California set an ambitious goal known as The California Long Range Strategic Plan, which sets forth a goal for all new homes to be built to Zero Net Energy (ZNE) standards by 2020 and all commercial buildings to be built to Zero Net Energy standards by 2030. In California, homes consume nearly one-third of the energy used in the state, so this goal has the potential to make a significant reduction in carbon emissions, as well as to become a model for other states to follow.

While we think this could be a huge step on the path towards a carbon neutral future, we are hesitant to fully endorse this plan. As they say, the devil is in the details, and in this case, the details are an important part of how this plan will be implemented. In June of this year, California announced the adoption of the 2016 Title 24 part 6 set of standards that will become the next step for Zero Net Energy Homes in the 2020 version of the standards, standards that support their significantly watered-down and distorted definition of Zero Net Energy Homes.

The Energy Valuation Loophole

The new standards California will be using to define a Zero Net Energy Code Building in the 2020 Code uses a unique method for determining a home’s energy usage:

“A Zero Net Energy (ZNE) Code Building is one where the net amount of energy produced by on-site renewable energy sources is equal to the value of the energy consumed annually by the building……. using the California Energy Commission’s Time Dependent Valuation (TDV) metric.”

Using the TDV metric means that savings from energy efficiency measures will be valued differently depending on which hours of the year the savings occur, to better reflect the actual costs of energy to consumers and the utilities. The TDV method encourages building designers to design buildings that perform better during periods of high-energy costs.

TDV energy is calculated by multiplying the site energy use for each energy type times the applicable TDV multiplier. TDV multipliers vary for each hour of the year and by energy type, Climate Zone and by building type. According to David Heslam, Executive Director for Earth Advantage, “This methodology simulates energy use and generation in two-minute increments across the entire year, then it applies a weighting scheme to each two minute period according to the time dependent societal value of energy that they have determined.”

What this means is that California values a kilowatt-hour during peak demand hours at many times what they value a kilowatt-hour in the middle of the night. As a result of calculating energy use in this way, a California code built “Zero Net Energy Home” can have an estimated average energy use reduction of 60%, even after solar panels are added to the home. In comparison, Earth Advantage’s Net Zero certification requires that a minimum of 90% of the annual energy load be met through onsite solar PV production. Heslam adds, “Defining Net Zero using TDV does not produce buildings that are actually net zero energy consumers over the course of the entire year. California has spent a great deal of time to create a very complicated methodology and definition of what is a rather simple concept.”

Essentially, California is putting a higher value on a kWh of energy during peak loads, than on a kWh of energy during other times. We think that when it comes to determining if a house is Zero Net Energy that energy consumed is just that—energy consumed, and energy produced is energy produced.

The best way to get to be truly Net Zero Energy is through designing and producing a high performance building envelope, along with appropriately sized solar PV collectors and a variety of energy efficiency measures such as highly efficient appliances and lighting—not through applying a weighting scheme that will inflate the number of kWh produced by PV collectors.

The Zero Energy Ready Loophole

Another possible loophole in the California standards is that it is not yet clear whether or not the California Energy Commission (CEC) has the legal authority to require solar panels on the roof. If it is found that they do not, or if they cannot find a package of features that match the legislation-mandated cost effectiveness test, they would probably move to a Zero Energy Ready code. While we do advocate for the design and building of Zero Energy Ready homes, we feel that this would be another watered down approach and may significantly delay California’s progress toward Zero Net Energy Homes and Buildings. Will there be a requirement for Zero Energy Ready Homes to eventually install solar panels? Will there be incentives that would help homeowners decide to install solar panels? There are still many questions.

We also question the standards used for their definition of “ZNE Ready”. Currently their definition of Zero Net Energy Ready is: “ZNE Ready is comparable, if not the same, to ‘ultra-low energy’ buildings, defined by NBI in the 2014 ZNE Status Update. Ultra-low energy buildings are comparable to ZNE buildings based on energy use, design strategies and efficiency technologies but do not have a stated goal of ZNE using onsite renewable energy.” We find this definition to be rather soft, particularly in comparison to the DOE’s Zero Energy Ready Home program which has a prescriptive path that includes a PV-Ready Checklist.

In response to that question, we have learned that there are already some PV ready requirements in the current California code. Currently, 250 square feet of usable roof space must be dedicated for future solar installation along with a raceway between the attic and panel. It also requires space in the panel for future breaker installation. We will postpone further comment until we see how this is actually implemented.

While the California Zero Net Energy goal might look good on paper, the reality is that the standards by which they are trying to reach the goal might seem like a form of green-washing. However, the state of California could choose to take a different path with this program. If it is not going to require zero net energy buildings, it could rename what it is trying to do. This would avoid confusion in the marketplace by not diluting the Zero Net Energy Home “brand.”

We will be looking forward to see what form the California Building Code finally takes with regard to the Zero Net Energy Home standards it actually sets in 2020. Stay tuned for continued updates on this topic as it evolves.

What do you think about California’s effort to get to net zero? We’d love to hear from you. Please feel free to leave a comment below or send us a direct email with your thoughts.