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Net-Zero Energy Buildings Are Coming - What About The Buildings Already Standing?

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In my last post, I wrote about the traveling *Das Haus pavilion, a showcase of German-made sustainable technologies available for homes and offices today. The conference that preceded my tour of the Das Haus exhibit, “The Net-Zero House – Propelling Green Building Concepts into Mainstream,” presented by the German American Chamber of Commerce on February 23, grappled with the thorny subject of how to successfully deploy energy-efficient technology in new and existing buildings.

In the opening keynote, Dan Geiger, Executive Director, U.S. Green Building Council (USGBC) – Northern California Chapter, noted that green building has been a bright spot in an otherwise gloomy market. Total construction starts were down 24% in 2009, he said, but “the good news is that green construction is growing like mad.”

Geiger cited figures from McGraw-Hill Construction’s Green Outlook 2011. From 2008 to 2010, he said, the value of green construction increased by 50%. “Within a down market, green is up,” he said. The growth is not limited to new construction. McGraw-Hill predicts three- to five-fold growth in major green retrofit projects from 2010 to 2015. Forty-two percent of businesses surveyed said that net-zero energy building presents a business opportunity.

Geiger also noted the evolution of LEED (Leadership in Energy and Environmental Design) guidelines. Every two or three years, he said, LEED raises the bar. The trajectory of improvement, he said, suggests that LEED Platinum will likely mean net-zero energy construction by 2018; by 2030, LEED Platinum will likely mean “regenerative” buildings.

As usual, California is out front. Geiger mentioned the importance of the state’s celebrated Title 24 building energy efficiency standards, which partly explain why Californians pay 20% less on their electricity bill than the average American. Less well known is that coming rules will push the state much further. By 2020, all new residential construction must be net-zero energy; by 2030, the same applies for new commercial buildings. The revised 2013 Title 24 standards will, Geiger said, incorporate photovoltaics into the code, including solar-ready requirements.

Challenges to adoption

All of the morning’s speakers agreed that green building is thriving, and that net-zero energy buildings will not be held back for want of proven building technologies and strategies, such as passive house construction, that save energy. But panelists repeatedly emphasized that available solutions are not being deployed, owing to the inertia, lack of education, and misreading of the consumer.

“We need to be pushing the envelope,” said James Bill, a licensed architect and board member of Passive House California. “We’re building buildings that won’t be renovated again for another 50 years. They’re going to be consuming energy that we could easily and cost-effectively eliminate from the process.”

Tenaya Asan, Senior Manager, Build It Green, emphasized the need to educate realtors. There are just two MLS (Multiple Listing Service) professionals in California trained to recognize and identify a green home, she said – making it difficult for sellers to receive maximum value for their energy-efficient home. “The fact is that most real estate professionals don’t feel that they have enough experience, or don’t want to take the risk, to identify the green features,” she said. A problem Build It Green is addressing through trainings.

Dan Geiger cited research undertaken by the USGBC on schools. What parents want, he said, “is a modern, healthy school, so that their children get good grades and go to college. I didn’t say the word ‘green.’ Consumers think about this in a different way than we, the practitioners, think about it.”

Humans are also reactionary, said David Edwards, Founder, Earth Bound Homes. “The majority of our population doesn’t do things for the better good now. They do things because they have to. The problem now is that water is so cheap there is no ROI (return on investment) on water conservation. The ROI is 10,000 years for a high-efficiency sprinkler system. What person would do an ROI of 10,000 years for anything? It has to be something where you actually care.”

What about existing buildings? A San Francisco story

An illustrative example of how difficult these challenges can be happened to come from the city where the conference convened, San Francisco. Reuben Schwartz, Residential Energy Programs Manager, Department of the Environment, City and County of San Francisco, said that one of his department’s most important initiatives is using federal stimulus funds to incentivize homeowners to undertake energy retrofits.

“I am not at all worried about building new energy-efficient homes,” he said. “It can be done. It has been done. I am really worried about the 98% of the other homes that are out there.”

“At this stage, there’s only a very small market segment that will buy something because it is energy efficient,” he said. “That’s why default choices are so important” – energy efficiency standards for new buildings and products, for instance, that make the green choice an easy one.

San Francisco had intended to offer homeowners the ability to undertake energy upgrades through loans tied to an annual property tax assessment, but the city shuttered its program after federal housing regulators raised concerns about property assessed clean energy (PACE) programs. (A recent court decision, and a new federal rulemaking, offer hope that PACE programs for homeowners will be revived, as I reported at my Forbes blog last month.)

Why isn’t energy retrofitting taking off? Schwartz acknowledged that bureaucratic hurdles are a factor. More important, he said, is that “it doesn’t work on a massive scale because it doesn’t pay off.” In San Francisco, he said, heating and cooling demands are lower relative to other climates.

He also cited the challenge of low energy prices. He gave an example. Assume you could save $100 per month on your electricity bill after an energy upgrade (which would require a deep retrofit), or $1,200 annually. A $12,000 retrofit, the average in San Francisco, would require a 10-year payback. “That kind of math doesn’t work,” he said. Government subsidies help, he said; in San Francisco, they cover about 40% of the retrofit.

Reaching scale is still a problem. Schwartz said 187 houses are slated to receive energy retrofits in San Francisco. It would take another $40 million in subsidies to retrofit the remaining 99.8% of single-family homes in the city, he said. “The math just doesn’t pencil out.”

“What you can do,” he said, “is start to go to people where the market is at” – undertaking an energy upgrade at the same time as a kitchen remodel, or upgrading the home before a sale. “There are these cycles of home improvements,” he said. “It’s important to make these default choices there.”

*Note: The German Chamber Network presented the Das Haus pavilion. Read my post about the clean energy and green building technologies on display at the pavilion here.