Photo of a house shape fashioned out of bands of green, yellow and red plastic that look like the HERS rating table with the caption "Net-zero=affordable" because net-zero homes are affordable to build.

You might think that the cost to build a zero-energy (ZE) or zero-energy ready home (ZERH) is much higher than the cost of a traditional dwelling. But an exciting report by the Rocky Mountain Institute reveals that this simply isn’t true. Across the country, building to zero-energy standards only costs from one to eight percent more up-front than simply building to code. Net-zero homes are, in fact, attainable.

“This often gets politicized. … But the point is these types of homes have many benefits that appeal to many people. Our report is helping people who don’t realize how feasible this is.”

— Jacob Corvidae, principal at the Rocky Mountain Institute

And while zero-energy homes currently make up only a tiny percentage of available housing in the U.S. and Canada, the Net Zero Energy Coalition reports that the trend is growing.

Their 2018 inventory, which counts zero-energy single and multi-family homes (completed, in construction, or in design), found only 13,960 units at the end of 2017. By the end of 2018, though, that number had grown to 22,146 – an increase of 59 percent!

How Technology Is Making Zero Energy Homes More Affordable

This story from the Colorado Sun includes some of the details that make zero-energy construction feasible. Technology is constantly improving, not only for home features (like combination heating, cooling and water heating systems), but also for the construction process itself. 

Some higher-tech materials may cost more but shorten construction time overall, helping to keep costs under control. Nathan Kahre of Thrive Home Builders notes that better training – to get construction crews up to speed on new technology – is also key to successful net-zero projects.

“Affordable housing has essentially evaporated in America. Traditional site-built, stick-built housing is broken. It doesn’t work anymore. What does work is… Smaller footprints, high quality and net zero.”

— Sprout Tiny Homes CEO, Rod Stambaugh

It is true that some of the high-performance and energy-efficient features of net-zero homes can often be expensive. However, there are numerous strategies that can be used to minimize this additional cost.

These strategies will ensure that your net-zero, energy-efficient home does not put a major dent in your wallet. If you can implement them properly, you will have a net-zero home that is only slightly more expensive than properties of a similar size that were built to code. Moreover, such a net-zero home will save you a lot of money in the long term, in the form of lower energy bills.

Some of the factors that will affect the cost of your net-zero home are as follows:

  • The materials used for construction
  • The methods and speed of construction
  • The types of electrical appliances installed in the property
  • The type (and amount) of lighting
  • The methods used for insulation and temperature regulation

Keeping an eye on all of these aspects of the net-zero project will ensure that the building costs do not spiral out of control.

There will be changes and additions you need to make on your property to make it a net-zero home. These include the heating and cooling equipment, the energy-efficient building shell, etc. But net-zero options will only increase the overall cost by about 4 percent.

Installing the solar panels that will generate the energy used by your net-zero home will further increase the cost, until it is 8 percent higher than a comparable, non-energy-efficient property.

The slightly higher construction costs for your net-zero home will be easily offset by the lower (or nonexistent) utility bills that you will enjoy, for many years to come.

Decorative photo of a miniature model of a house under construction with half the roof missing and rolled-up full-size dollar bills sticking out. Cost need not be a barrier to constructing net-zero homes.
There are a lot of effective strategies for building affordable net-zero homes.

Keeping Construction Costs Down

According to the aforementioned study by the Rocky Mountain Institute (RMI), constructing a net-zero home is only slightly more expensive than constructing one that is simply built to code. But the costs involved in building a home to net-zero energy standards can be further reduced by implementing a few simple strategies.

1.     Use Energy Modeling

You can minimize the cost of your net-zero home by using energy modeling methods to choose the most affordable and cost-effective materials, appliances, and energy-saving techniques. Energy modeling is simply the process of identifying the most cost-effective energy-saving features.

Builders and real-estate developers frequently make use of energy modeling software to find the least expensive modifications that will take them closer to their goal of creating a net-zero home.

Energy modeling will help you analyze the impact that different design choices have on household energy consumption. With energy modeling, you will be able to make efficient, informed choices regarding the relative energy efficiency of an air source heat pump versus a ground source heat pump, for example.

You will also be able to compare the potential energy impact of R-30 and R-60 wall insulation, to determine which of the two will be more cost-effective in the long run. You can start the process of energy modeling as soon as you have a preliminary design for your net-zero home, including a basic floor plan, dimensions, and elevations.

2.     Build Small

Building a smaller and more compact residence is perhaps the simplest way to make your net-zero home more affordable. Average homes in the United States are about 2,400 square feet in size.

Simply reducing the size of your home by 300 square feet will allow you to save over $45,000 on the entire project, assuming the cost of construction is $150 per square feet. This amount will easily cover the up-front cost premium that you’ll have to pay to start building your net-zero home.

With carefully planned out storage and functionalities, a smaller home will also help you save energy. You will need fewer light fixtures to illuminate the small living space, and temperature regulation is also cheaper when the rooms are small and well-insulated.

3.     Financial Incentives

The federal as well as state governments offer numerous tax credits, loans, and other financial incentives, to help offset the cost of building energy-efficient homes. Many local banks now offer Energy Efficient Mortgages (also known as EEMs) to those buying net-zero homes.

This type of mortgage allows potential buyers of energy-efficient homes to add up to $6,000 to the loan amount for which they would normally qualify.

Other financing options include a $2,000 tax credit on net-zero homes built before 2022, a Residential Energy Efficiency Tax Credit for electrical equipment upgrades in existing homes, and the Weatherization Assistance Program (WAP), which aims to increase the energy-efficiency of homes in low-income areas.

To learn more about the tax credits, loans, and other financing options available in your part of the country, you can check the DSIRE website, which is the most comprehensive source of information on energy-efficiency financial incentives in the U.S.

Concluding Note

With the government-sponsored financial incentives for net-zero homes – along with some careful planning and cost-conscious design – you will be able to build a net-zero home that costs a mere 5-6 percent more than its non-energy-efficient counterparts. And you will begin to reap the benefits of your net-zero design as soon as you step into your new home, in the form of low energy bills and higher property value.

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