Thinking About Net Zero Energy

all electric house with renewables
by Dave Brach

Martin, what do you think about this idea: design the home to be net zero with a reasonable hot water solar system. Use electric heat pumps (either ground source or air source) for all space heating, space cooling, and supplemental hot water. Use induction cooktops for cooking. Then forgo any on-site solar electric and instead enroll in the local utility's renewable energy program. Where I live one can opt to pay a small amount extra to purchase all electricity from renewable sources. Isn't this as good as net zero? After all, why not let the utility produce the renewable energy, with all the huge ecomomies of scale?

A reasonable approach
by Martin Holladay, GBA Advisor

Dave,
Your suggestion makes a lot of sense. The homeowner ends up with a least-cost house, while still avoiding non-renewable energy sources.

PV does make sense, when it makes sense
by Brennan Less

PV certainly can be cost effective. One simply needs to identify the point at which it becomes cost effective, in comparison with other efficiency upgrade options. The typical strategy that I've learned of is to implement efficiency improvements (shell upgrade, mechanical, siting, etc) up to the point where the additional cost of efficiency equals the cost of installed PV. At this point in the cost-benefit analysis, PV is more cost effective than other efficiency options. NREL's BEOpt software (not commercially available) seems to be a very interesting tool in such a design optimization process. Check out this overview: http://www.nrel.gov/docs/fy05osti/37733.pdf.

NREL's BEOpt
by Martin Holladay, GBA Advisor

Brennan,
Thanks for mentioning BEOpt, which is certainly a great tool for anyone considering PV or net-zero-energy house design. For those who missed it, I wrote about BEOpt in a previous blog:
http://www.greenbuildingadvisor.com/blogs/dept/musings/equipment-versus-...

However, you're still wrong about the cost-effectiveness of PV. Although it's true that at some point (after including various energy-saving measures in a home) "PV is more cost-effective than other efficiency options," it is NOT cost-effective compared to grid-supplied electricity — which for most Americans is routinely available without any hassle at all.

In the future, two things might happen:
1. PV modules might become cheaper, and
2. Grid-supplied electricity might become more expensive.

If either or both of these things occur, the economics of PV will of course change.

However, I've given up prognosticating. I started making predictions about rising energy costs back in 1975, and I have been wrong far more often than I have been right. When I bought my first photovoltaic module -- a 33-watt Arco module -- in 1980, it cost me $8.33 per watt. At that point, everyone was predicting a fast drop in PV prices to $1 per watt. Now, 29 years later, prices are hovering around $4.50 per watt. PV is still much more expensive than grid-supplied power.

Apples to oranges
by Brennan Less

Martin, I appreciate that quick response, and I'm sorry I missed your previous post about BEOpt. I've been unable to find it for download or purchase, have you? I'd love to have access to it and experiment with its capabilities.

On a different note, I agree that PV per KwH is more expensive than grid supplied power, but how does that factor into a conversation about NZE Homes? If the goal is simply to produce a terrifically efficient home, then it can be done cost-effectively without PV.

"Cost-effective" means to me that it is an investment with a return that meets the investor's expectations. It is not an objective number that is just "out there"--it is subjective, mostly. The only objective "cost-effective" definition, as far as I know, is that the item should pay for itself over its expected life-span. I believe PV is capable of doing that. PV has a low return on investment, possibly as low as 1% or 2%. But that is the chosen threshold when one chooses NZE construction. Obviously, some other valuation, other than monetary payback, is tipping the cost-effectiveness scale. This is exciting stuff. I just don't know of any other solution for reaching NZE, as Miscellaneous plug loads, appliances, etc. must be accounted for in some way.

I agree
by Martin Holladay, GBA Advisor

Brennan,
I agree with your analysis. When you write, "PV has a low return on investment, possibly as low as 1% or 2%. But that is the chosen threshold when one chooses NZE construction. Obviously, some other valuation, other than monetary payback, is tipping the cost-effectiveness scale," you are basically saying that PV systems aren't cost-effective, but anyone building a net-zero-energy house is willing to choose a very expensive source of electricity because "this is exciting stuff." Right. It's not cost-effective, but it's exciting.

That's all fine and good as far as it goes. If wealthy Americans want to choose an expensive source of electricity because it's exciting, no problem. But when our government structures tax incentives and rebates to favor the installation of PV on the homes of middle-class and upper-class Americans, it raises a political question: is this the best investment? Or are there other investments in energy efficiency that would yield a better return?

I have just sent an e-mail to Ren Anderson, one of the NREL engineers who helped develop BEopt, asking whether the BEopt software is available. I'll let you know what he says.

grid and NZE don't mix
by Brennan Less

Thanks so much for contacting Ren at NREL, I've been searching and been unable to find BEopt for download. Though, reading their paper on it (which includes instruction for interfacing with the software) seems to suggest otherwise.

I totally agree with you that the larger incentives that exist for PV installation are distorting the market. This could be related to the government's interest in furthering market penetration and R&D for PV, and not only to its current economic or environmental value. I would be surprised if those structuring these credits were totally unaware of the low return coming from PV installs...though maybe I'm naive. Still, our money can certainly be spent more effectively. But what tax credits are supporting NZE construction explicitly?

I guess my overall point here is that NZE homes are not cost-effective, unless some other emotional valuation, R&D need or market transformation goal is considered. I wouldn't specifically target PV as the problem. The very concept of NZE means that site-generation or some other offset, is accounting for site energy use. As a rule, this cannot come from grid-sourced electricity, unless it is sustainably generated by the utility...unlikely. So, I don't feel that the price of grid-sourced energy can even factor into this discussion, as a cost-effectiveness comparison. It's not a fair comparison, because its use will almost certainly create a non-NZE home.

I'm glad to be discussing these matters with you. The internet apparently can facilitate quality, interesting discussion. Thanks for your posts and I'll look forward to hearing what Ren has to say.

I guess we'll have to be patient
by Martin Holladay, GBA Advisor

Brennan,
Here's Ren Anderson's answer to my BEOpt question:
"Hi Martin.
Good to hear from you. We don't have a version to distribute yet — Should have this available in the next year."

It sounds like we are coming around to agreement on these issues. Obviously, if the current investments in PV lead to R&D breakthroughs that lower the cost of PV, we'll all benefit eventually. Let's hope that proves to be the case.

PV is a Prius, efficiency is a bike
by Dave Brach

This is my take-away: solar electricity and "net zero energy" is exciting, but requires lots of capital and is a bad investment; Super efficiency and reducing consumption is not very exciting (to most people) but is the most sensible use of capital and the most achievable goal for sustainable energy use, and will be into the foreseeable future.

PV is like buying a Prius; Efficiency is like riding your bike. Driving a Prius is easy, exciting, and relatively expensive. Riding a bike is hard, prosaic, and relatively cheap. Not only is the bicyle cheap, it is low-tech, hardly ever breaks down, will last a lifetime with minimal maintenance, and gets the equivalent of 2,000 miles per gallon. Just like good windows, good insulation, air-tight detailing, and good energy design. so it depends on what one's goals are.

But I am still left with this question: Why can't utilities sustainably generate electricity? If the government can incent homeowners to put panels on their roofs, then they can incent utilities to produce sustainable power. And although there are large transmission losses in getting that power to buildings, there are also huge economies of scale that allow utilities to operate more efficiently, not to mention the existing infrastructure and the convinience of not having to install/maintain a bunch of hardware on your roof. Personally, I love the idea of a building generating power on its rooftop, but does it really make sense?

Thanks for your comments
by Martin Holladay, GBA Advisor

Dave,
I like your Prius/bicycle analogy.

As you probably know, there are many programs providing incentives for utilities to generate sustainable power. These incentives include utility-scale wind generation tax breaks, and mandates by states for utilities to provide a certain percentage of their electricity from renewable sources.

At this time, utility-scale wind generation is fairly competitive with other generation methods — far more competitive than PV.

Matt Golden takes up the same theme
by Martin Holladay, GBA Advisor

In a recent blog post, Matt Golden looked into the distortions caused by PV incentives. Matt wrote,

"The photovoltaic system would net a total of $12,439 in government incentives, reducing the homeowners' upfront investment from $23,380 to $10,941. For the more cost-effective efficiency retrofit, they would receive only $624 in incentives, so their out-of-pocket expenses would total $10,176 – only $765 less than the solar panels.

"Crunch the numbers to calculate actual performance – measured in tons of carbon abated over the lifespan of these measures – and the results are shocking. We find that the current incentives available to our Sacramento homeowners value a ton of carbon abated through efficiency measures at less than $9, while the same ton of carbon abated by solar generation is worth a whopping $225 of public funding.

"Clearly there's something wrong with this picture. If carbon abatement from efficiency retrofits is more effective and more affordable, why should we place such an artificially high value – 25 times higher, in fact – on carbon abatement from solar power generation? Wouldn't it make more sense to reward consumers for reducing wasteful fossil fuel consumption even as we make long-term investments in renewable energy?

"The answer, of course, has everything to do with politics, business interests and public perception – and it is only by addressing these three factors that we can level the playing field for residential carbon reduction and achieve our national clean-energy goals."

Those who want to read Matt's entire blog can check it out here:
http://www.greentechmedia.com/articles/read/the-home-energy-challenge/

need a BEopt software
by dr.heibati

dear sir
i am a researcher in the university i need a BEopt software for energy modelling an optimization enrgy element of design building.please help me for this way
thanks a
i am waiting for sending a new version of BEopt software to my email.

BEopt software
by Martin Holladay, GBA Advisor

Dr. Heibati,
As I wrote above, BEopt software is not yet available for distribution. It is available only to researchers at the National Renewable Energy Laboratory (NREL).

By the way, Dr. Heibati: it doesn't make much sense to wait for someone to send you the software by e-mail if you don't provide your e-mail address.

dear martin holladay please
by dr.heibati

dear martin holladay please help me.
i find equest software for building energy modelling.
i need a software for zero building energy parameter with by a result of equest modelling and optimization enrgy element of design building
please send me information for this project
thanks a lot
my email is: dr.heibati@gmail.com

I don't know of such software
by Martin Holladay, GBA Advisor

Dr. Heibati,
I don't know of any available software that provides zero-energy building parameters other than BEopt.

As I'm sure you know, optimizing a building for zero-energy performance depends on a variety of factors that are location-specific. House design will vary depending upon the local price for an installed PV system, local net-metering regulations, and the local cost of high-R walls and high-performance windows.

Sometimes there's no substitute for old-fashioned calculations and construction-cost estimates. My advice: model a few buildings for energy performance, and then do construction-cost estimates for the most likely models.

more on nze concept
by Whetstone Green

Martin, thank you for a passionate article that reinforces the obvious (at least, obvious to me). I try to educate builders every day on these issues. Even more difficult is educating mechanical contractors who aren't prepared to deal with a homes that require 1/2, 1/3 or even 1/4 as much capacity as they typically install. In fact, oversized HVAC systems, already endemic in conventional construction, is becoming an epidemic in high performance homes.

Even furnace oversizing, once considered a non-issue, is creating comfort issues in super insulated homes, especially in the southern tier of the country. In most southern states, heat pumps are a no brainer in tight, efficient structures, yet the gas companies tend to force developers to install furnaces if they want to offer popular appliances such as gas ranges and water heaters.

I am fortunate to live in an area (SE Arizona) where the subsidized cost for PV is already equal or lower than current electric rates. One can argue about the macro benefits of solar subsidies (vs. efficiency improvements). However, from the homeowner's perspective, those arguments are irrelevant. Assuming a 6% discount rate and a conservative 20 year life, PV costs about 11 cents per kWh in my locale vs. 13 cents for grid power. With net metering now enacted in AZ, net zero energy gas suddenly become cost effective before ever considering electric rate inflation.

In this situation, the marginal cost of additional solar capacity serves to limit which efficiency improvements deserve consideration. In markets where the out-of-pocket cost for PV is greater than the anticipated future cost of grid power, then the latter becomes the threshold for efficiency improvements. The trick is to properly value and prioritize efficiency improvements, which often have a complex interactive affect. I too look forward to the release of BEOPT.