How Net Zero Can Save New England Homeowners Thousands of Dollars

A version of this article appears in the September/October 2013 issue of Home Energy Magazine.

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My wife and I live in a relatively new (2008), modest (2,000 ft²), colonial-style home in southern New Hampshire. It has three bedrooms, a full basement (common in New England), and a walk-up attic, which we turned into a couple of home offices. This last feature is what made us purchase this particular home over the others we had viewed, while the fact that it was a certified Energy Star home (with a HERS score of 67) was not nearly as important.

We think our priorities for a new home purchase (location, lot size, interior looks, neighborhood, and so on, with energy efficiency down near the bottom) were typical for most couples, especially soon-to-be empty nesters like ourselves. Thus it was pure chance that we bought a home with a modern, energy-efficient furnace, Energy Star-certified appliances, better-than-code insulation levels and windows, all CFLs, and an especially tight air seal. We have lived in it for almost five years now and are quite happy with our pick. In fact, we are also satisfied with its energy performance. At least we were, until I started studying solar power and net zero energy homes for my graduate degree.

Net zero energy, or just net zero for short, can mean many different things to different people. However, the simplest definition of a net zero home is one in which annual on-site energy production (typically from PV panels) is at least as great as annual on-site energy consumption. For example, if a home's PV system produced 6,500 kWh of electrical energy in a year, and its consumption of energy (including electrical energy and energy from other fuels burned on-site, such as natural gas) was equal to or less than 6,500 kWh, then that home would be considered net zero.

Designers of net zero homes look for ways to lower on-site consumption, and only when that is done, do they size the PV system to match. In essence, they would start with a home like ours, but use better windows, more insulation, and even tighter air sealing in order to minimize heat loss in winter and heat gain in summer. They would also have aligned it closer to true south (our home faces southeast) and built it further back in the lot, where it would be less shaded by trees to the south, both steps would have improved its solar gain.

With consumption minimized and solar gain maximized, they would use computer modeling to estimate our annual energy consumption for things like HVAC, appliances, miscellaneous electrical loads (like cell phone chargers and DVRs), lighting, and domestic hot water (DHW). Based on the results, they could then design a PV system that would produce a matching amount of energy in a year, and voilá—our home would be net zero, at least according to the models. Figure 1 shows how these modeling results may look. Note how the PV system's output peaks in the summer, when the sun is higher in the sky and the days are longer, while energy consumption peaks in the winter months because of the energy used for heating a New England home.

I became interested in net zero homes while working on my Ph.D. in energy engineering at the University of Massachusetts Lowell, where I spent a couple of years on our university team that competed in DOE's 2011 Solar Decathlon (UMass Lowell partnered with the Massachusetts College of Art and Design to form Team Massachusetts). For that competition, teams had to design and build a fully functional home no greater than 1,000 ft2 that could not be powered except by the sun and must be net zero during the nine-day competition on the Mall in Washington, D.C. Our entry, called the 4DHome, ended up being within a few kWh of net zero, and was one of the more traditional-looking homes of the 19 that competed. Our modeling of this home's energy consumption and production got me thinking about net zero homes built here in New England, and wondering if these homes might make an appropriate subject for my dissertation. I started reviewing the literature and found many unanswered questions. How many of these cutting-edge homes had been built in the six-state region? Were their designs more traditional, or were they avant-garde, like several of the Solar Decathlon entries? Did the families use more or less energy than the models predicted? Did their PV systems produce as much energy as planned? Did the homes cost more than a typical home? How much money did their owners save in energy costs? And so on.

I searched for previous studies on the performance of net zero and near net zero homes in New England, and turned up just three (see "learn more"). All three studies showed that these homes could perform as designed, as long as occupant behavior was close to expected, and that their low energy consumption coupled with on-site energy production resulted in very low energy costs. However, all the homes in these three studies were in Massachusetts, all were relatively small single-family homes, and all had similar designs and mechanical systems. I decided that research using a more diverse set of net zero energy homes would provide a broader performance picture, and hence be more helpful to the various stakeholders in this niche market of residential home building. These stakeholders included architects, energy engineers, local code officials, and of course, custom home builders.

Eventually, with a lot of help from my advisor, Professor John Duffy, I settled in on studying the performance of ten net zero energy homes in New England, along with nine of their close cousins, so-called near net zero homes, and one control house, 20 homes in all. Near net zero homes are very similar to net zero homes, but as their name implies, they do not quite reach net zero. The control house was our home. Because it was located in the same region, built at about the same time, and built to Energy Star standards, it seemed a logical choice to use for comparison with the others.

I began by locating about 60 net zero or near net zero energy homes scattered throughout New England. Several of the homes had been entered in competitions like the Northeast Sustainable Energy Association's Zero Net Energy Building Award, which meant that I could mine various web sites for locations and contact information. Other homeowners had their own blogs on their houses, so they popped up in Internet searches. A few showed up in magazine articles. However, since many of these sources did not include specific addresses, I could find contact information for only about half of the homeowners.

That left me about 30 homeowners whom I could ask to participate, and happily, more than half of those eventually did. Most had moved into their homes within the past year or two and were still in that new- homeowner pride of ownership phase. They were eager to show off their special homes, as well as to have their homes' performance monitored and analyzed. The owners received no compensation for participating, other than the analysis, and as participants they agreed to complete anonymity. The eventual 19 net zero or near net zero homes that I studied represented about one-third of those built in the region as of this writing and constituted a true cross-section of those homes.

Twenty-six homeowners originally expressed interest in the project. I assigned each house a letter from A to Z in accordance with the project's disclosure policy. However, the owners of homes designated D, E, F, I, U, and Y withdrew before contributing to the project. Finally, one home (V) was technically outside New England, but because it was located within 10 miles of the Vermont border in upstate New York, I considered it close enough geographically to be suitable for inclusion in my project.

The participating homes ranged in size from 1,100 ft² to 10,200 ft², in cost from $175,000 to $2 million, and in family size from two to seven. They were scattered across New England, from urban to rural environments, and from seacoast to mountainous terrain. Fifteen homes were detached single-family houses, four (A, B, C, and X) made up half of a duplex, and one (W) was an apartment unit. A wide range of HVAC, DHW, and other technologies was used in the homes, including ground source heat pumps, natural-gas furnaces, solar-thermal systems, woodstoves, computer servers, hot tubs, swimming pools, elevators, and so on. Size of PV systems ranged from 1.14 kW to 14.4 kW. Table 1 provides general information on each house.

I spent about 18 months gathering the building specifications and occupant statistics that I would need for my modeling, as well as information on construction costs and incentive money used by the homeowners. I then collected energy consumption, production, and cost information from September 2011 through August 2012 for most of the homes (three were monitored for shorter periods because they joined the project a little late). The homeowners with this information, mostly via e-mails with utility bills attached. I collected information on other energy sources used (such as propane for cooking and wood for heating), as energy from all sources had to be included in the study. I also visited most of the homes, not only to meet the owners but also to install data loggers to measure and record the temperature, and I measured the impact of any shading on their PV systems. I used results from these two procedures in my modeling.

At the end of the 12-month period, I analyzed the data and found that the monitored results for energy performance matched the design goals of the houses for the most part. Six out of the ten net zero homes achieved net zero; two more came very close, and two fell well short. All the near net zero homes used less than half as much net energy (per square foot per person per month) as our own control home. Seventeen out of the 18 installed PV systems came within 10% of their expected energy production. I believe that these results prove that even in New England, homes designed to be net zero can achieve net zero, and those designed to be near net zero can greatly outperform even Energy Star-rated homes.

The real eye-opener of the research, however, was the dramatic reduction in monthly energy costs experienced by these homeowners, compared to the control house and to the average home in New England. During the year of monitoring, my wife and I spent $224 per month for energy, or about 13% less than the average New England homeowner, who, according to the U.S. Energy Information Agency, spent $256 per month. That was expected, since our home's energy rating is better than average. However, the near net zero homeowners averaged 51% better at just $126 per month for energy. Finally, the net zero homeowners spent an average only $8 per month for energy, 97% less than the New England average! In fact, most of the net zero homeowners spent nothing for energy during the year, or even received money back from their utilities. Figure 2 compares these monthly costs.

Because energy use is so dependent upon the number of people living in a house and on the size of the house, I normalized the individual house results to incorporate these two factors. To do this, I divided the average monthly cost by the number of occupants and by the finished floor area (in square feet) for each home. The resulting metric is the normalized cost of energy in cents per month per person per square foot (see Figure 3).

The normalized metric allows for an apples-to-apples comparison among all the homes. It shows that all the net zero homeowners (in green) and most of the near net zero homeowners (in blue) spent less than one-fifth as much on energy as we did in our "efficient" home. I calculated that this savings came to about $184 per month on average, or about $2,208 per year. This equates to over $76,000 in savings over a 30-year span, when fuel price inflation and the time value of money is included.

There is, of course, a cost associated with building a home that achieves net zero energy. For example, builders will use better-than-code materials and equipment (insulation, windows, mechanical systems, and so on), and these generally cost more. Then there is the extra labor involved in ensuring a tighter envelope, as well as the cost of hiring an architect or engineer to do the designing and energy modeling. In addition, the on-site renewable-energy system (PV, solar-thermal, or wind turbine) may add several thousand dollars to the home's cost. I say "may" because homeowners can enter power purchase agreements with a provider and put no money down on a PV system. This is a very interesting development in residential PV, but it is beyond the scope of this article.

Thus, one could assume that these homes would cost more than a standard home, and that was indeed what I found in my research. I asked the homeowners for the construction cost of their homes (including on-site renewable-energy systems but excluding land). Figure 4 arranges the houses by construction costs in dollars per square foot. The series in orange ($165) represents the median cost for 18 of the homes studied in the project (House Z's owner did not provide an estimate for construction cost, and the median does not include the control house, which is represented separately in black). Note that the cost per square foot of the net zero homes fell across the range but tended to be greater than the median. The pink bar represents the average cost per square foot ($101) for a new single-family home built in 2011 in the United States.

The median cost of $165 per square foot for these homes represents a 63% cost premium over the U.S. average of $101 per square foot for all types of home—not a trivial amount. However, it is important to note a few details. For instance, six of the homes were built for less than the average cost, including even one of the net zero homes. This shows that net zero, and especially near net zero, homes do not have to be more expensive than a regular home. In addition, these cost data represent the cost before applying incentives. The average incentive for the homes I studied came to $27,134, or $9.37 per square foot, which reduces the cost premium by an equal amount. One must also consider that while the initial costs are higher, these are usually rolled into the homeowner's mortgage, and hence represent a fixed monthly cost. Hence the owner is shielded for the most part from the variable and uncertain costs associated with energy, providing some peace of mind. Compare that to the owner of a conventional New England home trying to decide whether to lock in a price for home heating oil in July, and not knowing whether the price will fall or rise come December (it has done both in recent years).

A net zero or near net zero home, with its inherent energy efficiency and associated design characteristics, may well have a higher resale value than a similarly sized conventional home. For instance, a seller could rightly claim that his or her house is cheaper to own because of its greatly reduced monthly energy costs (and will have the utility bills to prove it). The home will also have better daylighting, no drafts, less dust, and so on compared to a conventional home, all of which will appeal to potential buyers and hence raise its resale value. Therefore, though it is too early to tell, I believe it is likely that the extra construction cost of these homes will be offset not just by their lower monthly energy costs, but also by an ultimately higher resale value.

Finally, a variety of tangible and intangible benefits increase the quality of life for a family living in a net zero or near net zero energy home. These are listed below.

• Increased comfort due to higher surface temperatures
  
  
• Increased comfort due to low air infiltration
  
  
• Superior indoor air quality
  
  
• Reduced potential for allergies, better air control
  
  
• Greatly decreased soil gas introduction
  
  
• Passive survivability during grid or equipment failure
  
  
• Peace of mind, sense of security
  
  
• Reduced external noise, home is much quieter
  
  
• Physical enjoyment of your investment

So there you have it. My research indicates that net zero and near net zero energy homes perform well in New England, and that their owners save a considerable amount of money in the form of much smaller monthly energy bills compared to typical or even Energy Star homes. On average, they do cost more than a typical home, but they can still be built for less. I hope the results of my research will encourage architects, builders, and policy makers to design, build, and promote more of these homes, not just here in New England but across the United States.

Walter D. Thomas is a native of New Hampshire and attended Cornell University for a degree in Materials Science and Engineering. He spent 20 years on active duty in the U.S. Air Force as air mobility pilot and planning officer, retiring in 2008 as a lieutenant colonel. Thomas finished work on a Ph.D. in energy engineering at the University of Massachusetts, Lowell, in February 2013.

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