Net Zero Homes more than just reducing utility bills.

A Net Zero Home is defined as a house that produces as much energy from renewable sources as it consumes.  This doesn’t mean a Net Zero Home won’t have an electric bill, they may purchase energy from the grid in the winter and sell it back in the summer but the end tally must be zero.  In 2006 the HERS Index or Home Energy Rating was created with 100 being the standard building and a Net Zero building receiving a rating of 0. A Net Zero home will have higher upfront costs, but lower monthly expenses, since the energy improvements are paid for in the initial building. 

In 2005 the average New England household spent $200.00 per month on utilities; at current interest rates on a 30 year mortgage a person spending $40,000 extra in upfront energy efficiency costs would spend an additional $190.00 per month on their mortgage payments.  So the net might be the same but the real savings is the 129 million BTU’s of energy the average New England home consumes annually, and no that wasn’t a typo.  And this is the real goal of Net Zero building not eliminate energy bills but eliminating off site energy consumption. 

The other part of the equation is making the upgrades not only efficient but economical. New Town Builders, In Colorado has built a model Net Zero home that costs just $26,900 more than their standard home offering.  However,  taking these costs into consideration in the mortgage process has been a challenge since there currently is no mechanism for evaluating the reduced utility bills into a borrower’s ability to afford the loan.  Soon there may be the Sensible Accounting to Value Energy Act would direct federal mortgage agencies to consider the reduction in energy costs in the loan qualification process. 

The SAVE Act is not just for Net Zero Homes,  if passed any energy efficiency improvements will be taken into consideration as long as they reduce the consumer’s utility bills.  The SAVE Act is expected to create 83,000 new jobs by 2020 and save over 1 billion dollars in energy use annually.  Consider a boiler replacement that reduces a home’s energy bill by 30%, in New England that could equate to a $500 per year savings.  And a person looking at a home with a high efficient boiler could qualify for mortgage that is $9,000.00 higher than a home without one.