H1 Compliance for Commercial Buildings: What Changes in November 2026
From 27 November 2026, commercial buildings over 300 m² in New Zealand must show H1 energy efficiency compliance using the second editions of H1/AS2 or H1/VM2. The old schedule method is gone, so it's the calculation method or the modelling method.
For most commercial projects, the modelling method is where the real cost savings are.
If you're an architect, project manager or facility manager with a commercial or mixed-use project heading for consent, here's what's changed, which path suits your building, and how to avoid paying for insulation you don't need.
Which H1 documents apply to commercial buildings?
H1/AS2 and H1/VM2 apply to buildings other than housing with more than 300 m² of occupied floor area. Smaller buildings and all housing use H1/AS1 or H1/VM1 instead.
Building | Acceptable Solution | Verification Method |
Housing (any size), and other buildings up to 300 m² | H1/AS1 (calculation method) | H1/VM1 (modelling method) |
Commercial and other non-housing buildings over 300 m² | H1/AS2 (calculation method) | H1/VM2 (modelling method) |
HVAC systems in commercial buildings | Not covered by H1/AS2 | H1/VM3 |
From 27 November 2026, the previous editions can no longer be used to demonstrate compliance. Source: MBIE H1 acceptable solutions and verification methods.
What's changed in H1/AS2 second edition?
The biggest change is that the schedule method has been removed. You can no longer just look up a table of minimum R-values and build to it. MBIE also made the calculation method more flexible:
Construction R-values can now be traded off across all the thermal envelope elements.
Minimum construction R-values for roofs and floors have been removed.
Mixed-use buildings can be treated as a single thermal envelope or as several.
Insulation R-values are now taken from the Building Product Specifications.
Full details are in H1/AS2 Second Edition.
We know losing the schedule method is a bit of a faff for some people. But we honestly think it will save the industry a lot of money. The schedule method pushed people towards over-insulating, and the flexible methods let you put insulation where it actually does something. In my view, it will make better buildings for New Zealand.
Calculation method or modelling method: which is better for H1 compliance of commercial buildings?
For a simple commercial or mixed-use building, the calculation method is perfectly fine. But once a project has cost pressure, lots of glazing or awkward construction constraints, the modelling method (H1/VM2) almost always comes out ahead.
The calculation method compares your building's R-values against a reference building. It's essentially an R-value spreadsheet.
The modelling method simulates how your actual building performs across a full year. It shows that your design uses no more heating and cooling energy than the reference building. Because it models the real building, it accounts for things the calculation method can't, such as thermal mass, orientation and solar gains. That gives you room to make trade-offs.
When the modelling method usually wins:
You want to cut costs by reducing insulation levels.
You want to use non-thermally broken glazing. On buildings with a lot of glazing, thermally broken frames can be a major cost. Modelling can often show compliance without them.
The building has its own constraints. For example, a steel-framed roof where you don't want a heavy PIR build-up, or HVAC services that limit how much insulation physically fits.
The design has a lot of glazing, which often makes the calculation method hard to pass without expensive upgrades.
When the calculation method is enough:
A simple building with modest glazing, where the specified insulation passes easily.
The catch is that clients who default to the calculation method usually miss out on significant cost savings without realising it. We see this often: a project comes to us with an insulation specification sized for the calculation method, and modelling lets us bring it down.
For more on glazing trade-offs, see our post on thermally broken vs non-thermally broken windows.
Case study: an open-plan office warehouse in Whangārei (Climate Zone 1)
On a recent 350 m² commercial project in Whangārei, H1/VM2 modelling meant the client didn't have to strap or insulate their precast concrete tilt panels. With the insulation and glazing reductions included, they saved over $10,000.
The building was an open-plan office and warehouse in Climate Zone 1, built with precast concrete tilt panels. The client didn't want to strap and line the panels or add insulation, which would have added cost, time and an extra trade to the build.
Under a prescriptive approach, uninsulated tilt panels are very hard to justify. By modelling the building as it would actually operate, we showed it met the H1 energy performance target with the panels left as they were. We were also able to reduce insulation and glazing specifications elsewhere. The client kept their preferred construction method, and the combined reductions came to more than $10,000.
This is a typical case where modelling pays for itself: one modelling report replaces a much larger, unnecessary construction cost.
When does H1/VM2 have to be used?
H1/AS2 doesn't apply to some buildings, so you'll need the modelling method (or an alternative solution):
Buildings with curtain walling. H1/AS2 excludes them.
Buildings with foil insulation. Both H1/AS2 and H1/VM2 exclude these, so an alternative solution is needed.
What about HVAC? (H1/VM3)
H1/AS2 doesn't cover the energy efficiency of HVAC systems (Building Code clause H1.3.6). For commercial buildings, HVAC compliance is shown through H1/VM3 or an alternative solution.
HVAC also affects the thermal envelope. Ceiling voids full of ductwork can limit how much insulation you can physically install, and modelling can find a level of insulation that works around the services. Our HVAC engineering and H1 teams work together, so the two don't fight each other.
Mixed-use buildings: one thermal envelope or several?
It depends on how the different parts of the building are used. H1/AS2 now lets you treat a mixed-use building as one thermal envelope or as multiple. In some cases, modelling several separate envelopes actually makes compliance easier, because a hard-to-insulate area doesn't drag the whole building down.
There's no blanket answer, and this is a decision worth discussing with your energy modeller early in the H1 process.
Common mistakes on commercial H1
The biggest one we see is over-specifying insulation. Designers often size insulation conservatively, or use the calculation method because it feels simpler. They end up paying for R-values the building doesn't need. When those projects come to us, modelling typically lets us reduce the specification.
We wrote about this in more depth in Stop over-specifying: the engineering reality of H1 reports in New Zealand.
On the plus side, commercial H1 submissions we prepare rarely attract council RFIs (requests for information) when the modelling and documentation are done properly.
When should you engage an energy modeller for commercial H1?
The best time is when your design plans and schedules are largely firmed up, close to consent lodgement. At that stage, the H1 report is about confirming the final detail, such as what insulation levels and glazing you can use, rather than chasing a moving design.
Engaging too early often means paying for many rounds of re-modelling as the design changes. Our H1 reports include one design iteration, because things do change. But the closer to consent you engage us, the more smoothly the process tends to run.
Frequently asked questions
Do commercial buildings need an H1 report in New Zealand?
Yes. Commercial buildings that are heated and cooled and over 300 m² must show compliance with Building Code clause H1 (energy efficiency) for building consent. This is normally done with H1/AS2 (calculation method) or H1/VM2 (modelling method), plus H1/VM3 or an alternative solution for HVAC. An H1 report documents compliance for the building consent authority.
When does the H1/AS2 schedule method end?
The schedule method has been removed from H1/AS2 second edition. From 27 November 2026, earlier editions can no longer be used to show compliance. After that date, commercial buildings over 300 m² must use the calculation method or the modelling method, or an alternative solution.
Is the modelling method more expensive than the calculation method?
The report itself usually costs more, because it involves building and simulating an energy model. But on all commercial projects it more than pays for itself. Modelling can reduce insulation levels, allow non-thermally broken glazing, or avoid extra wall linings, savings that are often far larger than the cost of the report.
Can I use non-thermally broken windows on a commercial building?
Often, yes. Using H1/VM2 modelling, the energy performance of the whole building is assessed, so less expensive glazing can be offset by performance elsewhere or by factors like thermal mass and orientation. Whether it works depends on your design, glazing area and climate zone.
Does H1/AS2 apply to buildings with curtain walls?
No. H1/AS2 doesn't apply to buildings with curtain walling. These buildings need to show compliance using the modelling method in H1/VM2 or an alternative solution. Curtain-walled buildings are a common case where an energy modeller is needed.
Who does H1 modelling for commercial buildings in New Zealand?
Specialist energy modellers and building services engineers prepare H1/VM2 reports. Reshape Consulting prepares H1 compliance reports and building performance modelling for commercial, mixed-use and residential projects across New Zealand.
Key takeaways
From 27 November 2026, commercial buildings over 300 m² must use H1/AS2 or H1/VM2 second edition. The schedule method is gone.
The calculation method suits simple buildings.
The modelling method usually saves money on projects with lots of glazing, cost pressure or construction constraints.
Over-specifying insulation is the most common and most expensive mistake.
Curtain-walled buildings need H1/VM2, and HVAC compliance sits in H1/VM3.
Get your commercial H1 compliance sorted
If you have a commercial or mixed-use project heading for consent and want to know whether modelling could cut your insulation or glazing costs, Reshape Consulting can help. Find out more about our H1 compliance reports and building performance modelling, or get in touch with our team to talk through your project.
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