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Environment Magazine September/October 2008


January/February 2008

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A New Market Paradigm for Zero-Energy Homes: A Comparative Case Study

Societies around the globe are becoming increasingly focused on the looming effects of climate change. At the center of the debate is the growing amount of carbon dioxide (CO2) and other greenhouse gases (GHGs) being emitted into the atmosphere as the result of burning fossil fuels to produce energy. Analysts currently estimate that to achieve the worldwide carbon reductions needed to mitigate severe climate change impacts, industrialized countries need to reduce carbon emissions by 60–80 percent below today’s values by 2050.

The residential and commercial building industries comprise an important sector in which technological and operational enhancements can substantially reduce energy consumption, in turn resulting in a significant positive impact on the environment. In industrialized nations, energy consumption in buildings represents a substantial fraction of the total energy demand. For example, in the United States, residential and commercial buildings combined now use 71 percent of all electricity produced and account for 79 percent of all electricity expenditures. Annual CO2 emissions attributable to electricity consumption in these U.S. buildings (658 million metric tons of carbon for residential and commercial combined) constitute about 43 percent of the country’s annual total CO2 emissions, which is approximately equivalent to the annual total CO2 emissions of Japan, France, and the United Kingdom combined. These levels support the claim of the Intergovernmental Panel on Climate Change (IPCC) that energy use in buildings offers more potential for reducing carbon emissions than any other single sector in the United States and abroad.

According to Georgia Institute of Technology energy expert Marilyn Brown and colleagues at the Oak Ridge National Laboratory, about 21 percent of total annual CO2 emissions in the United States are attributable to energy usage in residential buildings alone (a fraction that does not include the GHG emissions associated with the manufacture of building materials and products, or the transportation of such products, along with demolition materials, passengers, or freight). The situation will only get worse as new dwellings are added. For example, more than 2 million new residences are constructed each year in the United States alone.

The IPCC’s 2007 Mitigation Report states that the reduction of fossil-fuel supplied energy services for new and existing buildings of all types can lead to considerably reduced global CO2 emissions, along with net economic benefits, improved indoor and outdoor air quality, improved social welfare, increased employment, and enhanced energy security. Specifically, emissions attributable to energy consumption in residential buildings can be reduced by incorporating alternative energy sources along with sustainable designs, energy-efficiency technologies and equipment, and carbon-conscious lifestyles. Using 2004 estimates, such actions could result in sizeable percentage reductions in GHG emissions attributable to functions such as space heating and cooling (41.3 percent), water heating (12.5 percent), lighting (12.4 percent), refrigeration (8.2 percent), computing and other electronic operations (6.3 percent), wet cleaning (washing and drying, 5 percent), and cooking (4.6 percent).

With substantial public-sector investment over the last one or two decades and heightened consumer interest, the residential construction industry has gradually begun to incorporate next-generation energy-efficient features—such as advanced heating and cooling systems, and energy-efficient windows, lighting, and appliances—into new residences. Indeed, during the Clinton administration, the focus on residential energy consumption in the United States was elevated to a higher level with the inauguration of the Million Solar Roofs initiative, in which the Department of Energy (DOE) sponsored workshops, developed a pool of existing federal lending and financing options, and worked with partners in the solar and building industries to remove market barriers and strengthen grassroots demand for solar technologies. Although solar energy was not a new idea, enhancements in technology made it a more feasible and reliable proposition than it had been in the past. A few builders began to experiment with constructing energy-efficient homes that rely totally or almost totally on solar power—that is, electricity generated on-site by converting the sun’s light into electricity using semiconductor materials. The economics of mass production were really unknown, however, and there was continuing skepticism about market demand beyond what was thought to be a relatively small group of upper-income early adopters. In the late 1990s, somewhat below the radar screen, this paradigm began to shift with the convergence of several factors, including a surge in real estate values, financial pressure on energy markets, and heightened concern about deliverability in the face of regional utility outages.

In 2001, SheaHomes, a new national homebuilder in the United States, launched a high-end development in northern San Diego that was planned to include highly efficient homes incorporating solar water heating and, for one-third of the homes, solar electric (photovoltaic, or PV) systems as standard features. Although initiated by SheaHomes-San Diego, the project developed into a collaborative effort between the builder, state and federal agencies, equipment manufacturers, and other entities and stakeholders. The development was the first such offering of its kind in the United States; as it grew, it became a natural laboratory for comparative market, social science, and engineering research.

In collaboration with and support from the National Renewable Energy Laboratory (NREL), a multi-year comparative case study of market experience and response to the SheaHomes concept was conducted, as well as an analysis of associated energy consumption and costs—the largest and most comprehensive study of its kind. Results of the comparative case study hold important implications for the future of homes that, through energy-efficient design, proper orientation, and the use of solar features, will provide their own energy.

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