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Zero Energy Buildings on the Rise

2018 State of the Industry Report

Di Nola Ralph

At New Buildings Institute, we have been focusing on zero energy buildings since 2010. Our first Getting to Zero Status Update and Buildings List, which reported on the national trends in zero energy (ZE) buildings, appeared in 2012 and our most recent report was just published in January. In that time, we have witnessed a 700 percent increase in projects that are either verified or emerging ZE projects. Verified projects have produced measured energy use data proving that the building only uses as much energy as can be produced through on-site renewable generation resources over the course of a year. Emerging project have a stated goal of achieving ZE, but are still under construction or not fully occupied for a year.

Our count of buildings in both categories is near 500 and through our study, we have identified and reported on trends related to locations of projects, building types and sizes, and ownership, both public and private. The overarching trend is significant growth and market adoption. 

It’s exciting and compelling, and while the count remains relatively small in the grand scheme of things, we believe leading projects are significantly influencing the industry. Designers, architects, engineers, contractors and building owners are leading this effort. Naturally, this kind of achievement is highlighted in publications such as Metal Architecture and other popular publications as leadership examples. Through these examples, we are able to show zero energy buildings as gaining market share, and we

Zero Energy Building Growth

 understand that more clients are asking for them. Whether in public agencies or in private development, there is a trend of requiring zero energy buildings in requests for proposals (RFPs). Players in the industry now need to demonstrate experience and develop the capability to execute these kinds of projects.

Make the Most of New Opportunities

In this day and age, it’s important to be clear that ultra-low energy building practices are a non-partisan strategy and solution. My favorite example is the leading segment for zero energy in our list: the education sector. We see K-12 schools, community colleges and universities pursuing zero energy buildings as the highest percentage of buildings in our count. I find this heartening, because who could argue with education facilities being designed, built and operated as high-performance buildings that are delivering optimal environments for working and learning?

School districts are taking their utility bills to nearly zero and reinvesting those savings into programs for the classroom and teacher development. Whether you’re interested in energy independence or climate change, both conservatives and progressives can get behind this strategy. That’s borne out by this trend growing in red, blue and purple states alike.

While the largest percentage of zero energy buildings is in the education sector, we are also seeing significant growth in multifamily and affordable multifamily housing. Again, it makes a lot of sense for those buildings to be zero energy because we want to provide people, especially low-income families, with affordable housing. We know that low-income families pay a disproportionate amount of income toward utility bills. So this trend is positive and has impacts beyond the traditional interests of green buildings, such as reduced energy consumption and greenhouse gas emissions reductions. Zero energy buildings help address energy democracy and social equity in our communities.

In the metal construction industry, one building type that can most easily achieve zero energy performance is warehouses, although we’re not seeing as many projects as we would expect. These expansive facilities with large roofs, and typically low-energy intensity, are prime targets for zero energy and we encourage developers of these facilities to think about zero energy as a fundamental strategy.

Even if they don’t fully implement, warehouse owners and developers can achieve what we call “zero energy ready.” In other words, design the facility so that roof-mounted or site-mounted renewable energy systems can be added in the future. We know that in certain utility service territories and jurisdictions, the incentives have not been implemented to help make this strategy affordable now. But as local ordinances and buildings codes begin to require higher energy performance from buildings—even existing buildings—we want to remove the challenges facing warehouses for inevitable retrofits.

Address Continuing Challenges

One of the greatest challenges in zero energy buildings is the perception that it will cost more. This is not necessarily true. We certainly see zero energy buildings that are expensive on a square foot costs basis, but we also see buildings that are within range of conventional construction costs. The things that are driving costs in this economy are lack of available labor and material price escalation as well as overall increase in construction costs in certain markets.

One of the greatest ways to get to zero within budget is take the renewable energy system out of the equation by pursuing a power purchase agreement (PPA). Many industry players such as school districts and government agencies are designing ultra-low energy buildings and avoiding the capital costs for renewable energy systems by leasing the roof space to a third party to design, build and operate the system—typically photovoltaics (PVs). In this approach, the building owner agrees to purchase all or part of the energy from the system. It is critically important that the building owner retain the renewable energy certificates that are associated with that system because those represent the environmental attribute and added value for the project.

The final challenge I want to mention is federal preemption of equipment efficiency. The federal government sets standards for efficiency, and states and local jurisdictions are not allowed to require more stringent standards. This is mainly around heating equipment, but also impacts other efficiency standards. Many jurisdictions fear getting sued if they try to set higher standards, which becomes a barrier to the growth of zero energy buildings. NBI recently completed a white paper to highlight this issue and propose solutions.

The Future

The trend is rising for zero energy buildings, but one specific aspiration we have in the next few years is to have every new school and existing school renovation attempt to get to zero. One could argue some sites are not suited to zero energy and there are concerns about that investment taking away from other educational needs. Let’s have a campaign where we highlight the benefits to students, communities, taxpayers, as well as the planet overall. We envision a future where all buildings—new and existing—are able to get to zero and we believe that community schools are a tangible way to demonstrate feasibility and benefits.

With the innovation we see in energy storage, electric vehicles and renewables integration, prices are falling and there is a convergence of technology that is creating an unprecedented opportunity in the building sector. If we’ve got renewable energy coming online, and storage that helps with grid harmonization and reducing curtailment, we are on the right path. This is happening because state and local government and private sector leadership are all moving in the same direction. In the next five to 10 years, we are bullish that this trend will continue and accelerate.

Ralph DiNola is CEO of New Buildings Institute, a nonprofit organization driving better energy performance in commercial buildings. DiNola has spent more than 20 years devoted to helping developers, design professionals, government and others seeking quantum advances in their building practices. He can be reached at