🔒Net-zero home market growth promising, but still a niche

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Homes that generate all of their own power through energy efficiencies and renewables represent an attractive market for specialized builders, but broad demand for them so far remains elusive in Connecticut, industry experts say.

New so-called net-zero energy homes represent a niche that is likely to remain small in the near term, said Steve Baden, executive director of the Residential Energy Services Network, which promotes and tracks the fledgling industry's progress.

Net-zero homes are energy-efficient buildings that use less, or the same amount of energy that is produced on-site through renewable sources.

There's been a 103-percent increase in net-zero homes nationally over a two-year period, but the numbers upon which that percentage is based are very small, Baden said.

Net-zero homes as well as Home Energy Rating System (HERS) houses, which are highly efficient but don't typically have renewables attached, increased from 91 units nationwide in 2013 to 185 in 2015, he said.

Energy and building experts champion the emergence of these newly built houses — often high-end homes that incorporate structural energy efficiencies, with energy-efficient appliances and heating and cooling systems, then add a major renewable source like solar power. But demand is minimal, so far.

“Standard building practices now are making homes much more efficient than they were 10 years ago,” said Eric Person, CEO of the Home Builders & Remodeler's Association of Central Connecticut in Rocky Hill. “And that's enough for demand right now.”

Spurring interest

In April, Eversource and its partners, which include the state Department of Energy and Environmental Protection (DEEP), announced its latest round of winning homeowners and builders in its sixth annual Zero Energy Challenge, which is a statewide competition that awards cash prizes to participants who build the most energy-efficient homes.

Jim and Phoebe Katzin's new, $190,000, 1,450-square-foot home on two acres in Litchfield tied for overall winner in the 2015 challenge.

Jim Katzin says planning for the future was a key component in the decision to build. The payback will make his home energy costs free in 15 years or less, he said.

“I was concentrating mostly on the economics of it,” he explained. “I was convinced in my head you could do a net-zero carbon footprint house at least as cheap as a conventional house.”

Today's net-zero homes, however, including others that won the challenge, tend to be pricier, costing $300,000 or more, builders say.

Nick Lehto, owner of Lehto Design/Build in Killingly, has built six net-zero houses in four years and another four that are “net-zero ready” if solar is added, he said.

High-End More Energy Conscious

“A lot of the customers who build a high-end home are a lot more educated about energy efficiency,” he explained. “I talk to the average person and they have no idea. But these high-end customers are seeking me out. The 'average Joe' may not see it as possible or affordable. Hopefully it will get to be mainstream one day.”

According to DEEP, the state provides a variety of programs that make financing for installing solar in a home attractive.

“There are some incentives in place now, but it seems like we need to be looking at more to encourage net-zero construction,” said DEEP spokesman Dennis Schain. “Some of it will be market forces. As the cost of technology comes down, it's better, more efficient.”

Gov. Dannel P. Malloy's Council on Climate Change has a goal of reducing carbon emissions in the state by 80 percent from 2010 levels by 2050, Schain said.

According to Enoch Lenge, Eversource's energy-efficiency spokesman, the number of builders in Connecticut who focus exclusively on zero-energy homes has increased from two in 2009 to as many as eight today. Another dozen or so focus on energy efficiency broadly, he said.

“There's a long way to go, but we've definitely seen a lot of things change in a positive way,” he said.

Zero Energy Challenge Goal

Raising awareness is the main goal of the Zero Energy Challenge, added Lenge.

“[The Challenge] is definitely influencing the market because it's giving builders an opportunity to challenge themselves to try and get as close to net-zero energy as possible and matching the consumers who have an interest with builders,” said Person, of the Home Builders association. “Is it moving the needle? It's hard to say. For us, it builds a positive environment for our builders to build in.”

To go mainstream, “it would have to take higher importance at the state and federal level,” Lenge said. “Right now what's important to building-code officials is safety. It would take training of the building officials and the builders to shift their mindset [about] what's important.”

Proposed incentive

Congress is currently debating a bill (the Sensible Accounting to Value Energy Act) that may help spur greater interest in net-zero homes by encouraging mortgage lenders to incorporate a homeowner's energy costs when calculating home-ownership costs, said Cliff Majersik, executive director of the Washington, D.C.-based Institute for Market Transformation.

“It would fundamentally change the economics of homebuilding so the more energy a builder could save a homebuyer, the more financing the buyer could qualify for,” he said.

The bill is part of a larger energy bill in the Senate that needs reconciliation with the House version. “By addressing that,” Majersik added, “you'll have home buyers who will be able to afford the net-zero home who couldn't before.”

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