Are Net-Zero Energy Houses on the Horizon?

Builders are testing the best ways to increase energy efficiency without upping costs for consumers.

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With a steamy summer in full swing and colder temperatures on the horizon, prospective home buyers are paying closer attention to energy efficiency, especially when it comes to the bottom line on home purchases. Mortgage rates and a home's sale price comprise a big chunk of the price of homeownership, but experts say maintenance and energy costs can sneak up on consumers, too, adding hundreds of dollars to their housing budgets each year.

With more energy-conscious consumers and changing building codes in mind, an increasing number of builders are integrating more energy-efficient designs into new constructions. They're going beyond including Energy Star-rated appliances and using better sealing technologies, smarter floorplans, and small but important structural modifications. "In the past, given a choice, frankly, many customers would have rather paid for upgraded amenities than energy efficiency," says Steve Nardella, senior vice president of operations at Maryland-based builder Winchester Homes. But that's all changing now, with frequent energy-price spikes and increased awareness about the environmental impacts of energy use.

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"We're finding more and more buyers who are passionate about [being] green and are willing to spend time and effort educating themselves," he says. "When people are shopping for a car, some put a lot of consideration into miles per gallon. When you're buying a new home, you should consider what it's going to cost to run the thing."

To see just how energy-efficient builders could be in constructing homes, the Department of Energy has sponsored the Building America Builders Challenge program in collaboration with several segments of the construction industry, including The National Association of Home Builders (NAHB). One of the goals of the program is to develop technologies and techniques necessary to build cost-effective, net-zero energy homes—houses that produce as much energy as they use annually—by the year 2030.

Camberley Homes, a division of Winchester Homes, built the program's inaugural Builders Challenge home that was unveiled earlier this summer. It achieved 40 percent greater energy efficiency than a typical new construction, using a combination of structural modifications and design elements to reduce energy waste. Initial results of the home's energy efficiency are encouraging, says Camberley Homes' community sales manager Randy Lee. While a typical home built in the 1950s has a rating on the Home Energy Rating System Index of about 150, most new constructions clock in at around 100. Camberley's Builders Challenge home has an even lower rating of 53.

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Although the model home is built, Lee says it's still a work in progress. Sensors throughout the home collect data about the home's temperature, humidity, and water and electricity usage, and send it to the NAHB research center for analysis. Analysts then study the data and come up with modification suggestions to further increase energy efficiency. "We are really trying to figure out best practices and solutions that are the most cost-effective, taking into account the materials and installation costs," says Amber Wood, manager of energy programs at the NAHB Research Center. NAHB's team worked closely with Camberley throughout the entire building process and the home building firm hopes to implement techniques and technologies successful in the model home in their development in Bethesda, Md., Poplar Run.

"Ultimately, from the consumer standpoint, you're looking at a combination of utility bills and your mortgage," Wood says. "It may cost a little more upfront, but ultimately you're saving enough on your utility bills that your cash flow is even better."

One of the more visible modifications builders are beginning to make, including Camberley, is simply reducing the size of the homes they build—Camberley's model is 2,600 square feet—and favoring more efficient and even unconventional layouts. According to the NAHB, 9 out of 10 builders expect to build smaller, lower-priced homes in the coming years, and many new homes forgo a formal dining room for a larger great room, or use a den as a home office.