Are consumers willing to spend more for renewable energy?
Here's a term you are going to be hearing a lot of in the coming years: net-zero homes.
It sounds very earth-friendly, very progressive, very environmentally conscious. And it is, although, a true definition is somewhat vague and the actual meaning depends a lot on the homebuilder that is offering this specialized type of residence.
I'll be frank. In my naiveté, I assumed net-zero homes were totally off the grid in terms of utilizing services from public utilities, water companies and the like. In the end, it was me who was way off the grid. Net zero didn't mean anything like that.
According to the U.S. Department of Energy, a net-zero home is one that uses 60 to 70 percent less energy than a conventional home, with the balance of energy needs supplied by renewable technologies.
The net-zero really just applies to the electric part of your household bill and is achieved, not by using zero electricity but by the use of solar panels producing more energy than you need during the sunny, summer months and balancing the surplus against the deficit use of energy in the gloomy winter months.
Or as a Dow Chemical Co. websites states: "A net-zero home sustains itself -- energywise. That doesn't mean that is 'off the grid (apparently others were thinking the same thing as me).' Actually, it may use some energy from the local utility. But, a net-zero home generates the bulk of its own energy and makes enough extra energy to sell it back to the utility through 'net metering,' offsetting the amount purchased."
Don't get me wrong, I think the net-zero home is a concept well worth our involvement and investment, but most people just don't understand what that means.
Shea Homes of Walnut, Calif., has been experimenting with net-zero homes since the 1990s, and its Scripps Ranch, Calif., project with 300 net-zero homes is probably the most studied subdivision by academics. This year, the company announced all homes in its "active lifestyle" communities will have net-zero homes.
"What we have done is made net zero a standard," said Rick Andreen, president of Shea Homes Active Lifestyle Communities. "It's no longer an option. If you don't want a net-zero home, you better go buy from D.R. Horton. That's how committed we are in doing this."
What does it mean to buy a Shea Homes residence in one of its active lifestyle communities?
Andreen takes a step back to explain the genesis of the Shea Homes program. "What we found out through a lot of research is that customers' biggest angst has to do with their electric bill," he said. "It doesn't necessarily have to do with water, trash service, or other inputs and outputs that come into and out of the home."
So it would follow suit that the company's net-zero concept, called SheaXero, means -- under normal usage -- eliminating the electricity charges in the electric bill.
"We can't eliminate all the electric charges because the electric company provides the services of having the lines run to your house and maintaining them," Andreen said.
There is also a gas bill.
"We include in our homes a standard electric range, but a lot of people still want to cook with gas, so they remove the electric range," he said. "It's cheap to cook with gas, but some energy is used. The same with water heaters, which, to this day, are electrically inefficient, so we continue to serve the water heaters with gas until we find heating water efficiencies in the electric system."
Also rolling out net-zero homes is KB Home of Los Angeles, which is offering a concept called ZeroHouse 2.0.
KB Home's first ZeroHouse 2.0 models were offered in the Sun Belt cities of Tampa, San Antonio and Austin, and included solar power systems and building techniques and features that enhance "efficiency well beyond KB Homes' Energy Start qualified standards," according to the company.
In December, the company unveiled what it called net-zero production homes in California at its Whistler Ridge community in Lake Forest.
"Net-zero is a more difficult process in California because our homes have gas," Craig LeMessurier, a KB Home spokesperson said. "So, what we have to do is get to a negative number on the electrical equation to pay for the gas so it's net zero."
That means the solar panels on the homes produce an excess of energy, which can be sold to the local utility. Or, as LeMessurier noted, "California Edison will buy the power back at the end of the year if you have a net credit. That's how we get to net zero. The homes use electricity, but they also manufacture electricity."
LeMessurier added, "We also do a lot to the house structurally from the standpoint of insulation, windows, roofing, etc., to get more efficient. It's not just about solar. It's a process, not an event."
All that generally means the basic cost of a home will be more expensive. To make its new residences net zero, at Shea Homes, for example, all the cost-savings features and equipment added about $5,000 to the costs.
Which made me wonder, are consumers ready and willing to pay more for a net-zero home?
Apparently so!
"Our sales immediately increased by 60 percent in the three weeks since we launched our net-zero homes at our active lifestyle communities, and our traffic increased by 30 percent, Andreen said. "When you visit our houses, we say, 'This is a net-zero home and it will eliminate your electric bill.' That's something tangible. If you can eliminate the $200 or $400 electric bill as an expenditure, people will pay more for that house."
How did KB Home do at Lake Forest?
"When we opened the community, we had 1,000 people in the first few months come out to see it," LeMessurier said. "People are interested and will buy. The math works. Once people get their arms around that concept, they'll start to go toward net zero. We are going to do a couple of more communities."
This leads me to one more conclusion: How do you make new homes more appealing when there are so many cheap, foreclosed homes on the market? One answer is net zero, because to retrofit an older home to get to net zero would be impractically expensive.
So, whether you understand net zero or not, it's a good house to buy.
By Steve Bergsman, Inman News
