The world is moving toward zero energy. The IPCC’s recent report sounded the alarm on global warming. To reduce energy consumption, regulators in California have voted to require solar and battery storage on many new commercial and multifamily buildings.
Whether you own investment properties or are a lessee who’s responsible for paying the utility bills, knowing about net zero energy buildings can help you evaluate whether it’s for you. And if you can’t reach net zero energy? You can take steps to increase your energy efficiency and move the needle toward a more sustainable future.
What Is a Net Zero Energy Building (NZBE)?
A net zero energy (NZE) building is one that consumes only as much energy annually as it generates from renewable resources.
According to the New Buildings Institute’s Getting to Zero database, there are currently 143 verified zero energy buildings in the United States. Fifty-five of those locations are office buildings.
Achieving zero energy can’t be done in a day. Unless the zero energy building is new construction, you’ll see many buildings switching to renewable energy sources over time. Some renewable energy source property owners include geothermal heat pumps, super-insulate such as rockwool and reflective windows, and photovoltaic systems on their way to reaching zero energy.
Whether your new construction will be zero energy or you’re retrofitting your current building to reach zero energy in the future, this article will walk you through the many benefits of increasing energy performance.
An Example of a Net Zero Energy Building (NZBE)
The Houston Advanced Research Center (HARC) headquarters in The Woodlands, Texas, a suburb of Houston, is one such zero energy office building. It’s the first commercial building in Texas to achieve net zero energy, a designation it received in March 2020.
HARC’s mission is to provide scientific analysis on energy, air and water issues, and they are a research facility for sustainability. So it only made sense to build their headquarters in 2015 as a green building and a living laboratory for net zero energy. Working with Gennsler Architects, they designed a building with a high-performance building envelope, a geothermal HVAC system and on-site rooftop solar.
A grant from SunClub in 2018 helped them quadruple their solar output to 88 KW. And energy conservation cut their electricity usage by 20%, allowing them to achieve zero energy.
During the process, there was no area of their building that escaped the review of their building engineer, Carlos Gamarra, including coffee pots and elevator lights.
“We continue to fine-tune the set-points of the building and control ventilation based on occupancy levels,” Gamara said. “Our flat load management system allows us to control inefficiencies in the building, such as turning off all monitors in the building at 6:30pm.”
Advantages of Net Zero Energy Buildings
Commercial property owners that achieve zero energy can attract corporate tenants that have a sustainability or green branding strategy. In fact, net zero energy buildings have a number of advantages including:
Tax Incentives and Deductions
Buildings that invest in energy efficiency can receive tax incentives and deductions at both the state and local level.
Higher Resale Value
High-quality construction with an aim of sustainability will attract clients that are willing to pay a premium. Your fully-leased building will have a higher resale value than one that’s just like every other building.
Your net zero energy building will give your location a noticeable differentiation. Sustainability strategies are not just for large corporations. Small and medium companies want to develop a sustainability strategy and are in the market for energy efficient buildings.
Reduced Operating Expenses
An energy efficient building has lower operating expenses in HVAC, water and lighting. That reduction in operating expenses is money to your bottom line.
Disadvantages of Net Zero Energy Buildings
There are also some challenges to net zero energy development.
Higher Construction Costs
Initial construction costs are considerably higher for a net zero building. These expenses include everything from more costly engineering experts to higher cost HVAC, lighting and building controls systems. Some materials may be rarer and harder to obtain, extending your development timeline.
Availability of Suitable Land
Your ability to achieve net zero depends on installing renewables on site. Your building design may not have sufficient rooftop or land available to support your energy needs. Solar may need to be installed on adjacent land. Or you can develop solar on one of the EPA’s brownfield properties.
Solar panel costs have fallen. If that trend continues, installing today’s solar panels may burden your project with an expensive, less efficient system.
Even with the achievement of net zero, your building will need to maintain a connection to the grid. You’ll need a source of power during the nighttime and when it’s not sunny. For greater resilience, you’ll need to invest in on-site battery storage.
Zero Energy Building vs Green Building
A zero energy building is the goal. But one step to getting there is to evaluate green building.
A zero energy building is designed to produce enough energy from renewable energy resources to meet their requirements. That goal requires efficient energy to drop the building usage to a low level.
Green building, on the other hand, uses advanced engineering techniques to develop a building that is efficient in using water and energy, uses recycling to reduce waste, uses non-toxic materials and provides a high indoor air quality. The building is designed to focus not only on energy, but also air and water.
Reaching Net Zero Using RECs and Offsets
If on-site energy generation isn’t in the picture for your building, you can also use financial instruments to reach net zero.
In addition to Net Zero Energy certification, the International Living Future Institute offers a Zero Carbon Certification. This allows your energy efficient building to offset your remaining carbon footprint by buying carbon offsets.
Or you can pursue certification as a Renewable Energy Certificate Zero Energy Building (REC-ZEB). In this case, you’ll purchase RECs equivalent to the amount of power you use. In deregulated electricity markets, you can also sign up for a commercial electricity plan backed by Renewable Energy Certificates.
3 Steps to Developing an Energy Efficiency Strategy for Your Commercial Property
If you have an existing commercial property and are interested in net zero, your first step is to use less energy. While it’s tempting to start replacing light bulbs and changing the thermostat, slow down. Your best approach is a holistic strategy on energy consumption.
Here are three steps you need to take to make sure your efforts make a difference in your building.
Use EnergyStar.gov’s Portfolio Manager tool to compare your building to others with a similar location, age, usage, construction type and square footage. That assessment will give you a good idea of where you are underperforming.
2. Energy Use Audit
This can be as simple as walking around the building to make a note of current equipment. Or you can get an American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) Level 1 or Level 2 Audit. An ASHRAE audit will review your operations, make recommendations and provide a full financial analysis and ROI for any energy reduction measures.
There are multiple ways to finance your commercial property’s energy efficiency program. These options include:
- Green Leasing – Collaborate with your tenants to fund green building upgrades
- Commercial Property Assessed Clean Energy (C-PACE) – Most states offer these programs that provide low cost financing through local banks. Read what’s happening with C-PACE financing in NYC.
- Utility rebates and incentives – Your local utility usually offers rebates on energy efficiency retrofits and new construction. Learn how to calculate utility savings.
- State Energy Efficiency Incentives – In addition to the local utility, your state may offer energy efficiency incentives to reduce carbon emissions.
- Federal Tax Incentives for Energy Efficiency in Commercial Buildings
Ideally, with these financing options in place, your energy efficiency project can be fully funded from savings in your operating costs. Plus, energy efficiency is the first step to get to zero energy.
5 Ways to Lower Your Commercial Property’s Energy Use
Here are some of the ways to lower your commercial property’s energy use, which you may identify through your benchmarking and building audit.
Daylighting allows natural light to enter your building through skylights and windows. This structure reduces your building’s lighting costs, when you incorporate a daylight-responsive lighting system. Tinted windows, glare reduction and solar shading devices can be used to keep the heat out while letting sunlight in.
2. White Roof Retrofit
Changing your roof from traditional materials to a white roof coating can lower your energy costs by reflecting sunlight and keeping your building cooler. In a retrofit situation, the material bonds to existing services.
3. Building Control Systems
A building control system will monitor and manage the environment in your building. It allows you to monitor ventilation, lighting, power systems and security. Advanced systems combined with smart devices can allow you to control your building down to the individual office level.
4. High-Performance Building Envelope
Develop your new construction buildings to be efficient from the outside in with a high-performance building envelope. This type of system reduces heat transfer in both directions, which cuts your summer cooling costs and your winter heating bill.
5. Lighting Retrofit
Do you have any older lightbulbs in your building? Retrofitting them with new LED lighting has several benefits. First, LEDs last longer, so you will replace them less frequently. Second, LEDs produce light with less heat, helping with your indoor climate controls. And third, LEDs use less electricity to produce light, making them a cost-effective alternative.
Developing Commercial Buildings for a Sustainable Future
Statistics show that residential and commercial buildings contribute 29% of all emissions. Reducing consumption of energy can decrease greenhouse gasses. Building in a sustainable manner, whether with a zero energy building or with a green building, can help your building attract new tenants and contribute to a greener tomorrow.