Making Net Zero Energy a Reality

Operating a net-zero multifamily property is a goal that is within reach with budding technologies and realistic financing plans.

Solar thermal at ecoFlats

In Portland, Ore., Jean-Pierre Veillet recently completed ecoFlats, an 18-unit apartment community that is working with Oregon Energy Trust in pursuit of a net-zero standard. Veillet, founder of Portland-based Siteworks Design|Build, has done what many in the industry say is, if not impossible, then certainly very difficult: He has built net zero without any added expense.

“We are trying to deliver net zero for standard costs,” he explains. “We are not adding costs to the pro forma; we take the rents of the neighborhood and try to redesign what goes into a building in order to afford renewable energies.”

Defining net zero

There are multiple ways to define net zero, according to the U.S. Department of Energy (DOE), whose goal is to create the technology and knowledge base for cost-effective, zero-energy commercial buildings (ZEBs) by 2025.

“You can define net zero as how much energy within one year a building uses, versus how much it produces,” says Ilana Judah, Int’l Assoc. AIA, LEED AP, BD+C, director of sustainability at New York-based FXFowle Architects LLP, which has designed two net-zero commercial projects.

“The difference should be zero or net-positive, which means [the building] would produce more energy than it uses throughout the course of the year,” she explains. While a building may consume more energy than it produces at certain points of the year, it can produce a surplus at other times.

Net zero can also be defined by source energy, which is “a building that produces and exports at least as much renewable energy as the total energy it imports and uses in a year, when accounted for at the source,” according to the DOE.

“When you actually draw 100 kilowatts off the grid, there is a factor that, let’s say, approximates a factor of three,” Judah explains. “In order to draw 100 kilowatt-hours from your receptacle, the power plant would need to produce 300 kilowatts because there are all sorts of loss and transmission factors and inefficiencies.”

A third way to define net zero is according to energy costs. This situation occurs when the amount that a utility pays the property owner for the energy the building exports to the grid is at least equal to the amount the owner pays the utility for the energy used over the year.

Finally, net-zero energy emissions occurs when “a building produces and exports at least as much emissions-free renewable energy as it imports and uses from emission-producing energy sources annually,” according to the DOE, which also points out that the definition the team agrees upon will affect the design of the project (see table).

Striving for net zero

Encouraging energy efficiency is the first step to achieving net zero, and reducing energy consumption should begin during the construction process. One innovative method that has recently garnered some attention is the use of goats to clear the land. Because they can work on any terrain, goats are an extremely eco-friendly and low-cost (though somewhat more time-intensive) alternative to large, gas-guzzling machinery, as Machen Advisory Group discovered during work on a new office building in Charlotte, N.C.

A more traditional method to reducing energy during construction is off-site prefabrication. San Francisco-based ZETA Energy Communities, which builds net-zero, cost-effective structures off-site, produces its communities in an efficient “factory [that] runs on clean energy provided by our local utility,” notes Shilpa Sankaran, cofounder and vice president of marketing for ZETA.

Reducing efficiency on-site doesn’t have to be expensive or difficult, though, says Dimitris Kapsis, vice president, energy management solutions at American Utility Management (AUM), who points to lighting retrofits as one of the best ways to increase efficiency. Even for those properties that performed a retrofit as recently as five years ago, he notes, there are many more product options on the market today.

Preventative maintenance and equipment-monitoring are also key low-hanging fruit, he adds. “By monitoring the changes in the internal and external environments, you can easily adjust your equipment to react to those changes in a more efficient way,” he says.

It is critical to define the goals of the project, including its boundary conditions and whether or not this area, which is often larger than the building itself, “should be considered for on-site renewable energy production,” according to “Zero Energy Buildings: A Critical Look at the Definition,” a 2006 white paper put out by the National Renewable Energy Laboratory (NREL) and the U.S. Department of Energy. Oftentimes, only the area within the building’s footprint may be used for on-site energy production, but some municipalities have solar access ordinances.

Challenges to designing a net-zero building stem from both climate and building type, according to many experts; some projects are much more conducive to achieving net zero than others. Regions with more temperate climates, for example, are better suited for the design of net-zero projects, as heating and cooling requirements are not as demanding. Furthermore, these climates provide greater opportunity to utilize daylighting.

But Veillet, whose project is located in an admittedly temperate climate, doesn’t think these are good excuses. “Understand the building [you’re] doing and its specific geographical location, its orientation,” he advises. “Do we need to hyper-insulate a building in the Northwest? No. We need to understand where we are; stop building glass towers in the deserts and start building buildings that are appropriate to where they are geographically located. That will save a ton of money.”

In terms of the building’s physical characteristics, a large site with a relatively low building height provide the greatest opportunity to generate renewable energy, notes Judah, as roof areas tend to be more generous for the placement of solar panels. But high-density multifamily communities may pose a greater challenge, as roof space, and therefore PV potential, becomes limited at that point, Sankaran points out. Shading issues associated with higher density communities may also make PVs less effective.

At ecoFlats, Veillet shifted the apartments to one side of the building, with exterior entries on all floors. All common areas are exterior, eliminating the need to heat, condition or light these spaces. Daylighting, LED lighting, natural ventilation and a 21-kilowatt PV array, which, Veillet says, “more than exceeds the entire usage of the building,” generating up to 12,000 gallons of 180-degree water per day, top it off. The main idea, he says, was to “eliminate the assumed necessity for certain energy-consuming devices.”

Even with a large site and a climate that’s reasonably temperate, the greatest challenge for multi-housing communities is engaging residents and having a proper facilities person on-site who can manage the process, says Judah.

“You really have to have everyone engaged—not just the people who are building it, but the people who are using and operating the building,” she adds. “There has to be a very holistic approach with respect to the user group.”

With that in mind, Veillet has installed monitors in the ecoFlats mailroom that show residents how much energy the community as a whole is consuming, as well as how individual units compare to one another.

“Positive reinforcement is a simple answer,” Veillet says. “We incentive people hitting their baseline and a community as a whole achieving the baseline. We are trying to positively reinforce the idea that if we get there together, there’s a pot of gold at the end of the rainbow.”

Moving forward

While billing residents directly for their energy consumption will certainly make them more aware of how much they are using on an individual basis—and, in turn, likely decrease their usage—the owner or operator often doesn’t know how much his property is consuming as a whole.

At ecoFlats, however, “we’ll learn a lot about how people really use energy and how they need to use it,” Veillet points out. “We’re going to gather data to answer the question: How much energy do we really need to consume per household to support a good lifestyle?”

To know whether a building has actually achieved net zero, the owner or operator needs to know the property’s starting point. But, Kapsis adds, privacy laws dictate that “the utility does not have to provide you [with the information about] what your residents are using,” he adds.

“Are there solutions for owners? There are a few, but it will require capital outlay from the owner to install central submeters to be able to … quantify what the entire property is using, without knowing what each individual apartment is using. It’s doable, but will an owner do this just to collect total usage for their property?”

For multifamily communities, net zero will remain difficult to accomplish as long as owners remain unable to quantify their carbon footprints. Even with rebates for energy-efficient upgrades, whoever provides the upfront capital will likely require a quantifiable result.

“You might have to start stepping on peoples’ toes as far as privacy, but an important legislation could be every single property … should have a central meter, which is prior to all the other submeters, that could identify how much usage that particular property has and [its] impact to the electric grid or the natural gas grid,” Kapsis suggests.

“Data is king. If you don’t know what you have, you don’t know where you’re headed, and you definitely don’t know whether you have succeeded with the projects that you’ve accomplished,” he adds.

At the same time, more and more legislation is moving toward achieving a greater level of energy efficiency. In order to achieve the challenge set up by Architecture 2030, a nonprofit established in response to climate change, which asks the building community to adopt certain reduction targets (70 percent in 2015, 80 percent in 2020, 90 percent in 2025 and carbon-neutral in 2030)—“many municipalities have established carbon-emission reduction goals by 2020 or 2030,” Judah adds. “It’s the bar that things are being set to at this point.”

What’s more, ASHRAE standards have become significantly stricter each year, says Judah. The 2010 standard, for example, jumped significantly in terms of energy reduction requirements. (More than 30 percent energy savings can be achieved using the 2010 version of Standard 90.1 versus the 2004 standard, according to ASHRAE.)

While the industry has certainly taken great strides toward increasing energy efficiency across the board, Judah points out that community planning is just as critical. “We have to think about net zero not just within the boundaries of the building,” she notes, “but really within the context of the community and how much energy we are using to get from place to place.”

Net zero for zero added cost

The goal of ecoFlats in Portland, Ore., which opened for occupancy in the beginning of March, was “to deliver net zero for standard costs,” says Jean-Pierre Veillet, founder of Siteworks Design|Build. But with everyone saying that it costs more to be green, how was this possible?

Veillet credits having complete control of the design, construction and development process as a tremendous benefit, which allowed his team to make many of the “little decisions” along the way. For instance, rather than accepting that LED lights were too expensive, the team at Siteworks shopped the products until they found something that met their affordability criteria.

“Design is very important and has to be appealing,” adds Veillet. “It also has be built with standard skills [in mind] … instead of implanting gizmos that may or may not work for people.”

The City of Portland has a variety of programs that encourage transit-oriented development, low energy consumption and LEED-certified building structures. According to Veillet, Portland provided “very-low-interest money on gap financing,” which includes no interest during the construction period and up to six months after, followed by 3 percent interest loans, “which looks like equity to banks” and lowers the LTV for them.

Additionally, Oregon Energy Trust, which created the Path to Net Zero pilot program, provides incentives for net-zero site energy buildings, including $10,000 for early design assistance and up to $0.10/kWh and $0.80/therm, based on the energy savings calculated in the energy studies, up to a cap of $50,000. Installation, monitoring and reporting incentives are also available.

“Some of this—PVs, solar—doesn’t cash flow on a pro forma,” Veillet acknowledges. “It’s more [about] investing in future technology and betting that costs will be more significant for energy in the future.”

Finally, Veillet received transferable business energy tax credits through the Oregon Department of Energy. “If you have a depreciable asset like a building, and you may not see any value in the energy tax credits that you get for doing this sort of development, you can sell them or trade them to people who might find value in it,” he notes. “It’s complicated, but it does pencil out for businesses that know they will be in business for the next five years. They can get a tax deduction for purchasing these kinds of credits that we generate.”

While the bank expected lease-up of ecoFlats to take 12 months, Veillet projects that it will be fully absorbed within 60 days of opening, based on recent trends. “People are entering the rental market in order to live here,” he observes.

Those interested in the project are already embracing an eco-friendly lifestyle. “By creating this project,” Veillet adds, “[we’ve] preselected who will live there. It’s not closed to anyone, but there’s a wave of interest from people who are conscientious in trying to do the right thing.”

To comment, email Erika Schnitzer at