Zero Peak Communities beforeZero Energy Homes

Lew W. PratschLew W. PratschBuilding America

ProgramU. S. Dept. of Energy

(202) 586-1512

Colorado Utility EfficiencyExchange Conference

Aspen, ColoradoOctober 15-17, 2008

Why Buildings? 40% of US energy, 72% of electricity,55% of natural gas, 39% of carbon, 19% of NOx, and52% of SO2 emissions

Construction and renovation accounts for 9% of GDP and employs 8 million.Energy utility bills total $370B each year.

Construction and renovation accounts for 9% of GDP and employs 8 million.Energy utility bills total $370B each year.

Source: Buildings Energy Data Book, September 2007, Tables 1.1.3, 1.1.6, 3.1.1, 3.3.1, 4.1.5, 5.1.2, 5.3.1

Total US consumption in2005 was 100 Quads

U.S. DOE Secretary Samuel Bodman Announces BuildersChallenge at the International Builders Show

Secretary Bodman posts the first E-Scale on the Palm Harbor GreenHome in the Professional BuilderShow Village at the InternationalBuilders Show.

NAHB’s Bob Jones shakes theNAHB’s Bob Jones shakes theSecretary’s hand and helps to launchthe Builders Challenge.

February 14, 2008, Orlando , FL – U.S.DOE Secretary Bodman posed a challengeto the homebuilding industry – to build220,000 high performance homes by 2012.

Homes that qualify for the BuildersChallenge must be between 70 and 0 on theEnergySmart Home Scale (E-Scale) andmeet the Builders Challenge QualityCriteria.

The E-Scale allows homebuyers to understand – at a glance– how the energy performance of a particular home compareswith others.

Building America Approach

Building America Teams -- Leading experts inbuilding science and system engineering offerhome builders cost-shared technical support– Whole house energy design assistance by climate– Whole house energy design assistance by climate

– Energy modeling

– Performance specification writing

– Training, workshops and monitoring

– Prototype homes + subdivisions

– Access to Building America research

• Building America’s Best Practice series on web

Systems(“whole-house”approach)System IntegrationDuct sealingCombustion testing

RenewableEnergyPhotovoltaicsFuel Cells, Solar

Building America Energy Designs

BuildingEnvelopeInsulation,Windows,Walls, FloorsAir sealing

Fuel Cells, SolarHot Water,Geothermal

EquipmentHVAC equipmentLightsAppliances

Reduce total building energy use by 60–70 percentHighly efficient, cost-effective lighting technologies, air sealing

advanced windows, appliances and space heating and cooling technologies.

Moving Toward Zero EnergyHomes

• ZEH--Homes that are highly energyefficient and produce all their ownenergy—annuallyenergy—annually

• Today’s marketable ZEH—cut energyuse at least 50% including energyefficiency & renewable energy

• Tomorrow’s ZEH—Energy savings of 60-70% plus 30-40% on-site renewableenergy

SheaHomes

• First major production home builder in Nationto build Today’s ZEHs as standard in asubdivision– 306 homes sold out one year earler– 306 homes sold out one year earler– Shea Homes appreciated faster– More profitable to offer as standard than as option– If builder, utility or major manufacturer provides

warranty, buyer accepts

• Shea Home Features– Homes about 40% better than Title 24– All have solar water heaters– 120 have 1.2 kw or 2.4 kw of PV (about 25

upgraded)

• Major statistically valid study completed

SheaHomes, San Angelo, SanDiego

Bill Savings vs. Comparison Homes(Actual Gas & Electric Utility Bills)

Home CategoryAvg.

Monthly Bill%

SavingsHome Category Monthly Bill Savings

Comparison homes $174 NA

Shea energy efficiency &solar water heating (SEE) $149 14%

Shea SEE + 1.2 kW PV $123 29%

Shea SEE + 2.4 kW PV $ 80 54%

Premier Homes ZEHCommunity

Premier & Morrison Homes

1200

Annual Energy Bill Comparison

0

200

400

600

800

1000

AnnualE

nerg

yB

ill($

)

Typical New Home ComfortWise / EnergyStar

Premier BA & ZEH

Other Energy Use

Water Heating

Space Cooling

Space Heating

Average Monthly Elect. Bills

100

150

200

Mo

.B

ill

Premier

Non-ZEH

0

50

100

Sept, 0

4

Oct

, 04

Nov,

04

Dec,

04

Jan,

05

Feb., 05

Marc

h,05

April, 0

5

May,

05

June

, 05

July,

05

August

, 05

Mo

.B

ill

Non-ZEH

Today® News ShowTestimonials• “Our utility bills were $150-200/m with

the 4 of us in a smaller house. Here it’sa bigger house & the bills are $30-50/m”a bigger house & the bills are $30-50/m”

• “I’m pretty upset when he calls & says--My monthly bill was $6. What’s yourslooking like—I’m forking out about $265”.Today Show, May 26, 2006, See linkbelow:

• http://video.msn.com/v/us/v.htm?g=fead2a8e-5d44-41bc-85dd-1528fae31594&f=rssimbot_us_m_3549&fg=email

Grupe ZEH (Also Grupe Green)

• Zero Energy Homes--“Does not mean ZeroEnergy Bills, but greatly reduced bills” MarkFischer, Senior VP Grupe HomesFischer, Senior VP Grupe Homes

• Features--Energy efficiency upgrades,renewable energy (2.4 kW PV), continuousfresh air ventilation, water efficiency,performance testing, and will qualify as“LEED” Certified

• Positive cash flow from day one– $2000 Tax Credit +$350-$500 net cash flow

• Solar and Energy Efficient features improve salesvelocity Whitney Ranch Master Plan Sales Data

Average Home Sales per Month (Overall)

2.4

1.0

1.8

1.7

Lariat Ridge

Remington

Shady Lane

Twin Oaks

Total Home Sales

53

39

42

21

Lariat Ridge

Remington

Shady Lane

Twin Oaks

Source: Northern California Ryness Report (10/29/07)

Total Sales Average Sales Per Month

Carsten Crossings is selling at an average of 3.9 homes per month. The other eight communitiesare selling at an average of 1.8 homes per month.

2.2

1.3

3.9

2.1

2.0

2.4

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Black Oak

Wisteria

Carsten Crossings

Sierra Sky

Caspian Run

Lariat Ridge

46

26

80

43

43

53

0 20 40 60 80 100

Black Oak

Wisteria

Carsten Crossings

Sierra Sky

Caspian Run

Lariat Ridge

Velocity Equals Profitability• 144 Homes at Carsten Crossings

• $2,642,000: cost for solar and EEmeasures

• $311,000 Monthly Cost of Carryfor Carsten Crossings

• At current sales pace, 37months to sell 144 homes

• Sales at competitors’ ratewould add 42 months toabsorption period

• 42 months x $311,000 permonth = $13 million savingsHomes/month month = $13 million savingsto Grupe

CarstenCrossings

Break Even

Competition

GrupeGreenBreak Even

1.8

2.0

3.9

Homes/month

Solar Communities Outselling 2 to 1!!Latest sales numbers from The Ryness Company…….

• 13 solar communities were evaluated for sales over 24months

Ryness provided 5 to 11 comparable non-solarcommunities for each solar community, then tracked salescommunities for each solar community, then tracked salesperformance.

Comparables established by Ryness were based onlocation, development concept, home size, list price, & lotsize

18

AverageMonthly

Sales

Sacra-mento

BayArea

CentralValley

Total

Solar asStandard

3.2 3.0 4.7 3.3

Nosolar

1.9 1.4 2.7 1.8

Combining Solar andEfficiency

• Builders develop their ownbrands for solar-efficient homes

• Solar and Energy Efficiency aremake excellent marketingpartners

• Homebuyers get excited aboutthe combination

• The features resonate “quality”

Phoenix Homeowner Survey (2005)

Data from 2 studies,each with 7000+homeowners

Base-line

Energy Star

GuaranteedPerformancee

kWh/sq ft 4.16 3.50 2.80

Brand Recognition NA 39% 32%

Key Reason to buy NA 10% 25%

Very satisfied withcomfort

27% 35% 49%

Adjust thermostat when 62% 54% 46%

NAHBRC ZEH Study

• ZEH has the potential to reverse Nationalupward trends in home energyconsumption (for both new homes & entireU.S. housing stock)U.S. housing stock)

• Evaluated homeowner attitudes & opinions– Focus Group

– National internet survey of 1,700 homeowners

• Market research findings– Over 80% will buy ZEH with positive cash flow

between mortgage and utility bills

– Buyers want credible guarantees from builder,major manufacturer or utilities for new features

SMUD’s Analysis of 36Homes• 18 ZEH Premier Homes compared to 18

control homes shaved peak by 55% on 107degree daydegree day

• And, control homes were designed to shavepeak about 25%

• Sample included 5 Premier Homes witheast facing PV system—if all PV was onsouth to west facing the July peak reductionwould have been 67% to .86 kW/house

Impact of Current ZEH Design

2.5

3

3.5

4

4.5

“ZEH” Demand – July average

“ZEH” Net Demand – July average

Average 2003 New Home

PV Prod. SW-facing (Nominal 2 kW)

SuperPeak

0

0.5

1

1.5

2

2.5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour

Demand(kW/home)

Peak

Gulf Power CPP Program

• GoodCents Select--Up to 4 customerloads automatically respond to pricesignalssignals

– “Set it & forget it” (Need to changeseasonally)

– Manual customer override option

• Price signals approximate market prices

• Designed to be “Revenue neutral” ifcustomer does nothing

• Standard rate is $.10/kWh

Gulf Power CPP Pricing

• GoodCents Select Program set by tariff

Price (¢/kWh) Time Block Hours/YearPrice (¢/kWh) Time Block Hours/Year(%)

7.9 Low 28

9.2 Medium 59

13.8 High 12

34.5 Critical 1

Gulf Power CPP Results• With Critical Peak Pricing

– Summer peak demand cut 40% (2 kW)

– Winter peak demand cut 60% (3kW)

• 96% customers “satisfied or “very satisfied”• 96% customers “satisfied or “very satisfied”– Significantly higher than control group

– 9,200 customers now—project 40,000

– Average annual bill savings = 15%

• 0 curtailments in 2003, typically 5-6 in summerand 3-4 in winter

• Florida PSC initially skeptical, now a big fan

Peak Load Reduction Potential in High Growth Market:Phoenix, Arizona

19,500 Zero PeakHomes (30% of

new Home starts)

6.6 128,700

Technique kW Reduction Total kW

Totalnew Home starts)

2,000 Zero PeakCondos

5 10,000

100k existinghomes w/CPP &automated energymanagement

2 200,000

TotalSavings:340 MWSystemLoad:6020 MW

Aspen Homes of Colorado

• Guaranteed heating bill

• Builds 50-100 homes/y

• Newest community• Newest community(1400-1600 sq ft homes)includes Net Zeroupgrade

• 67% of buyers takingthe $42k Net Zeroupgrade

3 ZEH Business Models• Optional ZEH—hardest to sell

– Sales staff must be trained & motivated

• Pre-plotted 10-30% as ZEH—sells fine– Excellent PR– Excellent PR– ZEH sells as fast as other homes

• Full ZEH subdivision– Excellent PR– Builders say, “Sell faster than nearby subdivisions”– Homebuyers do not seek ZEH but like it once they

have it, plus they brag about it– Given two “equal” subdivisions the ZEH subdivision

sells better than the conventional subdivision

Zero Peak CommunitySummary• By partnering with builders we will achieve

Zero Peak Communities before Zero EnergyHomesHomes

• SMUD dropped peak loads from 4.5 kW to 1kW via energy efficiency & 2 kW of PV/house

• Electric price signals key to existing & newhomes

• Gulf Power’s critical peak pricing program cutexisting home peaks by 2 kw in the summerand 3 kw in the winter