Once a Fringe Idea, Net-Zero Energy Buildings Will Soon Be the Law

Imagine a building that produces all the energy it needs, from single family homes to the largest of skyscrapers. “Net-zero energy” may sound like a pipedream or at best an expensive, niche service for the wealthy, but California is taking it mainstream.

Starting in 2020, all new residential buildings — from single homes to apartments — and half of new state government buildings must be net-zero energy in California, followed by new commercial buildings by 2030. After 2025, all new state government buildings and renovations must follow suit.

Across the European Union, public buildings must be net-zero energy by 2019 and all construction by 2021.

Why Shoot for Net-Zero Energy?

Buildings are a major source of carbon emissions, so making them as energy efficient as possible is one of the least-cost methods for addressing climate change. In California, buildings consume more electricity than any other sector, with commercial buildings alone accounting for 38% of the state's power use and more than 25% of natural gas, according to the California Public Utilities Commission. In New York City, buildings are the source of 75% of emissions, according to the Mayor’s Office of Sustainability.

Thanks to the U.S. Green Building Council’s LEED-certification, architects have been designing ever-more efficient buildings over the years. Once you reach LEED-Platinum, the highest certification level, it’s not difficult to take the final step to net-zero energy. Also, crucial technologies for net-zero are now widely available and affordable, such as high performance LED lighting and solar systems.

New net-zero energy buildings can consume up to 60% less water and energy for only 1-3% of additional cost and yield a 5-10% return on investment, according to the Net Zero and Living Building Financial Study. These buildings are also much more resilient to catastrophic storms.

As of 2014, there are 160 net-zero energy buildings in the US, according to the New Buildings Institute, including about a dozen schools, university offices, low-rise apartment buildings, a Walgreens store and a branch of TD Bank.

Notable projects include:

  • The University of California/ Davis is planning a 130-acre net-zero energy community that will house 3000 people in single-family homes and apartments.
  • Gundersen Health System, a network of hospitals, medical clinics and nursing homes in Wisconsin, is the first health complex in the US to achieve net-zero energy.
  • The new Levi’s Stadium where the San Francisco 49ers play is net-zero energy, you can see the solar arrays in blue:
  • A skyscraper going up in Indonesia is shooting for net-zero energy
  • Nine Army bases are piloting net-zero energy, with a goal of achieving it by 2020. It will cut the Army’s energy consumption by about 8%.

There’s even a net-zero energy training center in San Leandro, California, where electricians learn advanced skills in this area. It's a joint project of the International Brotherhood of Electrical Workers Local Union 595 and the North California Chapter of the National Electrical Contractors Association.

A vast majority of public companies involved in green building are part of Nasdaq’s Green Economy Index.

Architects Embrace Net-Zero Energy

In 2009, the American Institute of Architects launched AIA 2030, where firms voluntarily commit to design net-zero energy buildings by 2030. As of 2014, 291 architectural firms have signed on, and architects around the world unanimously adopted the 2050 Imperative, a document signed by members of the International Union of Architects that commits them to 100% net-zero energy design and construction by then.

Over the next 20 years, "an area roughly equal to 60% of the total building stock of the world is projected to be built and rebuilt in urban areas worldwide, providing an unprecedented opportunity to set the global building sector on a path to phase out carbon emissions by 2050," the 2050 Imperative document says. Click here to find profiles of these buildings.

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NASDAQ® and NASDAQ OMX® are registered trademarks of The NASDAQ OMX Group, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither The NASDAQ OMX Group, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding NASDAQ-listed companies or NASDAQ proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED. © 2015. The NASDAQ OMX Group, Inc. All Rights Reserved.

Rona Fried, Ph.D. is CEO of SustainableBusiness.com, providing daily green business news and a national green jobs service since 1996. She is a consultant for the NASDAQ OMX Green Economy Index.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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