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Five Reasons Why Zero Net Energy Buildings Are the Real Deal

April 3, 2015

by Heather Flint Chatto

When New Buildings Institute (NBI) published the first-ever list of verified zero energy buildings in 2012, an abstract concept turned real. These were documented examples of high-efficiency buildings coupled with onsite renewables that could produce enough energy to power themselves over the course of a year. The list was not long—21 buildings in all—but the potential for exemplary energy performance in the building sector has captured the imagination of a group of innovative building owners, designers and government professionals who are now guiding the way to a lower carbon future. These early adopters are growing the market for zero energy beyond the early university and environmental nonprofit buildings to a more widely adopted objective, practice and policy direction.

By NBI’s most recent count, the list of verified buildings has nearly doubled in just three years. Even more promising is the increase in emerging projects with zero energy intentions–from 39 in 2012 to 152 in 2015. While more than one-third of the verified projects hail from California, which arguably has the most aggressive zero energy policies in the country, verified or emerging buildings are currently located in 39 states across all eight climate zones.

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Even though the growth is encouraging, there are those who wonder whether zero energy is the right path for energy efficiency investments. After all, these buildings cost more, the learning curve for design teams is high, zero energy is harder to achieve in existing buildings where the bulk of energy-saving opportunities exist, and so on. These are true barriers in this extremely nascent market. But despite the challenges, zero energy is the real deal. Here are five reasons why.

1) Designers and builders are proving feasibility with larger buildings and expanded types—including existing buildings.

With a growing set of successful projects to serve as models, design and construction teams are quickly figuring out how to achieve zero energy performance while keeping costs in line with other green building projects. All agree that integrated design is fundamental to achieving the necessary energy performance and managing project costs. This process allows all stakeholders—owner, architect, engineer, building manager, etc.—to work together from the start ensuring that building form and function meet the needs of occupants as well as energy performance goals.

Analysis on verified buildings  shows 16 different types including schools and college buildings, offices, retail, libraries, labs and healthcare facilities. In addition, there is growth in the number of larger projects—more than 25% over 50,000 square feet and half of those over 100,000 square feet.

Most significant is the growth in existing building projects with about one- quarter of the verified buildings representing deep energy renovations. With this shift, zero energy performance has moved from a new-construction-only option to something that can be applied to the billions of square feet of existing building stock across the United States.

2) The cost of solar power is dropping.

The lion’s share of zero energy verified properties are using photovoltaic (PV) systems, also known as solar power, to generate onsite energy. However, expensive PVs have deterred some exemplary energy projects from taking the final step of adding renewables to achieve zero energy status. That cost equation is changing now as prices for rooftop PV systems have fallen in recent years–29 percent from 2010 to 2013, according to the Union of Concerned Scientists.  

Owners and communities are also starting to think creatively about how to supply buildings with the requisite renewable energy.  Communities and campuses are adopting commitments to make districts or groups of buildings zero energy with centralized generation within a campus or neighborhood. The U.S. Army and several leading universities have major commitments to get their portfolios to zero energy. These increases in scale will only help reduce the cost of renewables further.

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3) Definitions are sorting out with help from DOE.

Zero energy policies have been largely the purview of local and state governments, with jurisdictions defining and setting their own varied rules about what constitute zero energy. However, the U.S. Department of Energy (DOE) stepped in earlier this year with a request for responses on the definition for zero energy buildings, how to designate buildings that meet various standards and how to set guidelines that could help governments, private companies and others in constructing and recognizing the buildings.

“A broadly accepted market definition of [zero-energy building] boundaries and metrics is foundational to efforts by governments, utilities, or private entities to recognize or incentivize zero energy buildings,” the DOE notice says. National definitions will ease the way for jurisdictional adoption of zero energy policies by clarifying questions such as:  Are combustion fuels allowable? Can renewables be nearby instead of onsite if space is at a premium? How do you calculate emissions saved from zero energy performance?

4) Policymakers understand that buildings sit at the nexus of energy and environmental policy.

Policymakers are increasingly focused on buildings as a viable strategy for controlling energy demand and curbing climate emissions locally. That’s a good thing as buildings account for roughly 40% of the carbon emissions in the United States and up to 80% in cities like Berkeley, California. Ongoing work and tracking at NBI shows an increasing range of states, counties and cities specifically citing zero-energy.

California’s 2020 residential and 2030 commercial requirements for zero energy set a strong precedent in a large economy.  More significantly, the Golden State has joined with Oregon, Washington and British Columbia under the Pacific Coast Collaborative (PCC) to focus on zero energy buildings as a clean energy strategy. The PCC provides participating governments a formal basis for cooperative action, leadership and information sharing. Collectively, this group represents the seventh largest economy in the world holding tremendous and potentially transformative market power.

New standards requiring zero-energy buildings are also in place or under way in Cambridge, Massachusetts; Fort Collins, Colorado; Tucson/ Pima County, Arizona; and Santa Barbara. Pilot programs for zero energy buildings in Massachusetts, New York, Vermont, Oregon, Maryland and Rhode Island will help gain market acceptance.

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5)  Major corporate owners are acknowledging zero energy as a future trend.

Public sector buildings have represented the majority ownership of zero energy verified projects, but today more than 25% of the zero energy buildings from the 2015 verified list are privately held or developed. Corporate leadership in sustainability metrics and zero energy targets for their real estate assets (along with the visibility of a building’s solar panels) are putting these leaders in the spotlight.  “Zero energy buildings are definitely leading the future of the market,” said Clayton Ulrich, Senior Vice President at Hines, a commercial real estate firm that has developed more than 275 million square feet in over 870 properties.

Fortune 500 companies such as Walgreens and more recently McDonald’s are investigating what it would take to create zero energy retail spaces and quick-serve restaurants. Walgreens opened in late 2013 its first zero energy store in Evanston, Illinois. McDonald’s recently concluded a technical and financial feasibility study conducted by Rocky Mountain Institute (RMI), NBI and kitchen equipment experts, Fisher-Nickel.  The study found that at all three prototype locations—Chicago, Orlando and Washington, DC—net zero energy is possible on a stand-alone traditional McDonald’s site, without any reductions to the menu or service.

“The net-zero-energy study has become the North Star that will continue to guide our efforts to improve the energy efficiency of our new and existing restaurants,” said Roy Buchert, Global Energy Director for McDonald’s. McDonald’s is likely to leverage this net zero energy study to drive further efficiency in new and existing McDonald’s restaurants where it makes business sense, according to RMI’s blog on the study. 

It is not often you can look 20 years down the road and see what’s coming. Zero energy offers one of those opportunities and with a rather large pay off. Zero energy building revenue is expected to exceed $1.4 trillion annually by 2035, according to a study by Navigant.  After decades of “percent-better-than code” and point-based labeling programs, nothing beats zero for a concrete goal that owners can define and this next generation of millennial occupants will desire.  While design firms and policy are laying the groundwork for getting to zero, the dramatically changing economics of renewable energy and private sector investment are accelerating the transition from energy-efficient buildings to those that are fully self-generating their energy—the real deal, indeed.

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