Zero Energy Redefined

The Grid has redefined the potential

PTC Computer Solutions has been involved in working with builders who work toward attaining that ultimate goal of “Zero Energy” homes. But, with many of the utility companies controlling the grid and the benefits of “Net Metering” once thought to be the solution, now changing their tune, it’s become apparent that we need to redefine ‘Zero Energy’ for Homes. It’s time to revamp the lingo around zero energy?

In a recent article in Builder Online, this was the exact discussion. Zero Energy must be redefined.

Zero energy is when the total amount of energy used by a home on an annual basis is equal to the amount of renewable energy created on-site. It should not be confused with energy efficiency or less environmental impact. Meaning if one loads a rooftop full of solar panels, any house can achieve zero energy. When excessive solar panels are installed, more energy will be generated than required to operate it—sometimes resulting in grid overload and a negative impact on the environment.

Zero Energy vs. Zero Energy Ready

In 2013, the U.S. Department of Energy launched its Zero Energy Ready Home (ZERH) program. The goal? To design a home to reduce its energy demand as much as possible, making it zero energy ready. In turn, very little solar is necessary to achieve zero energy compared with homes built to code minimum. A recent report by the Rocky Mountain Institute makes the case for zero energy ready homes, citing that it increases costs by as little as 1%.

Solar salespeople sometimes use “zero energy” to capitalize on incentives and sell homeowners solar panels with the potential of “selling” energy back to the utility. On the other hand, the DOE and its ZERH program use zero energy to advocate a better built home that uses less energy to operate, improved indoor air quality, less water use, and lower environmental impact.

Selling solar panels to customers on the premise of zero energy sometimes results in the adverse effect of net-metering, the anti-green effect, a cost shift, and grid overload. On the other hand, advocating zero energy to home builders can be positive—inspiring them to build homes that are designed to be energy efficient first, with the goal of reducing energy demand—resulting in homes that are superior in quality compared with those built to code minimum. When combining a low energy demand home with solar panel affordability, it allows zero energy to make economic sense, and it is scalable.

Builders Embrace the ZERH Program

Since its inception, ZERH certifications have grown to nearly 3,000 homes. Moving forward, program commitments exceed 10,000 homes. Furthermore, the number of builders who have built or plan to build a zero energy ready home in 2019 has doubled to 44% from 21% in 2015. (Dodge Data and Analytics in 2017).

Everson says we must focus on designing against net-metering and grid overload and solve the duck curve—the problem of too much energy created at non-peak hours—and lighten the environmental impact. He says incorporating storage will alleviate the need for coal and nuclear power supplies to fire on and off due to net-metering.

Everson is not alone in the conversation about combating system peaks and distributed energy with storage. In New Hampshire, Liberty Utilities is launching a pilot program that will subsidize up to 500 battery storage units for homeowners to be proactive in lowering their utility bill while responding to system peaks. The pilot program is intended to produce a pivotal test case for home energy devices and reducing overall grid costs.

Could less solar have greater benefit to the environment than using more? Everson says yes, as demonstrated by the Mandalay iON home. The homes feature very low energy demand, giving special attention to energy design—balancing solar and storage with energy management software and technology.

The Importance of Energy Storage

The solution to wild electrical fluctuations in the grid is storage. Will storage transform the future of low-carbon energy generation? Not by itself. It’s one of several important factors—distribution models and battery-based grid regulation among them. Energy storage has the potential to shape the global energy landscape as it allows for renewables in places where the grid was unable to accommodate them. Given the decreasing cost and technology advancements, storage is primed to counter the challenge of intermittent energy supply. It is hard to argue against storage when considering the following:

1. Storage costs—an affordable solution

Bloomberg New Energy Finance (BNEF) has forecast a veritable boom in energy storage installations in the coming years with investments hitting U.S. $1.2 trillion by 2040. Falling battery costs will be the driver behind this boom, with BNEF projecting a 52% drop in utility-scale lithium-ion systems by 2030.

2. Less solar is better for the budget and the environment

When using storage, fewer solar panels are necessary to achieve a near zero electric bill and avoid net-metering. Everson says it may sound counter-intuitive, but using fewer solar panels and targeting a higher HERS Index has a greater benefit to the environment than a zero HERS Index home with MORE? solar—and it costs the homeowner less. Everson is adopting this formula for all new homes built by Mandalay.

3. Going dark during peak—less negative impact to the environment

More of an issue in sunny states, the duck curve strains the grid as it forces ramping down conventional plants so far that the fast ramp-up to meet peak evening demand strains their operational capability and spikes fossil fuel resources and carbon emissions.

The management of such oversupply during the midday hours results in decreased frequency response capabilities, which are caused by fewer energy resources being available to automatically adjust energy generation to maintain grid reliability.

Since solar energy cannot ramp up or down on demand, grid operators have trouble balancing power generation if there’s too much solar. Solar energy causes periods of overgeneration during the day, followed by steep ramping needs from conventional sources in the evening. Traditional power supplies of coal and nuclear were not designed to fire on and off. Yet this is exactly what happens with solar and the duck curve. To avoid this risk, the grid needs access to automated frequency response systems that can quickly and automatically ramp up or down in the event of sudden interruptions.

Recent policy shifts by the Federal Energy Regulatory Commission (FERC) and some pioneering states, coupled with advancements in the energy storage market, are signaling a shift toward utilizing energy storage as a more environmentally friendly and cost-effective alternative to gas-fired peaker plants. If these trends continue, a combined solar and energy storage facility could help provide a clean, renewable energy solution to the problems created by the duck curve.

Zero Energy Moves Forward

Will storage spell the end to small companies selling solar panels? Not exactly. But these companies will be forced to become more creative. If they are going to survive, it will require adapting to a new market—obtaining detailed energy use data for clients, predicting energy flow on a second-by-second basis, and calculating financial payback. This will force installers to get savvier with energy modeling and storage trends. They also may be forced to incorporate storage solutions into their product lists.

As private entities posture to support their interests, the zero energy and net metering debate intensifies. Those protecting nuclear and coal interests argue against solar and storage. Utilities argue against net-metering citing a cost shift and curtailment, while solar salespeople argue for it as arsenal for their sales pitch to homeowners. One thing is certain: thanks to net-metering and storage, the zero energy of yesterday is undergoing a revamp.

Meanwhile, Everson is making a clear statement. While others debate, he has completed his first 10 Mandalay iON homes, all of which are occupied. He has also broken ground on a 650-home iON community that will be dark during peak and have the storage flexibility to provide electricity for an additional 2,000 homes. Everson is proving the model (in Arizona and beyond) as financially sound (for builder and home buyer), scalable, and as having less environmental impact and strain on the environment.

Parker Associates and PTC Computer Solutions have worked on a plentitude of projects through the years where many benefited from our experience gained while working in 33 states and 17 foreign countries and for more than 500 developers and builders since 1982.  Want to learn how we can assist your next development?  Visit our website at http://www.parkerassociates.comand/or call David WB Parker at 904-607-8763.

David WB Parker is a principal of Parker Associates of Jacksonville, Florida, marketing consultants to the real estate industry; President of PTC Computer Solutions, IT Specialist, and an active real estate sales professional with Barclay’s Real Estate Group based in Jacksonville, FL.  He can be reached at 904-607-8763 or via email davidp@ptccomputersolutions.com.

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