy Index—the ratio of primary energy consumption to standard) of 0.8 or below, representing a level that achieves 20% or greater energy savings compared to the standard.
As a reference, the relationship between building age and energy-saving performance:
How much difference does energy efficiency rating and ZEH performance make on utility costs?
According to calculations by the Ministry of Land, Infrastructure, Transport and Tourism, homes with Grade 4 thermal insulation and those with Grade 6 thermal insulation show a difference of approximately 20–40% in annual air-conditioning costs. For a 1-bedroom apartment (approximately 40 square meters), monthly utility cost differences of ¥3,000–¥8,000 can occur.
Actual Cost Comparison (1-Bedroom Apartment, Tokyo, Annual Estimate):
Utility cost differences can amount to ¥20,000–¥60,000 annually, and over 5–10 years of residence, total costs often reverse in favor of the energy-efficient property. Although properties with high energy-saving performance tend to have slightly higher rents, long-term residents may find them cost-advantageous due to utility savings.
To confirm energy-saving performance in rental properties, utilize the following methods.
Disclosure Document and Building Equipment List: Starting April 2025, buildings of a certain size or larger are required to disclose energy-saving performance (Building Energy Conservation Law). For new or recently built properties, the property materials may include the energy efficiency rating and BEI.
Building Permit and Performance Evaluation Documentation: You can confirm the energy efficiency rating by requesting to see copies of the building permit and housing performance evaluation report from the property management company or landlord.
Inspecting Window and Wall Insulation Specifications During Viewing: Even without explicit energy efficiency ratings, you can estimate insulation performance during a property viewing. Check whether multi-pane glass (double-pane or triple-pane), vinyl-framed windows, and Low-E glass are used. Properties with only single-pane glass and aluminum frames likely have poor insulation performance.
ZEH Certification Verification: ZEH-certified properties have certification documents issued by the Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism. If a property advertisement lists "ZEH" or "ZEH-M," request to verify the certification document.
Benefits:
Drawbacks and Considerations:
As energy prices continue to rise and global warming mitigation becomes increasingly important, the value of rental properties with high energy-saving performance will continue to grow. While ZEH and energy efficiency ratings may seem complicated, simply checking key points like "are multi-pane windows used?" and "what is the thermal insulation rating?" is sufficient to discern utility cost differences. Developing the habit of comparing properties based on total cost including both rent and utilities, rather than rent alone, is the first step toward making wise rental choices.
Insulation performance in rental properties directly impacts utility bills, condensation, and room temperature. This guide explains how to assess insulation grades during property viewings, the meaning of ZEH and energy-efficiency ratings, and measures for improving poorly-insulated units — all from a professional perspective.
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