HOW MUCH EXTRA DOES IT COST TO BUILD A ZERO NET-ENERGY HOME?

HOW MUCH EXTRA DOES IT COST TO BUILD A ZERO NET-ENERGY HOME COMPARED TO A CODE COMPLIANT HOME?  This is a much-debated question, with typical answers suggesting the incremental building costs to be within the range of 6% to 20%, see table below. My guess is that many authors consider the 20% number an outlier, but I’m not convinced of that based on my experience building a custom ZNE house. So as not to keep you in suspense, it cost me at least $112,000 extra to build THE HAYFIELD HOUSE to be zero net-energy versus merely code compliant. This equates to about 14% extra. This figure represents the initial incremental gross upfront building costs prior to any tax incentives, rebates, or avoided energy costs. Note: my ‘building cost’ is based on the cost of the structure only and excludes any land, site development, landscaping or other costs not directly related to the building.

My incremental cost figure is likely a low estimate as will be explained shortly. I suspect many ZNE custom homes probably will cost 15-20% more than a code compliant house. I attribute lower cost estimates by others as a result of not accounting for all the costs and/or making cost saving assumptions that are problematic. Also, some of the lower cost projections are somewhat theoretical and/or are more applicable to spec houses as opposed to custom designed houses which typically have higher architectural design and construction costs. Note that some authors argue that the incremental cost is 0%, but these authors are not answering the question of “What are the incremental upfront costs?” Instead, these authors are answering a different question which is “What is the incremental cost after accounting for tax incentives, rebates, and avoided energy costs?” I’ll address this latter question in a subsequent post; the answer of which makes the ‘cost’ of building a ZNE house much more favorable than it would otherwise be.

EXTRA COST % TO BUILD A ZERO NET-ENERGY HOME	EXTRA COST $ PER SQUARE FOOT	DATA SOURCE
6.7 % – 8.1%		“The Economics of Zero-Energy Homes”, by Petersen, Gartman, Corvidae. RMI, 2018
20%		“Zero Energy Homes Comparable in Cost”. Zero Energy Project
12%	$16	“Net Zero Energy Feasibility Study”, Efficient VT, 2015

Note: The extra cost to reach zero net-energy will vary by climate region. As THE HAYFIELD HOUSE is in climate region 5, the discussion below applies mostly to that region.

For THE HAYFIELD HOUSE, these were the extra construction costs needed to reach zero net-energy (as compared to a code compliant house).

• The cost of the solar array was $61,000.  

• There was extra electrical work as an all-electric house needs a 400 amp panel versus a 200 amp panel. This added maybe $1,500 (or more) to the price of the home.

• Extra insulation was needed in the walls and under the slab, with an incremental cost of approximately $10,500.  

• There were extra framing costs involved with double wall construction versus single wall construction. This added cost (according to the builder) was approximately $17,000, including labor and materials. While this number seems high, this is what I was told.

• Extra finish trim (and plastering detail) was needed around doors and windows that were installed in the thicker double stud wall versus a thinner single stud wall.  The builder estimated the extra cost to be $4700.

• There was the extra cost of using a mini-split heating system. I’m not sure the answer, so I will assume zero, which is likely a false assumption.  

• The cost to upgrade to an EnergyStar rated double pane windows was about $2000. If I had further upgraded to triple pane windows, the cost differential would have been significantly more. Many zero net-energy homes in northern climates are built with triple pane windows, especially further north in climate zone 6. The extra cost of triple pane windows is hard to research, but a quick internet search suggests an increase of 10-15% in the cost of the windows, although some suggest upwards of 25%.  As THE HAYFIELD HOUSE is in climate zone 5, and I didn’t use triple pane windows, I will only include the extra cost of $2000 to upgrade to EnergyStar rated double pane windows. However, one can easily see that if I had used triple pane windows, the incremental cost would have been significant (as the base cost of my double pane windows was $53,000).

• The cost to install a whole house ERV system was $12,000, plus an additional $800 commissioning fee.  Granted, one could have installed maybe 2 single unit ERVs for maybe $2000. However, as most net-zero houses use a whole house system, for sake of argument I’ll call the incremental cost to be about $10,500.

• Extra architectural design is needed for a zero net-energy house versus a code compliant house. I’m not sure the incremental cost. Nobody seems to factor this cost in as a ‘building’ cost, but I find that logic to be somewhat bizarre, especially for a custom designed home.

• Although I didn’t use an energy consultant. I was quoted a $5,000 figure. As I should have hired an energy consultant, I’m including this extra cost.  

• There is an extra cost to do two (not one) blower door test (as is recommended by most net-zero advocates).  I’m not sure the cost, so I will assume zero, which is false.  

• It costs extra to reduce air leaks by finding and caulking various seams.  I’m not sure the cost as I did this work mostly myself, so I’ll assume zero, which is completely false.  

• There could have been an extra cost to install a heat pump water heater which are used in most ZNE homes. I’m not sure the incremental cost as I didn’t use a heat pump water heater. I’ll assume zero incremental cost, which isn’t true for most ZNE homes.  

• There likely is an extra cost to use an experienced net-zero builder (who likely wants to charge a premium). I don’t know that answer. My builder hadn’t built a ZNE house, so I will assume zero incremental cost, which is likely false.  

• It costs more to buy EnergyStar appliances, as otherwise you’ll need more solar panels to meet your house’s energy demands. I’ll assume zero extra cost as most people would argue these aren’t ‘building’ costs.  

The above total incremental costs shown total $112,200. If I only include construction costs for THE HAYFIELD HOUSE (i.e., ignoring land, utilities, driveway, well, and landscaping costs), this $112,000 represents a 14 percent increase over what a code compliant HAYFIELD HOUSE would have cost.  However, this figure is conservative as the above discussion assumed zero incremental costs when I didn’t know the cost number. For most custom ZNE houses, an owner probably should expect the house to cost 15%-20% more than a code compliant house.    

Before ending this post, I’d also like to note that the comparison between a ZNE house and a code compliant house should not be solely restricted to costs. ZNE houses (versus code compliant houses) have improved quality and livability factors that I’ll explain in another post. In short, you pay more for a ZNE home, but you get a better home. 

So the moral of this story is…  

If you add bells and whistles, expect to pay for the bells and whistles.