TODAY’S STUDY: THE LOWEST COSTS AND HIGHEST BENEFITS IN NET ZERO ENERGY BUILDINGS

Net Zero and Living Building Challenge Financial Study: A Cost Comparison report for Buildings in the district of Columbia

April 2014 (International Living Future Institute, New Buildings Institute, and Skanska)

Executive Summary

The district of Columbia (the district) is a leader in green building implementation. According to the 2012 green Building report, the district has more green buildings than other large u.s. cities on a per capita basis.1

While district policies have been a driver of high performance building development in the private sector, ambitious new goals will require the district to make another leap forward. to advance the industry into the next era of green design, the district of Columbia’s department of the environment sought to understand the costs and benefits associated with net zero energy, net zero water, and living Buildings.

The purpose of the Net Zero and Living Building Challenge Financial Study: A Cost Comparison Report for Buildings in the District of Columbia was twofold. first, to investigate costs, benefits and approaches necessary to improve building performance in the district of Columbia from leed platinum to zero energy, zero water and living Building status. second, to advise district government on policy drivers related to deep green buildings and to analyze the opportunities for the district to offer incentives to advance most rapidly toward zero energy, zero water and living Buildings.

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For the study, new Buildings institute (nBi) teamed up with the international living future institute (ilfi) and skanska to conceptually transform three leed v3 platinum designed buildings in the district of Columbia to net zero energy, net zero water and living Buildings. the leed platinum reference buildings represent three commonly developed types in the district: office new construction, multifamily new construction, and office renovation. All were either in design or recently completed, and the team benefited from recent cost estimates and detailed information about building characteristics and systems. A set of energy conservation strategies and rainwater harvesting techniques were applied to each building to arrive at reduced energy and water usage before photovoltaics (“pVs”) and water reuse strategies were applied. however, incentivizing the creation of ultra-water and energy efficient buildings that provide some of their own resources puts the district of Columbia in a strong position to be a net zero water and energy city in the future, as technology advances and as solutions the neighborhood scale are developed.

Costs for getting to zero are difficult to distinguish from overall project costs. the team conducted an analysis to identify incremental cost premiums for deep energy and water conservation as well as for photovoltaic and water reuse systems that would bring a project to net zero. the cost premium for energy efficiency was approximately 1-12% depending on building type. this rose to 5-19% for net zero energy. the analysis made clear that if the owner has sufficient tax appetite, tax credits and renewable energy credits make the return on investment approximately 30%, whereas the return on investment for energy efficiency alone was in the range of 5-12%.

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Achieving net zero is not only a matter of design; it requires careful attention to operations and maintenance (o&m), as well as to occupancy patterns and loads. While net zero buildings are possible with today’s technologies, this research uncovered the challenge associated with achieving net zero in the large building types commonly found in the district’s city center. When considered in isolation, even ultra-efficient 300,000 sf buildings may not be able to generate as much energy or collect as much water as they consume over the course of a year, given common rainfall patterns and today’s onsite renewable energy technology.

A new policy framework is required if the building industry is to embrace net zero and living Buildings at scale. to accelerate adoption, this research suggests the district develop a comprehensive roadmap that addresses all of the following issues over time and illustrates a clear pathway to the district’s aggressive 2032 goals. the roadmap should consider these key recommendations from the study:

• Define net zero. develop a clear and achievable definition of net zero in the district. in any net zero energy definition, policy makers should focus on energy efficiency and include a healthy balance of renewable energy production. energy use and production should be verified with measured performance results.

• Consider community-level approaches. Boundaries that move beyond the building to multiple buildings or communities should be considered. Community approaches to energy and water (sometimes referred to as “district systems”) are an effective way to address the challenges uncovered in this research. individual buildings can benefit from economies of scale associated with community-based solutions. By connecting buildings, waste energy and water in one building can be utilized by another.

• Encourage transition to outcome-based energy codes. use benchmarking and disclosure data to set outcome-based energy targets set within a scaled framework to encourage and focus designers, owners, operators and occupants toward an end result of ultra-low energy use. future green building policies and incentives can be aligned and directly tied to this outcome-based energy target.

• Establish new and modify existing financial incentives to encourage deep savings. the next evolution of incentive programs should pay based on measured performance rather than predicted results. piloting programs that utilize outcome-based targets and encourage net zero will require programs that are able to span multiple years and allow for more cost-effective measures to pay for others that may be less cost-effective. financial incentives should focus on efficiency, since renewables already have significant incentives to benefit owners.

• Address limitations of the grid and acknowledge the changing role of utilities. the district should investigate technical issues associated with the capacity of the utility grid and net metering and work with local utilities to transition to a revenue model that will help to successfully integrate net zero buildings into the evolving utility system.

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Introduction

The District of Columbia is a leader in green building implementation. district green building policies, specifically the green Building Act of 2006, and a future-thinking private sector have driven increased rates of participation in the leed building rating system. significantly, 61% of certified projects are now either leed gold or platinum, twice the national average. the sustainable dC plan has an ambitious goal to cut citywide energy use by 50% from the 2010 baseline by 2032 and increase use of renewable energy to make up 50% of the district’s energy supply. Because buildings are so prominent in the district’s energy use profile, steep reductions in energy use of new and existing buildings will be necessary to meet this goal.

Understanding the benefits of energy and water reduction strategies is helpful to a community and its leaders in establishing policy and incentives to support goals. Advancing net zero and living Building policy means advancing economic development, energy leadership, ingenuity and resilience. planning for a net zero future creates practical and achievable energy solutions for residents and economic and environmental benefits for a city itself. these benefits include: green jobs, a workforce trained in technical skills that cannot be outsourced, local economic development, energy independence, resiliency during extreme weather events, and the health and productivity of building occupants.

Understanding the costs provides the community and policy makers with insight as to what targets and incentive levels are necessary to achieve these benefits. this study investigates the anticipated cost differential between a set of three reference buildings designed to the leed platinum standard and those same three buildings conceptually designed for deep energy efficiency, net zero energy, net zero water and adherence to the living Building Challenge™. the study summarizes the cost premium range for each building type, uncovers challenges associated with the large size of commercial buildings in the district of Columbia and provides policy recommendations for addressing them…

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Conclusion

The District of Columbia is a leader in green building implementation. district policies have been a driver of high performance building development in the private sector, and the district is now in a strong position to advance the industry toward net zero water, energy and living Buildings. this Net Zero and Living Building Challenge Financial Study: A Cost Comparison Report for Buildings in the District of Columbia investigated the costs, benefits and approaches necessary to improve building performance in the district of Columbia and recommended a framework for policy to advance most rapidly toward those results.

The study conceptually transformed three leed platinum buildings (office new construction, multifamily new construction, and office renovation) in the district to net zero energy, net zero water and living Buildings. using recent data, the team considered the cost of enhanced energy conservation strategies, renewable energy, rainwater harvesting techniques and water reuse strategies, and those that would create living Buildings.

click to enlarge

Costs for getting to zero are difficult to distinguish from overall project costs. however, the team conducted an analysis to identify incremental cost premiums for energy and water conservation as well as for photovoltaic and water reuse systems that would bring the project to net zero. the cost premium for energy efficiency was approximately 1-12% depending on the building type. this rose to 5-19% for net zero energy. the analysis made clear that if the owner has sufficient tax appetite, tax credits and renewable energy credits make the return on investment approximately 30%, whereas the return on investment for energy efficiency alone was in the range of 5-12%.

Achieving net zero is not only a matter of design; it requires careful attention to operations and maintenance, as well as to occupancy patterns and loads. While net zero buildings are possible with today’s technologies, this research uncovered the challenge associated with achieving net zero in large buildings, like those that are common in the district’s city center. When considered in isolation, even ultra-efficient 300,000 sf buildings with today’s onsite renewable energy technology may not be able to generate as much energy or collect as much water as they consume over the course of a year. however, the encouragement of net zero at the building scale sets the stage for future technology solutions and the removal of barriers to district energy and water systems to get the district of Columbia to energy and water independence.

Most of the barriers to achieving net zero for water are in the regulatory arena. Allowing district systems, rainwater capture and grey water reuse would open the door to significant water capacity building in the district. At the building scale, water-efficient strategies and water systems have a minimal impact on building costs compared to the value and resilience they create in the community.

Most of the cost and time implications for achieving the living Building Challenge outside of the energy and water requirements involves the research for the materials petal. most other requirements have small cost implications and have more to do with careful design. in fact, one the most important things to encourage in the district is the use of integrative design for projects to get the highest performance with the lowest cost implications. the living Building Challenge should expand the cost conversation around building in the district of Columbia to include what the community values.

A new policy framework is required if the building industry is going to embrace net zero and living Buildings at scale. in order to accelerate adoption, this research suggests the district should develop a comprehensive roadmap that addresses all of the following issues over time and illustrates a clear pathway to the district’s aggressive 2032 goals…

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