Zero Net Energy Buildings 2.0: Achieving Big Bold Energy Efficiency Strategies

by Virginia Lacy and Victor Olgyay, reposted from Rocky Mountain Institute

Big Hairy Audacious Goals. Jim Collins and Jerry Porras described them in their book Built to Last as a success strategy of visionary companies. What exactly is a big hairy audacious goal (BHAG)?

A BHAG is an “audacious 10- to 30-year goal to progress toward an envisioned future… A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line … people like to shoot for finish lines.”

In 2008, the California Public Utility Commission established a few BHAGs of its own: By 2020, all new residential construction in California will be zero net energy (ZNE). The regulators defined zero net energy as a project that “employs a combination of energy efficiency design features, efficient appliances, clean distributed generation, and advanced energy management systems to result in no net purchases of energy from the grid.” By 2030, all new commercial construction will meet the same goal.

California calls its ZNE goals Big Bold Energy Efficiency Strategies, or BBEES, “not only for their potential impact, but also for their easy comprehension and their ability to galvanize market players.” Indeed, ZNE captures the imagination and inspires action. A goal to achieve zero net energy provides a tangible benchmark with an ostensibly clear finish line—at least on the building or community level.

But what about the system level? Does a world of zero net energy buildings make for a sustainable energy future?

The Challenge

Applying ZNE design principles has the potential to create superior environmentally sustainable buildings with multiple benefits. The design considerations that go into making a ZNE building dramatically more efficient can also simultaneously improve indoor environmental quality, comfort, and occupant satisfaction. For example, buildings that use daylight as a primary source of ambient lighting will generally have better indoor visibility. Attention to airflow in buildings results in better ventilation, and fresher interiors.

Also, by design, most ZNE buildings will interact with the electricity grid. While no one definition standard exists, ZNE is often defined as achieving a net-zero energy balance annually through on-site renewable generation, provided from sources such as solar photovoltaics (PV) or biogas-powered fuel cells. However, while the time scale of ZNE is annual, our electricity system operates on a smaller time scales—starting with milliseconds. Unlike other commodities, electricity cannot be stored cost effectively, which means supply and demand must be matched at all times. No more, no less.

A DG and ZNE customer receives less energy from the grid but the utility but still relies on the grid for power supply and network services to export power to the grid.

Although the total amount of energy demanded from the grid is smaller through efficiency and on-site renewable generation, the ZNE’s demand profile changes substantially. On smaller timescales, such as hours, day and weeks, the amount of grid power that must be imported or exported could fluctuate considerably. In fact, a ZNE building’s peak demand on the grid could be when it is exporting power. These phenomena represent a fundamental shift in the formerly one-way power system from both a technical and institutional perspective.

With the proliferation of more ZNE buildings, there could be steeper peaks and valleys that the grid will have to meet. If the building-grid interaction at smaller time-scales is not considered, as might be the case for some ZNE buildings, these buildings could have unintended consequences for the electrical grid and/or miss opportunities for additional value creation.

Emerging Trends

In Reinventing Fire, RMI looked out to 2050 and asked what it would take for the U.S. economy to dramatically and profitably reduce fossil fuel consumption for the benefit of our nation’s security, health, environment, and pocket books. What is the future vision, and what would the transition entail? In the buildings and electricity sectors, two key themes emerged: efficiency and flexibility.

First, efficiency will remain the least expensive, least risky option for meeting our growing demand for electricity services in the 21st century. Not only is efficiency the most cost-effective option for customers in the short run, it also enables massive cost savings for the system in the long run. The more electricity we save, the smaller the investment in infrastructure we must build to generate and deliver it.

Second, flexibility will become increasingly valuable in an evolving electricity system, which will require new operating and planning mechanisms, rules, and market structures. That need for flexibility will be twofold: 1) strategic flexibility to respond and adapt in a changing environment and 2) physical flexibility in the grid to adapt to major renewable energy sources, like wind and solar, which fluctuate with the weather. On the latter, having sufficient flexibility, in the form of responsive demand, fast-acting power plants, or even storage, will be key.

The Implications—And Opportunity

These principles also apply to how we define and design ZNE buildings and communities. Like investments in the electricity sector, buildings have long lifetimes; decisions made today define our future. Our designs must be flexible in not only how they perform for occupants but also in their interactions with the system at large. A more flexible load shape will have significant value in the emerging future.

To create a truly sustainable energy future, we must coordinate and calibrate our ZNE and grid interactions. Connected to larger ecological and utility systems, ZNE buildings will need to operate as metabolic nodes, exporting electricity to the grid and acting as electrical or thermal storage systems when needed. By itself, ZNE is insufficient to describe the energy performance of a building and its role as an active participant and contributor to the electricity system of which it is a part. To be the most beneficial, ZNE will need to take into account the interaction with the electricity grid. Recent conversations around the world are starting to explore methods for integrating quantitative indicators, which designers could include as they consider design options.

Advances in IT and demand-side technologies that enable bidirectional power flow, distributed intelligence, and operational control will enable the interaction between buildings and the grid to be “richer” in information and interaction. Like biological systems, they will be able to flexibly sense and respond to optimize their interaction with their surrounding environment. As a result, the role that customers and buildings play will expand.

We have the opportunity to design new avenues of communication between utilities and buildings, which are both critical aspects of the same overall system. The ZNE building future is fast approaching us, with broad appeal and manifold implications. Figuring out how the interdependence of these components are optimized may be the biggest opportunity for us to implement our BHAG of a low carbon renewable energy future.

Virginia Lacy is a Senior Consultant for Electricity at RMI and Victor Olgyay is an AIA Principal for Buildings at RMI. This piece was originally published at the Rocky Mountain Institute website.

7 Responses to Zero Net Energy Buildings 2.0: Achieving Big Bold Energy Efficiency Strategies

  1. Sam says:

    Given the low price of solar PVs, it is hard to believe that anyone is building anything without at least installing some on the roof.

  2. fj says:

    Yes, this is truly exciting and let’s hope rapidly accelerating; net zero retrofits should also be including.

    And, net zero transportation recently addressed in Southern California with something like $9 bn Federal funding to be matched by local funds for cycling and walking.

    Going net zero as quickly as possible is a very important goal rapidly changing our civilization into one with a real positive future.

  3. Mike Roddy says:

    How about this for a solution in California:
    A friend has a company that can install solar and whatever else is needed to make a commercial or industrial building zero net, for up to 4% of property value. He has saved his clients over $1 billion in energy costs, and has a national reputation.

    Cost: Zero. Client keeps energy savings and most rebates. No cash and no debt. The vendor is compensated via a tiny (1%) fee assessed upon sale.

    Interested parties (California only) can email me at

  4. Rabid Doomsayer says:

    As solar and wind assisted buildings become more common; the peak cost times of electricity will vary considerably from today. Yet some of our suppliers do not even seem to understand the questions that will arise.

    For a while yet solar supply and peak demand are likely to correlate fairly nicely. This will change. Efficiency is already well considered, but still has a long way to go.

    Flexibility through the system including at building level will become an issue. Design flexibility into the system, because things will change. Peak cost will eventually be the windless night.

    For example: Massive thermal density combined with good insulation means airconditioners can be turned off at critical times without a loss of comfort.

  5. Christopher says:

    Burning Down the House

    My partner and I live in a near zero energy house. Introduced to the German Passiv House standard at the annual 2008 NESEA Building Energy program Heather read everything to be found, designed a home with R40 wall, R70 roof, triple pane windows designed to keep the infrared inside the house, passive solar, concrete slab, heat sink on grade with r30 insulation, minimal thermal bridging and extremely low air infiltration.

    We live near the coast of NH. A typical house here burns 1000gallons of fuel oil a season….we heat with 100 gallons of propane. It’s 5am, 30 deg outside, the heat has been off since 9pm last night and the house is 68 degF. Dawn is breaking, the sun will begin the warm the house in an hour and we will not use any heat today.

    Add 3500kw of grid tied PV and solar hot water (100 gallon tank is in middle of house under stairs and helps heat the house) and our energy bill is $400 for propane and $250 for electricity (half of that is the transmission charge).

    Take away line: It is now possible to build a near zero energy house with standard building materials, slight modifications to standard building practices and for standard per square foot costs.

    Did I mention that the house includes a 3 room apartment and a young couple? And the house does not have a furnace! All heat is provided by a small propane fire place in the living room. Because the house is air tight and draft free that heat fills the entire house in a few minutes. No drafts, no cold spot, and the air stays nicely humid on the most brutal of winter days.

  6. Dominique Schwander says:

    who has expérience with insulating glass with Oerlikon Solar photovoltaic cells?

  7. Mike 22 says:

    Thanks for this article and for all the leadership RMI provides. One of the brightest lights out there for decades.

    Most of the hardware needed to build ZNE residences is now mainstream and affordable. High efficiency fridges, freezers, DHW heat pumps, heat pumps, circulators, blowers, lighting, computing, entertainment, and more are on the shelf now. Minimizing energy use has gone from being a meticulous process of balancing the costs and performance of all the various building components to being simple. The new split heat pump systems out perform the ground source heat pumps, at far lower installed cost, and far more design flexibility. The energy generation side is so cheap now that adding a few more kw of PV is simpler than, for example, balancing in more passive solar/thermal storage.

    Designing a ZNE at reasonable cost used to require considerable discipline–soon (if not already) it will be the obvious and least cost approach.

    What we don’t have yet, as the authors point out, is a clear understanding of how we will deploy the distributed energy storage needed. Electrical storage in plug in vehicles will very likely lead the way, unless the Republicans manage to wreck our nascent domestic electric car industry (again). But there are lots of niches in the home where thermal storage could be deployed. Larger hot water storage for DHW. HVAC heat pump systems which make ice when the sun shines for cooling later in the summer, and make hot water in the winter sun for use at night. Simple phase change materials in fridges and freezers which allow them to cycle on and off in response to grid requirements. Designing thermal storage into residences should be cheaper than building peaking power plants, and give us a much more robust grid.

    I wonder how the Germans are going to handle this?