Business Case for Zero Net Energy Buildings

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What is the business case for zero net energy buildings? How can they be justified in today's economic climate? Find out with my take on how to make a business case for a building that uses no net energy from the grid each year.

Transcript of Business Case for Zero Net Energy Buildings

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Jerry YudelsonYudelson Associates

2011

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Take-Aways

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Importance of Building Green

In the year 2035, 75% of the built environment will be either new or renovated, vs. 2005.

We can dramatically transform our energy use and CO2 production by constructing and renovating all buildings to ZONE standards.

McDonalds Corp. HQ

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Our Opportunity to Build Green

Current US building stock is approx. 300 billion sf.

Over the next 30 years:

• 52 billion sf will be demolished• 150 billion sf will be remodeled• 150 billion sf will be new construction

Starting 2005, by the year 2035, three-quarters of building stock

will be new or renovated

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Life-Cycle Positive Solution

Building energy efficiency is the only Life Cycle Cost-positive solution

25% of total carbon solution can come from buildings, including homes, stores, offices, hotels, institutional buildings and other structures

Choosing GreenChoosing GreenChoosing Choosing GreenGreen

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Defining Zero Net Energy

• In general, building energy use from all operating demands will be equal (or less) on an annual basis than energy generated by on-site renewable sources– HVAC– Electrical– Lighting– Water Heating– Plug and Process Loads

• Buying power from green sources doesn’t count!

• Seasonally, most buildings demand more power than they produce in winter and generate more than they use in summer

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Hierarchy of ZONE Definitions

• Building energy use from all operating demands will be equal (or less) on an annual basis than energy generated by on-site renewable sources that are connected to the building’s energy systems– Within building footprint (the best!)– On the site but not all within building footprint (e.g., Parking

structures, ground-mounted, etc.)

• Generated from combustion of renewable sources (e.g., biomass) and some on-site solar thermal/electric energy

• Generated from off-site renewable sources

Source: S. Pless and P. Torcellini, NREL/TP-550-44586, June 2010

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Is It Even Possible?

• Of course! BUT…

• Solar AC generation ranges 1200-1800 kWh/KWp in U.S.

• If a 110,000 sq.ft. building uses 1.5 million kWh/year, will need a 1000-kWp system to get net zero– Actually, need solar thermal also, for hot water needs

• Cost $5 million +/-, or ~$45/sq.ft., net of incentives

• Still an expensive proposition for a typical office– Living Building Challenge requires this result– Most LEED buildings get to ZONE only by buying green

power from outside sources

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Business Case for ZONE

Finance & Economic ROI

Role of incentives

Risk mitigation

Marketing & PR

Building value

Productivity & health

Recruitment & retention

Sustainability reporting

Ohlone College, Newark, CA

LEED

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Who Benefits Most?

Government offices

Corporate offices

Commercial offices

Universities

Research Institutions

Schools

NGOs

Retail/Hotel/Healthcare?

NREL RSF, Golden, CO

LEED

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A Closer Look at Building Types

• Owner-occupier-operator is easiest– Recoup costs from myriad benefit streams– Government/corporate/NGO– University/school

• Commercial multi-tenant offices– Harder to justify higher costs with higher rents– Works when energy use disclosed and rated

• Other building owner/types not so good– Healthcare– Hotel/hospitality– Retail (maybe with iconic windmills?)

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Issues?

• How to overcome first-cost concerns

• How to demonstrate cost-effectiveness in financial terms– ROI– Increase in Building Value– Risk Mitigation– Intangibles

• Fundamental concern over actual building performance– Projects need continuous commissioning– Renewables have to work as planned– Behavioral issues & plug loads must be managed well

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Trends?

• Low-energy building design know-how widespread– Cost premium getting smaller

• Codes getting ever more stringent (e.g., ASHRAE)– Reduces first-cost premium

• Solar cost reductions/efficiency gains

• Conventional energy costs have to increase

• Carbon accounting by many organizations

• Perceived and actual value of green buildings going up

• These are all positive!

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The Future is Green!

If you want to score, skate to where the puck is headed, not where it is now

Ask yourself and your clients: how will buildings have to operate in 2015?

What is the Next Normal?

Design, build & operate accordingly!

Sidney Crosby, Pittsburgh Penguins2009 Stanley Cup Winners2010 Olympic Champions

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Jerry YudelsonYudelson Associates

Keep In Touch:www.greenbuildconsult.com