Gene Myers has a bone to pick with a common refrain heard about the housing industry. “There’s this perception that they don’t build houses like they used to,” says Myers, founder and CEO of Denver–based Thrive Home Builders (formerly New Town Builders). “Well you know what? It’s true. Today we build them a lot better.”

Take his homes, for instance. Built to the criteria of the DOE’s Zero Energy Ready Homes program, each has double-framed walls filled with R-40 insulation, which is then topped with R-50 insulation in the attic. All cooling and heating ducts are in conditioned space, meaning they’re not subjected to broiling tempe­ratures in the summertime, or freezing ones during winter, so HVAC units can be sized smaller and operate more efficiently. Myers’ homes also tout Energy Star appliances; high-performance, low-E windows; CFL lighting; and water saving fixtures, in addition to meeting heightened indoor air quality standards.

Gwen Keraval November 2016, Feature

The result is that, on average, Thrive’s homes are about 60% more energy efficient than a typical code home, but don’t cause anywhere near that amount of sticker shock for buyers. In fact, Myers says the homes cost only 7% more to build, a margin he recovers by charging a slightly higher price than his competitors for a product he says distinguishes itself in total cost of ownership.

“I ask my buyer for an extra $100 a month on their mortgage for a better house, and I give them back $300 a month in energy savings. That’s not a hard sell,” says Myers. “When someone takes our zero energy option, that’s actually a little higher margin for us than just our base, zero energy ready house.”

With energy codes becoming more stringent in many states, Myers and Thrive are at the vanguard of a growing group of regional and national production builders who are building highly efficient, zero energy ready homes—meaning they’re wired for photovoltaic panels, even if those panels aren’t on the roof yet. They’re doing it for just $5,000 to $10,000 more in direct costs now voluntarily (some builders even say they can do it for the same price as conventional homes) before the day comes when codes say they must, a moment in time that’s just around the corner in some areas.

California, for instance, has a stated goal of adding zero net energy (ZNE) requirements into its building code by 2020. If implemented as envisioned, that means California’s new homes won’t just have to be zero energy ready—they’ll actually have to generate as much energy as they consume in the course of a year, typically by installing solar panels on the roof. And other states, such as Massachusetts and Florida, have been adding on to their standards as well.

“We’re pretty confident that by 2020, you’re going to see a significant number of states moving in that direction,” says Sam Rashkin, creator of the EPA’s Energy Star for Homes benchmark, and current chief architect in the building technologies office at DOE, where he heads the Zero Energy Ready Home program. “By 2025, the national code pretty much looks like what we’re doing now with zero energy ready (ZER) or better.”

That spec incorporates Energy Star for Homes, the EPA’s Indoor airPlus and WaterSense programs, and insulation requirements from the International Energy Conservation Code, in addition to solar-ready wiring, next iteration code adherence, and getting heating and cooling ducts into conditioned space.

Currently, about 320 builders are enrolled in the program, with 1,000 homes certified nationwide. “But what’s exciting for us is that we are finally at a tipping point,” Rashkin says. “For the first time, we have some large national builders who are committing to do zero energy ready homes across an array of divisions,” including Meritage Homes, KB Home, and PulteGroup.

"I ask my buyer for an extra $100 a month on their mortgage for a better house, and I give them back $300 a month in energy savings." - Gene Myers, Founder and CEO of Thrive Home Builders

While some nationally showcased concept homes have incorporated a dazzling array of technology and high-end systems in the past to reach the “zero energy” threshold, they’ve almost always done so at an equally dazzling price, adding anywhere from $25,000 to $50,000 to the cost of a home. Much of that cost—up to half or more—typically goes toward photovoltaic (PV) solar panels to get homes all the way to zero. While the cost of PV has come down considerably—prices are now $3 to $4 per watt installed—typical systems still run $15,000 to $20,000 per house. That’s led many builders to question whether getting to zero on a large scale, in the near term, is financially feasible.

“There are a lot of people in the industry who are afraid of this,” says C.R. Herro, vice president of energy efficiency and sustainability at Phoenix-based Meritage Homes. “Zero, for a lot of builders, is a threat that requires additional features they don’t think buyers will pay for. They think it’s going to erode their profitability.”

But that’s not how Herro and other zero energy and near-zero builders see it. “We build head-to-head with any non–zero energy ready house builder at no extra cost,” says Steve Brown, president of Plano, Texas–based Carl Franklin Homes, which started to focus on high-performance homes in 1992. “I guess one of the reasons why is because we’ve done it for so many years.”

Less is More

For builders of Herro’s and Brown’s ilk, the mantra is “reduce before you produce.” That means they focus on making their houses as tight and efficient as possible first, before adding solar. The more efficient they build the house itself—i.e., the less energy it uses by design—the smaller, and less expensive, those costly photo­voltaic panels can be. Typically, they say, a gain in one area helps offset expenses in another, such as better or more insulation reducing the size and cost of a home’s overall HVAC system.

Take Meritage, for example, which claims to produce more zero net energy homes—about 80 annually—than any builder in the country. It does so by building all of its 8,000 homes per year to near zero net energy standards, making them about 50% more efficient than existing homes and all solar ready at an additional cost, above code, of just $5,000 per home. Next, it installs a base solar package on about 10% of its roofs. Customers who then want to pay for more solar to get all the way to zero can, but the focus for builders is on eliminating as much of the need for power inside those homes in the first place.

“The trick is to get that solar system as small as you can, and you do that by building a better house,” Herro says. “We look for the cheapest way to eliminate kilowatts from the house. We target energy efficiency first by putting in high-performance lights, high-performance appliances, better windows, better insulation, and by getting our ducts into conditioned space. You build the envelope so that it needs only half of the renewable energy than it used to, and then, to get all the way to zero with solar becomes the next most cost-effective step. Now, instead of a house that would otherwise need a 6 kW system at $4 a watt, you only need 3.5 kW.”

Gwen Kendaval

Others say the more they build toward zero, the better—and more efficient—they get at it. KB has built around 5,000 solar homes nationally, and 12 full zero energy homes across its national footprint. The company has received accolades for its achievements, including two “Double Zero” homes in California that focus on both zero energy and zero unrecycled water for irrigation purposes. Its Double ZeroHouse, completed in 2014, in the state’s El Dorado Hills community had additional costs of $38,000 including photo­voltaics and an onsite waterrecycling system for landscaping. That additional cost is a number that’s sure to make even the most energy-­conscious home buyer blanch, though the $2,449 in annual energy savings should justify the premium within about 15 years.

Still, those additional costs were actually about $12,000 less than the first Double ZeroHouse home KB Home built in Lancaster, Calif., nine months earlier.

Jacob Atalla, vice president of sustainability initiatives at KB Home, says the firm has been able to cut the incremental costs of building zero energy homes by about half, and shave a month off its cycle time since it started experimenting with these techniques in 2010.

“Our first net zero home took five extra weeks to build compared to our normal cycle time,” says Atalla. “By the 12th ZNE home, we were down to one extra week, because we had learned so much. And time, of course, is money.”

Low-Tech Solutions

In 2013, Thrive committed to building 100% of its homes to the DOE Zero Energy Ready Home standard. Now, each one of Myers’ homes is designed from the ground up to be as energy efficient as possible. Thrive’s average Home Energy Rating System (HERS) score is in the low 40s to high 30s—the lower, the better—before installing any solar panels, which means his homes are 60% more efficient than a typical code home. (Homes built to code, by definition, achieve a HERS score of 100.)

But the company didn’t use any high tech (i.e., expensive) bells and whistles to get there. “We like to look for low-tech ways to do it,” says Myers.

For instance, instead of more expensive SIPs or extra rigid foam on the exterior, Thrive uses advanced framing techniques to build its double walls, setting two 2x4 frames 2.5 inches apart at the base to create a 9.5-inch wall cavity.

After sheathing the exterior with OSB, Thrive staples netting to the face of the interior studs, and fills the whole assembly with blown fiberglass. The result is its R-40 thermal resistance rating in the exterior walls.

In his vented attics, Myers specs 14-inch raised heel energy trusses to sit atop those walls, which gives him enough space to blow in an R-50 layer of fiberglass over the top plate. He also makes sure that any perforations into that top plate, say for a Romex chase or PVC vent, are sealed before they’re buried. Then, he has his crews shoot a bead of pliable sealant on those top plates before screwing up drywall to create an airtight gasket between the living space and the attic, which means that gypsum essentially doubles as his air barrier.

“Drywall is actually a very good air barrier if you handle the penetrations properly,” Myers says. “Plus, it’s something you’re already buying.” He offers a similar logic for doubling up his 2x4 walls. “Not only is it the cheapest solution, we know from a practitioner standpoint that every framer in America knows how to build a 2x4 wall.”

Thrive, which builds in a basement market, locates its HVAC equipment and ductwork in that conditioned space, a signature aspect of all zero energy and zero energy ready homes.

"Zero, for a lot of builders, is a threat that requires additional features they don't think buyers will pay for. They think it's giong to erode their profitability." - C.R. Herro, vice president of energy efficiency and sustainability at Meritage Homes

“We’re asking for no-brainer innovations,” says the DOE’s Rashkin. “There’s no reason to run 55 degree conditioned air through a 150 degree attic, or 105 degree heated air through a 20 degree crawlspace. Installing your comfort systems basically outdoors is just a silly practice that doesn’t make sense anymore.”

Many builders have been experimenting with unvented attics or sealed crawlspaces and conditioning those spaces.

Meritage, for instance, uses polyurethane spray foam insulation in its unvented attics to make sure they stay cool. “That spray foam insulation goes all the way up into the corner of our trusses in our attics so that our HVAC is in conditioned space. There’s no leakage to the outside.” Not having to buy attic vents, and eliminating the time needed to cut holes in the roof deck and install and flash them, also helps save time and money.

But while spray foam may be a good solution for Meritage, smaller builders say it can be cost-prohibitive. And depending on the size of the attic, sealing it may result in more conditioned space than is desirable, creating a need for a larger HVAC system. To get around that issue, some builders will enclose an HVAC system inside a vented attic to cut down on the volume of conditioned space.

"They call it a dog house,” says Payam Bozorgchami, a senior civil engineer at the California Energy Commission who’s managing the 2019 iteration of the state’s energy efficiency standards. “They insulate around it and put all their ducts inside it to have less volume. That reduces the size of the mechanical system and allows you to have a conventional attic, but gets your ducts out of unconditioned space.”

A recurring issue of super-tight homes in the past has been how to keep them ventilated and dry. For that reason, automatic vent fans have already been incorporated into many codes. Energy recovery ventilators, which exchange inside and outside air while preserving conditioned temperatures, have come down in price.

“The biggest problem with a tight home is the moisture, because anytime you don’t get rid of the moisture, you’re at risk of promoting mold,” says Brown at Carl Franklin Homes in Texas. “But energy recovery ventilation systems address that. When they first came out, they were about $1,500 a pop. Now, the ones we’re using cost us $300, so that’s a lot less than it was.”

From handling moisture to reducing the HVAC system, building a net zero home takes additional planning.

“The reason why you want to do this is easy,” says Meritage’s Herro. “These houses give buyers a better choice, and as with everything else we buy, once you give buyers a better choice, they soon start demanding it. Think about it. Nokia made ‘good enough’ cell phones until Apple showed us what was possible. So while building this way now is a proposition of giving buyers a better choice today, it’s going to be a proposition of surviving in the future.”