Implementing a full-scale Zero Energy Building policy is a huge challenge, full of difficulties.
But we can overcome them, and make Zero Energy Buildings a reality. It’s our future that is at stake. If we want to stop climate change, we have to support and extend the existing Zero Energy Buildings projects – the UE project, or the Californian – to other parts of the world.
In the end, we all will win, including our economies.
Benefits of zero energy building projects
Net zero energy homes, schools and other buildings will be more comfortable, will not produce CO2 emissions, will free-up electricity for the industry and electric vehicles and allow building owners and occupants to pay less for the energy.
And will offer a wealth of business opportunities for real estate owners and investors and designers, as well as business services associated with buildings and energy networks, or product suppliers (businesses related with energy efficient windows and doors, insulation products, high-efficient equipment, solar panels, and so on).
It’s a multi-million dollar business, literally – a business involving billions of existing and new buildings, and a large fraction of the energy sector. Zero energy buildings will phase-out thousands of fossil-fueled and nuclear power plants, and their replacement represents endless opportunities to renewable electricity projects and businesses.
A huge quagmire
But we should not minimize the importance of up-front costs, lack of information, short-term interests, market failures or ingrained conceptions.
Building homes, schools, hospitals or offices with high levels of thermal insulation and other energy-efficiency improvements will involve higher initial costs (10 to 20%, say), which makes the shift to Net Zero more difficult. The investment can be recovered in, say, 10 or 20 years, through energy savings, but without proper upfront funding, the change will be hard to achieve.
And there is also issues such as the conflicting interests of renters and building owners: renters have no incentive to improve buildings that are not theirs, while owners may not have incentive to make buildings more energy-efficient and comfortable.
Or issues such as the inertia, lack of information or the foolish dreams of large-celebrity-style homes.
Or issues related with cost-competitiveness: the prices of solar photovoltaic systems or insulation packets will only drop significantly in large-scale projects. Without large projects and partnerships involving banks, investors and product suppliers, the costs of Zero Energy projects may skyrocket.
Big Zero Energy Building projects & Partnerships
The installation of solar photovoltaic systems on rooftops is a good example of the difficulties that Zero Energy Building projects will face, and also an example of how to overcome them.
Solar panel prices have dropped sharply, but there are other costs – licenses, funding, permits, inspections, site preparation and attachments, the wiring system, the transformer, the inverter… - that can make PV systems expensive.
The solution? Large scale projects and partnerships involving city governments, banks, large solar installers…
Big installers can reduce costs to a fraction through standardization and large scale installation; and with the help of city governments they can reduce costs like licensing, permits and inspections. On the other hand, their partnerships with banks enable them to pool large amounts of capital and offer leasing systems: owners do not have to pay the upfront costs of installing a solar PV system on their buildings.
This type of partnerships and large-scale investments can serve as a framework and a guide for Zero Energy Building projects.
The traditional financing approach – in which owners take charge of the process of implementing and financing the retrofitting of the building and its improvements – is not expected to generate significant results. The market alone will fail to allocate resources in an efficient way (see infographic Market failures).
The buildings' owners will not be attracted to such projects in significant numbers if they have to pay in advance the up-front investment.
The best funding models involve the financing of the up-front investment by the utility company or by the retrofit provider or by solar leasing companies. The owners of the buildings do not have to implement, or to design the improvements, or to make any up-front payment. And they will not have to pay more on a monthly basis for the energy they use. The utility company, the retrofit provider, the solar leasing provider or whatever the company or the organization behind the funding is paid by the energy savings associated with the underlying investment.
See these infographics:
They install the solar panels on your roof for free
Slash solar electricity prices
US military like solar
Solar is affordable for large companies
Solar power depends on city governments
The biggest solar installer in the US
Most critical step before installing solar