ZEB and the Residential Construction Industry

ZEB and the Residential Construction Industry

Living off the grid used to be a concept familiar only to homesteaders, old hippies, and survivalists. Climate change has inspired a new generation of stakeholders who are advancing technology, research, and regulations and revolutionizing the concept. 

It’s no longer necessary to buy a plot of land, build a hay house, and install solar panels and a well, however, because residential builders have taken up the call to action. 

For example, firms like D.R. Horton Inc. (NYSE: DHI), DeNova, Lennar Corporation (NYSE: LEN), KB Home (NYSE: KBH), and Meritage Homes (NYSE: MTH) in Orlando are routinely adding solar panels to their homes, and the numbers of these homes have risen from 30,000 in 2006 to 400,000 in 2013. The DOE further suggests that such numbers could multiply by almost 10 in less than five years, reaching 3.8 million by 2020. 

The economics are certainly there. Thanks to falling solar panel prices, a 6 kilowatt system, with solar thermal heating and cooling, would supply more than enough electricity for the average home and cost about $30,000 (after the federal tax credit). 

Smaller, more regional builders have also entered the zero net energy homebuilding marketplace, some in spectacular fashion. One example is ATAPOP Homes, a cold-climate builder operating out of Whitehorse in the Yukon. 

Paul Girard, ATAPOP builder and proprietor, is deeply into the green living meme. His mission: to make portable and permanent building structures capable of a net positive carbon footprint for people living in the coldest and most challenging climates. His method focuses on the building envelope. 

“In order to achieve Super Energy Efficiency one must master the science of building. Maximum insulation values, perfect air tightness, quality and durable high performance materials, and efficient heating and cooling devices combined with proper ventilation are the keys to a successful and healthy home.” 

Asked where this green building paradigm is likely to be in five years, as plunging oil prices lower the cost not only of transporting goods but of heating homes, Paul’s message was reassuring. 

“Even if major builders continue with business as usual, this kind of building for the future will grow to be a movement full of like-minded people, and they will move forward together to make the kind of change (that is needed).” 

Another zero-net energy builder is Deltech Homes of North Carolina. Deltec President Steve Linton – a LEED-accredited professional – is convinced that the company’s highly energy-efficient structures will set the cost and energy footprint standard for years to come for homes built in warmer climates. As Litton noted in 2013: 

"We always hear about decreasing the environmental footprint, but less bad is still bad. We wanted to produce something that gives back to the environment. This collection does that by creating as much energy as needed through clean, renewable energy." 

Litton also focuses on the building envelope, using 1 inch of exterior insulation, an “Airblock” gasket system, double-stud walls, and insulated headers over windows and doors – “green” features and products that have propelled some companies to doubling and even tripling production (and shareholder value) over just a few years. 

Both Paul Girard and Deltech Homes offer custom-built and “kit”, or prefab homes, all with energy efficient, clean-energy options. 

According to the TecHome Builder Market Pulse Survey, 24 percent of homebuilders who took our survey say they plan on including solar panels on their new homes in 2015, and 70 percent say they plan to offer solar as a standard feature by 2016. 


ZEB Impacts on Existing Industry 

In 2014, the U.S. used almost 4 billion megawatt hours of electricity. Of that, 35.3 percent went to commercial buildings and residential structures. Transportation and manufacturing consumed the balance, with an 11-percent loss factor in transmission and distribution. 

Residential use comprised about 19 percent of generation. Even if electric utilities were to lose the entire sector, the impact would not be huge. Bloomberg suggests a loss of about $2 billion if one million homeowners installed rooftop solar. 

The upside, for the environment, is a gradual lowering of CO2 emissions, in spite of continued economic growth. For utilities like Xcel Energy (NYSE: XEL), that have been in the renewable energy game almost from the start, it means a changing – but still robust – business model, and one to which “load defection” merely signals a change in play. 

Xcel has already managed to decouple coal from its generation mix by converting to natural gas at Black Dog, High Bridge, and Riverside. It also plans to convert Sherco Units 1 and 2 to gas, before or by 2030. When that conversion is complete, Xcel will have only two coal-fired plant in operation, Sherco’s Unit 3 and the Allen S. King Plant. Similar coal plant shutdowns and conversions are taking place in Colorado and elsewhere in Xcel’s service territory.

For more information on ZEB, see yesterday's Entelligent article: The Ultimate Energy Paradigm 


Companies to watch 

D.R. Horton Inc. (NYSE: DHI), which bills itself as “America’s Builder”, holds the record as the largest builder by volume in the U.S. for 14 consecutive years. In spite of some negative reports, Horton’s stock has continued to climb, if only incrementally.   

Lennar  Corporation (NYSE: LEN), one of America’s major homebuilders, and one of only about a dozen committed to the Zero Energy Building paradigm. Based on the success of their first solar communities in Roseville, California, the company decided to include photovoltaic (PV) solar as a standard feature of all their future communities. 

KB Home (NYSE: KBH), out of Los Angeles, saw its 2015 profits fall in spite of a double-digit gain in new home orders. After an initial strong start in the 1980s, the company overbuilt, earning itself some bad reviews. Analysts now recommend KB as a hold until its profit margins rise.

Meritage Homes (NYSE: MTH) got its start as a zero net energy builder in southern California, in a community called Sierra Crest. The project was led by the nonprofit Electric Power Research Institute (EPRI), and included BIRAenergy, Itron (NASDAQ: ITRI), Southern California Edison (NYSE: SCE) and the California Public Utilities Commission (CPUC) as design/build participants. 

For a complete list of ZEB builders, designers, architects and certification programs, please visit: http://www.artemisiacabin.com/blog/2015/8/20/90-net-zero-energy-home-resources

Jeanne Roberts is an award winning freelance writer covering the environment, sustainability, social justice, health, politics, and the natural world. She has roots in the corporate world as a California reporter and a communications specialist at a large public utility and has spent the past 10 years working as an editor for a small-cap stock site, and as an environmental/political/social justice blogger for The PanelistCelsias,Cooler PlanetDeSmogBlogEnergy BoomSolveClimate.com, the Clean Tech Blog,EarthTechling, and various other online publications. Ms. Roberts has written a book on alternative energy sources, sustainable home building, and environmental initiatives for homeowners available on Amazon. 


Originally published on March 23, 2016