By 2020, California regulators want builders to make new houses so energy-efficient that on balance, they consume no energy at all, state officials said.
Technically speaking, these houses will consume energy at certain times ---- solar-equipped houses need grid power at night, for example ---- but at other times they would pump an equivalent amount of power back into the electricity grid.
To persuade developers to build these houses, officials from the California Energy Commission and the California Public Utilities Commission said they'll use a carrot-and-stick approach. Builders are divided over the financial practicality of the goal. Officials said simply articulating the goal is a crucial first step.
"The important thing is to signal to the marketplace, 'Everyone's doing their part,'" said Jeanne Clinton, demand side programs branch manager for the energy division at the PUC, and a writer of the plan.
The goals derive from the authority granted under the Global Warming Solutions Act, better known as AB32, which requires that the state reduce its greenhouse gas emissions to 1990 levels by 2020. Reducing energy use by houses moves the state closer to that goal, because in 2020, two-thirds of the state's power could still come from natural gas and coal-burning generators.
But there's also an economic argument for the goal, according to Panama Bartholomy, deputy director for efficiency and renewable energy for the Energy Commission.
"As we build more buildings and plug more things into the wall, there's a need to either build new energy generation or reduce energy consumption," Bartholomy said. "What we found over the years is, it's far more cost-effective for us as a society to invest in energy-efficiency measures than invest in power generation and transmission."
Getting to energy net zero will require a combination of incentives, and potentially, state mandates, Clinton and Bartholomy said. Federal, state and local governments provide a host of programs that subsidize energy-efficient insulation, appliances and furnaces. And the agencies are funding research.
"We're demonstrating and promoting emerging technologies. The research institutes are working on new products and technologies," Clinton said.
Every three years, the Energy Commission recommends new energy-efficiency standards for the state building code to the California Building Standards Commission. Most builders and regulators anticipate that the commission will ratchet up efficiency requirements with each new building code until a net zero mandate takes effect in 2020.
But it's far from a certainty: The state has a legal obligation to prove the upgrades aren't too expensive before requiring them, Bartholomy said.
Money is at the root of concerns among builders, because energy net zero houses are possible in 2011.
A home's energy consumption can be cut in half with improvements like tankless water heaters, improved insulation, and efficient appliances, and then combined with solar panels so that the house produces, over the course of a year, as much energy as it consumes.
Meritage Homes has three communities in California, including one in French Valley, that offer a solar upgrade that brings the home to energy net zero.
"We're already there," said Linda Edwards, division president for Meritage in Southern California. "It's not only a necessity going forward to reduce energy costs, it creates tremendous value for our homebuyers."
But doing so adds considerable cost to the construction of a new home, often between $25,000 and $50,000, builders contacted for this story said.
That's what worries Steve Doyle, CEO of Brookfield Homes Southern California. Brookfield's Rockrose at the Foothills development in Carlsbad exceeds California's energy-efficiency standards by 35 percent, Doyle said. But that's about as efficient as he can go without jacking up the price, he said.
"To continue to add to the cost of the price of building a home is only going to further exasperate the construction industry attempts to get back on its feet," Doyle said.
And he worried about the ripple effects of the goals.
"I have no problem with goals," he said. "The problem I have is when a Sacramento regulator calls something a goal, then a local councilman or planning director decides it's going to be a rule."
Other builders were less concerned. Robert Broad is director of purchasing for Southern California and Las Vegas at Pulte Group Inc. He agreed with Doyle that doing energy net zero now would be too expensive for current homebuyers, but he said nine years would be plenty of time for prices to come down.
"I can get to 50 percent (energy use) without any site generation," Broad said. "At that point, it's a matter of how big a (solar) array, to equal out the rest of that energy. We have to assume there will be advances in nine years. It's an awful lot of development time."
Indeed, the price of solar panels, not counting labor costs and taxes, plummeted from $10 per watt in 1980 to $3 a watt in 2008, according to the National Renewable Energy Laboratory.
Utilities are sanguine about the new houses, but they want to make sure there are fair rate structures, said Ted Reguly, director of customer programs and assistance for San Diego Gas & Electric Co.
"We're also going to have to come out with rate designs, so those customers can buy those services they need from the utility, without having the customers that don't have a net zero house (having) to pay for those costs," Reguly said.
Though the PUC's Jeanne Clinton is optimistic the state can meet the goals, she conceded that electric cars pose a new challenge to builders. Each car consumes the equivalent of two-thirds of a house's demand, according to Reguly.
But Clinton and Panama Batholomy hope that, with all players pulling together, net zero by 2020 won't be that difficult.
"This makes great sense for California and consumers in the long run," the PUC's Clinton said. "It's definitely more expensive to do this for existing homes. New homes should be a no-brainer."
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