Photo courtesy of Solid Green Systems

ZNE Homes: Comparing Costs With their Conventional Cousins

By Ann V. Edminster, M.Arch., LEED AP

The burning question I hear most often about zero-energy (ZE) homes is, “How much does it cost to build one, compared to a conventional home?” Most recently, this has come up in the context of design of the Zero-and-Beyond case study database that NZEC is developing in collaboration with NESEA. Of course, we would love to be able to report on costs.

I’ll comment on that eventually, but first I’d like to take a few detours into related topics.

Asking the Right Question

I believe that “How much [more] does it cost?” is the wrong question to be asking, because it perpetuates an ‘add-more’ mindset, when instead we need to be fostering a mindset of innovation and performance. With that goal, I propose that we ask a different question, one that will go much farther towards advancing the practice of zero-energy building: What changes to design are needed to build zero-energy homes and stay within budget? Whereas the answer to the first question is inevitably some dollar amount, or a percentage, the answers to this question are entirely different. For example:

  • Simplify the building form to save on framing lumber, allow for better air sealing and insulation, enclose more space at lower cost, simplify and downsize the mechanical system, and provide more roof space for solar; or
  • Build a smaller home; or
  • Choose more modest finishes; or
  • All of the above.

In fact, our case study research indicates that these are practices that frequently distinguish ZE homes from their garden-variety counterparts, and allow ZE builders to operate profitably while producing superior products.

Cost Is a Red Herring, Anyway

The core issue isn’t really cost – it’s builders’ ability to compete. The worry is that if building a ZE home costs too much, the builder won’t make enough money to survive in the market. Based on the successes of ZE builders I’ve met to date, I believe this concern is misplaced, for the simple reason that they are building something for which there is a market; small now, perhaps, but sufficient – and there is clear evidence that it this market is growing at a healthy pace.

In simplest terms, I see two different market stages for ZE home construction:

  • innovator/early adopter market
  • mature market

In the innovator/early adopter market stage – where we are now – there is no extra cost because ZE is a planned goal and thus has to be provided within budget. In other words, no one is building ZE homes on a whim – they are purpose-built, with zero energy as an integral, non-negotiable goal. This is true both for custom projects and for speculative ones. In the latter case, the builders have made an informed business decision to build ZE homes – whether as a loss leader, a learning exercise, a demonstration of leadership, or to target a niche class of buyers. All of us who are in business know that we must adapt and embrace changes in practice over time in order to remain relevant and vibrant. ZE is a brilliant change some visionary builders have embraced – and the data we have accumulated to date suggest that as a class, they are thriving.

In a mature market, ZE will be the status quo – it will be ubiquitous — and therefore won’t cost more. Green affordable housing provides an excellent illustration of this type of transition. Some years ago, affordable housing developers – even those who were very green-leaning – had a very difficult time incorporating green strategies into their projects, because upgrades meant diverting funds from the pool available to build more units. Then, where green features became a prerequisite to compete for funding and incentives, lo and behold, affordable housing greened up accordingly.

In the face of market forces that require the building community to meet higher standards, ‘Resistance is Futile.’ That day is coming, and not too distantly, for zero-energy housing.

Back to the Original Question

If we weren’t so busy answering other questions, and we actually wanted to answer the ‘how much’ question, could we? For better or worse, answers are highly elusive, because there are myriad conditions that affect construction cost.

First, a meaningful comparison requires two nearly identical homes, one ZE and one non-ZE: same neighborhood, same size, number of bedrooms, general feature set, etc. Then factor in fluctuating costs of materials, worker mobility, the influence of labor supply and demand on labor rates, and a host of other wild cards; all these variables make it virtually impossible to compare costs of two different homes in any meaningful way – particularly given we’re talking about significant differences in performance.

There are also issues in cost interpretation and reporting. Many builders are reluctant to divulge cost information, or may not report it in a way that is comparable. I encountered this problem recently while serving as a judge in a housing awards competition that required the builders to provide cost data. The data were highly divergent from builder to builder — it was clear that they were not all looking at costs in the same way and thus the data could not be compared.

But supposing a side-by-side comparison were feasible – e.g., a controlled study, with a gracious developer who was willing to provide transparent data for two nearly identical homes, one ZE and one non-ZE, built at the same time. Even that would be problematic, because when ZE performance is an ‘add-on’ to an otherwise conventionally designed home (i.e., little thought given to building geometry, orientation, resource efficiency, etc.), it will always cost extra.

In reality, ZE homes are most economically built with very deliberate attention to how the design must support the energy performance goal. When that is the case, zero energy can actually be achieved without any addition to the cost … even accounting for the renewable energy system.

This may sound far-fetched, but it isn’t. Consider two homes built in the same general locale, at the same time, with the same budget, but differing levels of finish. The home with the higher level of finish must differ in some important way: it may be smaller, more efficiently designed, or have a simpler overall geometry. This principle has been well-documented in Sarah Susanka’s best-seller, The Not So Big House. Achieving zero energy is just the same, but rather than trading off finish quality, the trade-off is performance quality.

Bottom Line 

Now I’ve convinced you, I’m sure, that the cost question should be moot, yet curiosity on this point seems to be insatiable. So the next time you’re asked about the cost of a zero-energy home, answer a different question. Expound on the virtues of a zero-energy home: it performs better, provides a larger set of services, and allows the homeowner to reallocate a large chunk of the energy budget to a personal, onsite utility. Shift the conversation to the values a zero-energy home delivers: comfort, energy security, long-term savings, health, and an environmentally responsible, future-oriented lifestyle. Answer the question that should be asked.

Ann is the author of Energy Free: Homes for a Small Planet and a member of NZEC’s Advisory Board.