SPOTLIGHT REPORT

Net-Zero Energy Isn’t the

Real Goal: 8 Reasons Why
Editors

Paula Melton
Editorial Director

Brent Ehrlich
Nadav Malin
Candace Pearson
Alex Wilson

Graphic Design
Amie Walter
Julia Eva Bacon

Cover Photo
Lubber Run Community Center
Photo: Tom Holdsworth

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BuildingGreen Spotlight Report

Net-Zero Energy Isn’t the Real

Goal: 8 Reasons Why
Net-zero-energy buildings don’t always reduce carbon emissions.
These are the tweaks we need to ensure they do.
By Candace Pearson and Nadav Malin

Karina Hershberg’s transition from fo-

cusing on energy to focusing on carbon
began six years ago. An electrical engi-
neer at PAE Consulting, Hershberg was
working on a project with deep sustain-
ability goals. Net-zero energy (NZE) was
a given. The team was considering tak-
ing the project entirely off grid and was
thinking about a 300-year time horizon.

That timeframe got them looking at re-

placement cycles for photovoltaics (PV)
and batteries, and questioning the wis-
dom of organizing around net-zero en-
ergy as the primary goal. They switched
to focusing on emissions instead, and
they haven’t looked back. “Where my
research has landed shows that we need
to focus on carbon emissions,” Hersh-
berg says. “Energy can sometimes be a
proxy for it, but sometimes it isn’t.
Photo: Tom Holdsworth
“The blunt instrument of [NZE] is kind
of an outdated concept,” says Commis- This increase in renewable energy The battery storage at Lubber
Run Community Center (an
sioner Andrew McAllister of the Califor- sources both hastens the need for NZE NZE project) is programmed to
nia Energy Commission. If the “real goal buildings to become partners in that dispatch at a time of day when
is carbon-free energy and decarboniza- transition and exacerbates the ways that the grid is dirtiest, displacing
traditional NZE buildings will fall short more carbon emissions than a
tion,” he says, net energy use over the
PV system alone.
course of a year may not be that helpful on reducing carbon emissions. NZE proj-
as a metric. ects are a big step in the right direction,
but we must start designing and oper-
What’s driving this re-think? The U.S. is ating them differently to accelerate the
now adding renewable energy genera- transition away from carbon emissions
tion faster than any other source, which in the building sector.
is putting us on a path to rapidly decar-
bonize the electric grid. In some parts Below we list eight ways that NZE proj-
of the U.S., the grid is already relative- ects miss the mark on climate goals,
ly clean. And Biden’s Clean Electricity including how they affect the electrici-
Standard proposed through his Infra- ty grid, transportation, embodied car-
structure Plan would set us on a path bon, and resilience, and how we can
toward 80% clean energy on the grid by course-correct to achieve our goals.
2030.

Net-Zero Energy Isn't the Real Goal: 8 Reasons Why 1

BuildingGreen Spotlight Report
1. NZE Buildings Use
Energy at the Wrong Time
Under the net-zero-energy scheme, it
doesn’t matter when net-zero-energy
buildings pull energy from the grid as
long as each kilowatt-hour consumed is
offset with a kilowatt-hour of renewable
energy generation over the course of a
year. In practice, however, most NZE
buildings produce a lot of renewable
energy from solar photovoltaic panels
during the day and then draw from the
grid when the sun is down. Their “load
profile” therefore, has two peaks with a
big dip in the middle of the day.
The climate downside
That’s a problem because these peaks
can align with times when overall de-
mand increases on the grid and when
renewable energy is in shortest supply.
There will always be hours of the day
when grid-scale solar energy isn’t being
generated and wind is variable. Nuclear
A typical net-zero-energy building will have a load curve similar to an energy efficient building with solar pv: two
peaks with a large dip in the middle. Smoothing that curve brings carbon emission reductions.
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
and hydro power may be available,
but those sorts of power plants can’t be
ramped up or down quickly enough to
compensate for the sudden loss of solar
energy or sudden increase in demand.
During these hours, utilities almost ex-
clusively use fossil-fuel-powered “peak-
ing generators,” which translates to a
dirtier emissions profile. As an exam-
ple, on May 10, 2021, the California grid
emitted 158 grams of CO2 equivalent
for each kWh generated at 10:30 a.m.,
but that nearly doubled to 275 grams at
11:00 p.m., according to Electricity Map.
Because NZE buildings draw from the
grid whenever they can’t produce their
own energy onsite, they often end up re-
lying on the grid just when it is dirtiest.
“The carbon-intensity and grid-infra-
structure needs of net-zero-energy
buildings actually could be comparable
to standard buildings, causing the grid
to draw on dirty, peaking power-gen-
eration sources at times of peak de-
mand,” wrote Cara Carmichael of Rocky
Graph: RMI courtesy of Cara Carmichael
2
BuildingGreen Spotlight Report
Mountain Institute in GreenBiz. In oth-
er words, as the grid gets cleaner, the
carbon difference between a standard
building drawing from the grid during
the day and an NZE building produc-
ing clean energy onsite becomes trivi-
al. Meanwhile, NZE projects are often
no better than conventional projects in
how much they draw from the grid at
night. Carbon-wise, it could be a wash.   matter how much energy you use, but
The solution
The strategies to address this problem
are relatively straightforward, but they
do require that we start measuring per-
formance with more than just annual
energy use intensity (EUI). The first step
is familiar: focus on efficiency. The tim-
ing disconnect with NZE buildings is ex-
acerbated if the project uses (and gener-
ates) a lot of energy.
The usual passive design strategies can
be used to reduce peak demand and shift
loads to times when the grid is less dirty.
“Everything we’ve done with massing,
passive design, orientation is still im-
portant,” says Ted Tiffany, director of
sustainability at Guttmann & Blaevoet
Consulting Engineers. By harnessing
passive solar energy or utilizing shad-
ing, you can delay or avoid the need for
active conditioning during peak hours.
Tiffany says optimizing for passive win-
ter warm-up will become increasing-
ly valuable as the grid gets cleaner, so
strategies like thermal mass should be
evaluated.
These elements are so important that
the U.S. Department of Energy has an-
nounced a goal of tripling the energy
efficiency and demand flexibility of the
building sector by 2030 relative to 2020
levels. It estimates that doing so would
save between $8 billion and $18 bil-
lion annually by 2030, with annual CO2
emission reductions reaching 80 mil-
lion tons (about 6% of total power sec-
tor emissions) by 2030. These estimates
are based on efficiency and demand
response alone, and do not account for
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
rooftop solar, battery storage, backup
generators, or other technologies that
generate or discharge electricity.
However, realizing this potential will re-
quire that designers and engineers take
time-of-use data into account to opti-
mize passive strategies for the grid. Grid
geeks are fond of saying, “It doesn’t just
when you use it.” Yet the metric that’s the
basis for the NZE buildings, EUI, doesn’t
reflect this timing aspect at all.
The GridOptimal program from New
Buildings Institute (NBI) and U.S. Green
Building Council (USGBC) seeks to
change that. It encourages practitioners
to use two metrics to measure how well
the building’s energy-use patterns align
with the grid’s expected ability to deliv-
er low-carbon energy:
• grid carbon alignment: the degree
to which the building demand
contributes to upstream grid carbon
emissions over the course of a year
• grid peak contribution: the degree
to which a building’s demand con-
tributes to load on the grid during
system peak hours
All the data one needs about one’s re-
gional grid have been forecasted by
NREL’s Cambium tool—including de-
mand forecasts by state for every hour
of the year. Using a calculator provided
by NBI, practitioners can calculate the
above metrics after inputting a design’s
net demand profile from its energy
model.
“Static measures” like orientation, ther-
mal mass, and passive solar heat gain
“can make a real difference for making
the building less peaky,” says Alexi Mill-
er, lead engineer at NBI. NZE buildings
just need to optimize for that in addi-
tion to energy efficiency. The calculator
allows designers to “run a couple of de-
sign cases” and see “broad trends” indi-
cating which design strategies are best
for the grid, says Miller.
GridOptimal
GridOptimal was first introduced
in 2018. It was integrated into
LEED as an “alternative compli-
ance path” Pilot Credit in Febru-
ary 2021. It can be used to earn
one or both of the LEED points
available under the original LEED
credit, plus a third “exemplary
performance” point for showing
even better results. The LEED
credit that this alternative com-
pliance path applies to is called
“Demand Response” in LEED
version 4 and “Grid Harmoniza-
tion” in LEED version 4.1.
Much of the intent of GridOpti-
mal is already included in v4.1’s
Grid Harmonization credit; the
GridOptimal Pilot Credit basically
provides more structure and
guidance for teams on how to
earn those points, including
a spreadsheet for calculating
scores on eight different metrics.
GridOptimal also provides an
incentive for project teams to
just start thinking about these
issues: there is a point available
for using the calculator and
reporting the scores regardless
of how good they are.
How carbon intensive is that
electricity anyway?
One of the reasons that GridOp-
timal includes a handful of dif-
ferent metrics instead of just one
is that there are different ways of
calculating the carbon emissions
of a kilowatt-hour of electricity.
The simplest approach is to just
take the average of all the dif-
ferent sources of electricity that
are providing power to the grid.
These average “grid emission
factors” are widely available for
locations around the world.
But the reality, as noted above,
is that these factors are changing
all the time as different power
sources come online or shut
down. So those numbers can be
seasonal or can be reported in
real time down to the hour or
even to the minute.
continued
3
BuildingGreen Spotlight Report
2. NZE Buildings Lack the
Flexibility to Shift Loads
in Real Time
Another consequence of not considering
when a NZE project pulls energy from
the grid is that these projects rarely
have active systems for shifting demand
loads to other parts of the day.
The climate downside
As previously discussed, pulling ener-
gy from the grid at the wrong time has
implications for carbon emissions. NZE
buildings pull energy when solar ener-
gy isn’t available onsite anymore, which
often coincides when the grid is dirtiest.
But the grid is also a changing, dynamic
thing. The dirtiest hour on the grid cer-
tainly shifts over seasons and, with elec-
trification of vehicles and buildings, may
change drastically over time. Therefore,
static design strategies for shifting loads
can’t completely solve the problem.
By one estimate, having the ability to
actively flex loads on demand would
enable an all-electric office building in
New York City to reduce emissions up to
10%, according to Rocky Mountain Insti-
tute, based on the grid mix expected by
2030. As we near a fully decarbonized
grid, the same office building could re-
duce emissions by 40% just by flexing its
demand.
From a project perspective, this is ex-
citing because demand flexibility could
bridge the gap between net-zero energy
and net-zero carbon, or even make the
latter more affordable. “Projects could
be [net-zero carbon] with less solar than
it would take to be [net-zero energy] if
storage or other load shaping were used
to optimize the [time-of-use] carbon im-
pact of energy consumption or renew-
able production” says Joshua Radoff,
zero carbon cities advisor for Local Gov-
ernments for Sustainability (ICLEI).
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
The solution
There are many technologies that en-
able buildings to actively shift when
they consume energy. Some are already
in place as part of demand-response
programs and could be utilized more
regularly to reduce energy demand at
high-carbon hours. One estimate from
the U.S. Department of Energy predicts
that around 15.6 GW of new, dispatch-
able peak-reduction capability will be
added by 2030, with 6.3 GW provided
by residential buildings and 9.3 GW by
commercial buildings. That’s around 1.5
times more than today’s programs pro-
vide.
In most places, there aren’t yet policies
or rate structures to encourage regular
load shifting, but they are coming, says
Hershberg. “Right now, it is about de-
signing dynamic systems” that can be
programmed as those policies develop,
she says.
Carmichael agrees. And even before
policies supporting dynamic pricing
become widespread, changes in how
energy is generated and used will cause
the timing of peak demand charges to
fluctuate: “Peaks are going to shift all
around,” notes Carmichael “Having
some level of flexibility will help [own-
ers] manage costs.”
Thermal storage is one system for the
job. For space heating and cooling, ice
has been used for thermal energy stor-
age for a few decades (see Buildings on
Ice: Making the Case for Thermal Ener-
gy Storage), but hot water can also store
thermal energy and then be used for
space heating. These systems are not al-
ways “synonymous with energy efficien-
cy,” says Brian Turner of CMTA, since it
takes energy to run these supplemental
systems. But they save owners money
through reduced demand charges, and
if they get more efficient, they could sig-
nificantly reduce carbon emissions.
There are also questions about
how widely we define the area
served by the grid in any partic-
ular region. The U.S. electricity
grid is made up of three me-
ga-regions: eastern U.S., western
U.S., and most of Texas. (Texas’
isolation from the other two
regions is part of the reason that
its grid failed so dramatically in
February 2021.) But within these
three major regions are a host
of subregions, and the amount
of power that can flow between
these subregions is limited. So
“average” pounds of CO2 per
kilowatt-hour can be more or
less local.
Even a very local and timely
average doesn’t give the most
relevant number, however.
That’s because when a building
uses more energy, or stops using
energy, it affects the demand
for more power plants to come
online, or to shut down. And
if the plants starting up are
burning fossil gas and emitting
lots of CO2, you could argue that
a building’s ability to use less
energy affects not the average
CO2 on the grid, but the CO2
emissions of those plants on the
margin; the ones coming online
or going offline. These “marginal”
emission rates tell a very differ-
ent story than the averages—and
they’re the ones that figure into
the GridOptimal metrics.
4
BuildingGreen Spotlight Report

In terms of plug loads, many appliances

can load shift with a smart plug. Dish-
washers, refrigerators, and water heat-
ers could all be timed to run at 1 p.m.
instead of 6 p.m. Meanwhile, smart ther-
mostats can instruct our heating or cool-
ing systems to condition the space when
solar energy is coursing through the grid
and apply a wider temperature range to
ease up on demand at other times.

We have the technology to direct our

“symphony of devices to match produc-
tion,” says McAllister. But without an in-
centive structure, few are stepping up to
be the conductor.

A notable exception is the company Photo: Paul Reitano

OhmConnect, an aggregator that signs
up end users to control the demand of
tens of thousands of devices. OhmCon-
nect has proven that it can reliably dial
down the demand of these devices when
called upon. Instead of firing up a pow-
er plant to meet demand, grid operators
can have OhmConnect simply eliminate
that demand instead. This equivalency
has allowed OhmConnect to bid into the
energy markets as if it were a 150-mega-
watt power plant. Instead of paying for
fuel to burn, like a gas-fired power plant,
OhmConnect pays end users for the abil-
ity to delay their water heater or refrig-
erator from kicking on, often by as little
as fifteen minutes.
OhmConnect’s business model has filled
a void—especially in the residential
market. “Occupants are not in the busi-
ness of managing energy use,” says Car-
michael. “It needs to be automated and
done in real time for them.”
OhmConnect provides this service as a
third party between the energy consum-
er and the utility company. But in some
situations, either the consumer or the
utility might want to manage demand
themselves. “There may be some build-
ing managers that want visibility,” says
Carmichael, even though the majority
of buildings are small- or mid-sized and
In this Vermont home, an additional buffer tank (right) is ready to be installed, which
will add more thermal storage for the home's air-to-water heat pump system.
don’t have a full-time building manager.
Plus, utility-controlled demand response
has the potential to reduce total system
cost and make demand flexing more of
a firm resource, she says. They’ve just
been slow to innovate in this arena.
Each model has implications for how to
design a load flexing system, so design
teams need to be fluent in the options
available in order to decide what’s best
for the client.
In terms of designing and specifying
those systems, GridOptimal has metrics
for gauging active load flexibility, too:
• short-term demand flexibility:
the building’s ability to reduce
demand (shed) for one hour
• long-term demand flexibility:
the building’s ability to reduce
demand (shed) for four hours
• dispatchable flexibility: the
building’s ability to automatically
reduce demand for 15 minutes,
controlled by a utility or third
party

Net-Zero Energy Isn't the Real Goal: 8 Reasons Why 5

BuildingGreen Spotlight Report
3. NZE Buildings Supply
Energy to the Grid at the
Wrong Time
Producing renewable energy onsite is
foundational to NZE buildings. Since
they have to generate enough energy in
the few hours that renewable energy is
available to offset the amount of energy
they consume year round, they often ex-
port excess renewable energy to the grid
whenever the sun is shining.
The climate downside
For grids that get a majority of their re-
newable energy from solar, NZE build-
ings are often exporting energy when
the grid is already at its cleanest. From
a carbon perspective, this means that
solar generation is not displacing as
much carbon as is associated with the
power that the building draws from
the grid. Henry Richardson from Watt-
Time gives an example in this webinar
of a net-zero-energy project in Califor-
nia where the kilowatt-hours net out
perfectly (10,000,000 kWh consumed
The Sonoma Clean Power Headquarters building is a GridOptimal pilot project. The retrofit will include high efficiency rooftop heat
pumps and smart VAV diffusers, both of which can be controlled for demand reduction.
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
and 10,000,000 kWh generated), but the
solar array only avoids 88% of the car-
bon emissions caused by the building’s
energy use.
In the cleanest grids, adding more solar
energy onto the grid could also contrib-
ute to some renewable energy sources
being curtailed—literally blocked from
sending electricity to the grid. Some-
times users are paid to use curtailed
energy, but often the resource is just
wasted, hurting the bottom line of re-
newable energy providers. Almost 1.6
terawatt-hours (million mWh) were cur-
tailed in California in 2020, according to
California ISO, and that number is in-
creasing dramatically every year.
The net-zero-energy framework doesn’t
take into account these carbon or grid
impacts, instead focusing on a kWh-for-
kWh exchange.
The solution
From a grid perspective, what’s needed
is a way to access renewable energy at
times in the day when it can displace
Rendering: EHDD
6
BuildingGreen Spotlight Report
those fossil fuel peaking plants and
more of it can be accommodated on the
grid.
This need is already justifying some to
install solar photovoltaics on an east-
west orientation, instead of facing south.
The panels might generate less total en-
ergy, but they’ll be generating at times
when the grid needs more clean energy.
“We’re doing more and more projects
with east/west racking,” says Hershberg.
“It extends the time range for PVs.”
The other solution to extending the life
of renewable energy is batteries.
Adding a battery to an NZE project
makes the system a virtual power plant
capable of providing renewable ener-
gy when it’s most beneficial. However,
exactly when the battery discharges re-
newable energy, and who it is beneficial
for, depends on how it is being used.
• Reduce demand charges: the bat-
tery discharges during the building’s
period of peak demand to smooth
out the building’s load profile. The
building owner will thus realize
savings on their energy bill.
• Respond to time-of-use rates: the
battery discharges when the cost of
energy is highest in order to reduce
demand during those times. Building
owners save on their energy bill.
• Participate in an aggregator pro-
gram: a service like OhmConnect
links the capacity of thousands of
batteries and bids that capacity
into the market, just like a small
power plant would. The building
owner is paid for participating.
• Perform carbon arbitrage: the
battery is charged when renewable
energy is available and discharges
when the marginal emissions rate
of the grid is high, specifically to
displace as much carbon emissions
as possible. The building owner
may not realize any direct sav-
ings compared to net metering.
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
All of these uses are likely to increase
the carbon savings of an NZE project
over one without a battery because they
expand the time when renewable ener-
gy can be utilized. But only the last use
case is what’s ideal from a carbon stand-
point. That’s because current rate struc-
tures and energy markets optimize for
cost, not for carbon. For example, time-
of-use rates reflect how expensive the
energy is to generate, not how carbon
intensive it is—and those don’t always
match up. However, without a carbon
price, it is hard to see what financial in-
centive anyone would have to use a bat-
tery strictly for carbon arbitrage.
Nevertheless, there are examples of
projects experimenting with carbon ar-
bitrage. Lubber Run is a net-zero-energy
community center in Arlington, Virgin-
ia. Instead of adding a backup genera-
tor, the project chose battery backup.
The battery only provides power for
critical uses during a power outage, but
“we were still able to get rid of the gen-
erator all together,” says Turner.
That left the question, “How are we go-
ing to dispatch this resource the other
99.9% of the time?” according to Turn-
er. Since the project was a government
building, it had negotiated a special
rate with the utility. Without a time-of-
use rate or demand charge, there was
no financial benefit to dispatching the
battery on a regular basis. But with cli-
mate already a central theme for the
NZE project, the engineers programmed
the battery to charge when the solar PV
system was generating energy and then
discharge five or six hours later. “Solar
dominates the emission factors in that
market,” says Turner. It would be better
to get a signal from the grid about the
carbon content hour by hour, but the
capability didn’t exist. So the engineers
took what they knew about the grid and
did what they thought would displace
the most carbon emissions. “It is crude
but still effective,” says Turner.
7
BuildingGreen Spotlight Report

4. NZE Buildings Make Elec- burned in buildings and vehicles, on the

trification More Expensive
Because NZE buildings use energy at the
wrong time and lack the ability to flex
loads, they could drive peak load on the
grid higher. As electrification adds de-
mand to the electrical grid, peak load
will determine how much energy prices
will rise.
The climate downside
There’s broad consensus now that elec-
trifying buildings and the transportation
sector is the fastest path towards decar-
bonization. That’s because the grid is
moving toward more carbon-free sourc-
es of electricity, so electricity used in
buildings and vehicles is getting cleaner
all the time. Any gas or other fossil fuels
other hand, will always emit carbon.
However, electrifying more things
means more demand for electricity.
There are two ways the grid can meet
that demand. One is cheap, and the oth-
er is expensive.
Contrary to what one might assume, the
cost of the electric grid is not driven by
how many kilowatt-hours are consumed
over the course of the year, but mainly
by the peak demand that that grid must
serve. There must be enough power gen-
erators, transmission lines, and substa-
tions to deliver whatever power is need-
ed on the hottest or coldest (depending
on the climate) day of the year. More in-
frastructure must be added if that peak
goes up, but not much more infrastruc-
ture needs to be added if there are six

Graph: U.S. Department of Energy from the report “A National Roadmap for Grid-Interactive Efficient Buildings.”
License: Public domain
The U.S. The Department of Energy has analyzed which efficiency interventions are most likely to drive peak
demand savings. The answer seems to be HVAC and envelope efficiency. Here, CAC stands for central air
conditioning.

Net-Zero Energy Isn't the Real Goal: 8 Reasons Why 8

BuildingGreen Spotlight Report
days that approach peak load instead of
three. In fact, it’s more cost effective if
we use the assets that are already paid
for.
For that reason, the most affordable
path to electrification is adding new
electric demand at non-peak times. In
the process, we’d be increasing the total
amount of electricity consumed but flat-
tening the load curve.
The expensive path would be to contin-
ue to add new electric demand during
peak demand times, in which case the
grid would need significant infrastruc-
ture upgrades to serve a higher peak
load.
A study by Vibrant Clean Energy found
that if we committed to reduce electric
grid emissions by 95% from 1990 levels
by 2050, it would cost $473 billion less to
reach that goal by implementing energy
efficiency, demand-side management,
demand response, distributed storage,
and distributed generation than with-
out these distributed energy resources.
“The striking result is that the cost sav-
ings come with relatively little change
in the macro-scale view of installed ca-
pacities and generation stack,” write
the authors. “This is because a small
change in the tails of production and
demand can have amplified cost impli-
cations throughout the system.” In oth-
er words, having a little more control
over the shape of the grid’s load profile,
a.k.a. changing the “tails of production
and demand,” is what would enable us
to decarbonize with roughly the same
amount of grid infrastructure that we
have today.
Cisco DeVries, chief executive officer at
OhmConnect, puts it more starkly. “If we
don’t learn to flex demand in real time,
as if it were dispatchable power in the
same way we manage supply, we will
blow up the grid long before we get to
zero carbon.” Whether we would actu-
ally “blow up the grid” or just pay more,
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
it seems clear that demand flexibility is
key to affordable, system-wide decar-
bonization.
The solution
The solutions described above—for
shifting the times when a building uses
energy and when it delivers energy
generated on-site to the grid—all apply
here. But there are additional opportu-
nities as buildings and vehicles get elec-
trified, because much of the additional
load added by that electric equipment
can be time-flexible.
Heat pumps for space and water heat-
ing—the biggest energy loads to switch
from gas to electric in most buildings—
are prime candidates for time shifting.
Water heaters store hot water, so they
can easily build up some extra heat when
power is plentiful and coast through the
times when it’s not. Heat pumps respond
to a thermostat. Expanding the dead
zone in that thermostat extends the time
that the system can coast between runs.
With the right algorithms, those down-
times can be at least partially aligned
with peak demand on the grid.
The biggest opportunity is in electric
vehicles, which are effectively big bat-
teries on wheels. They rarely need to be
charging every minute they’re plugged
in; they can usually be set to charge
when it works best for the grid and pro-
vide cost savings for the customer in
the process. Vermont’s Green Mountain
Power currently provides a free Level
2 charger to any Vermont resident who
buys an electric vehicle and gives pre-
ferred pricing to customers who allow
the utility to delay charging during en-
ergy peak events (usually five to seven
times per month lasting a few hours).
But timing the charge of electric vehicles
is just the beginning. On the near-term
horizon is vehicle-to-grid or bi-direc-
tional charging, which lets a homeown-
er, building manager, or even the utility
9
BuildingGreen Spotlight Report
tap into those car batteries when need-
ed to meet peak electricity demand. Giv-
en the huge avoided cost of adding infra-
structure to meet those peak loads, just
tapping into those batteries a few times
a year could be very lucrative for every-
one involved. And if future generations
of solid-state or other batteries are not
as sensitive to cycling as today’s lithi-
um-ion cells, drawing from car batteries
could become a more frequent practice
with deeper potential peak-load reduc-
tions.
5. NZE Buildings Are Not
Resilient to Power Outages
The onsite photovoltaics in most net-ze-
ro-energy buildings have to shut down
when the grid goes down to protect line
workers from being electrified by power
coming from the “wrong” direction. As a
result, despite having solar panels gen-
erating power, they can’t use it when the
grid goes down and have to shut down
entirely or rely on back-up generators.
Reynold's Landing is a development of 62 single-family homes in suburban Birmingham, Alabama, with its own microgrid. The solar
photovoltaics, battery storage system, and 1MW natural gas-fired power generation nearby mean this community could continue to
operate indefinitely in the case of a grid-level power outage.
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
The climate downside
Fossil-fuel-powered generators emit CO2
whenever they’re running, which is not
just when there is a disruption but also
for regular testing. In addition, just hav-
ing them onsite perpetuates the need for
fossil-fuel supply lines: gas lines or die-
sel tanks and delivery contracts.
At the same time, one impact of climate
change in many parts of the world is
more frequent storms, wildfires, and
other conditions leading to disruptions
of the electricity grid, so the need for
back-up power is increasing.
The solution
The high-performing enclosure of
net-zero-energy buildings gives them
some inherent resilience in the form of
passive survivability: they can remain
habitable without power much longer
than conventional buildings. And their
low power loads make them good candi-
dates for battery back-up systems, which
Photo: Alabama Power
10
BuildingGreen Spotlight Report
can power at least essential equipment
when the grid goes down. The rest of
the year, those batteries can help shift
building loads and supply.
The range of those back-up systems can
be extended significantly if the power
inverters on the PV system are “island-
able”—meaning that they can be safely
isolated from the electric grid so that the
PVs can continue to charge the batteries
and supply the facility when the grid is
down.
6. NZE Buildings Don’t
Account for Transportation
Energy
NZE is much easier to achieve in subur-
ban locations, where there’s more room
for solar panels and they aren’t likely to
be shaded by adjacent structures. But
with suburban development come more
commuting and more cars on the road
spewing emissions.
Net-zero certification programs all try
to correct for the suburban incentive by
providing a pathway for buildings in ur-
ban centers to claim offsite renewables
as part of their supply. But these are
stretching the conventional understand-
ing of what it means for a building to be
net-zero energy and still don’t account
for transportation energy.
The climate downside
Transportation energy used to commute
to office buildings generally exceeds op-
erating energy use, according to calcu-
lations done by BuildingGreen. It might
not be much more—11% more than the
energy used in a new code-compliant
office building, and 16% more than the
average existing building. But rarely do
people consider transportation energy
intensity.
The solution
LEED Zero Energy certification, like all
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
the other NZE programs, ignores trans-
portation energy, but LEED Zero Car-
bon certification includes it based on
the methodology in USGBC’s Arc data
reporting platform. So there is prece-
dent for adding estimates of transporta-
tion-related emissions to make the pic-
ture more complete and to counter the
incentive for NZE buildings to contrib-
ute to suburban sprawl. Short of that,
NZE buildings can still contribute to the
decarbonization of the transportation
sector if they make space for electric
vehicles—both on the grid and on the
ground.
All the solutions mentioned thus far for
shifting loads and extending the avail-
ability of renewable energy would help
maximize our existing grid infrastruc-
ture for new EV charging loads. Making
space on the existing grid for these new
loads will be crucial for keeping electric
rates affordable as more people make
the switch.
Building developments can also support
EVs by spatially providing for parking
and charging infrastructure. McKinsey
& Company estimates that between 11
and 30 million passenger car chargers
will be needed by 2030. Retrofits cost
more than installing chargers at new
developments because they involve
upgrading panels and circuit breakers,
purchasing new cables and wiring, and
engaging in trenching and boring to run
electrical conduit. Installing this infra-
structure upfront would both reduce
overall costs and speed up EV adop-
tion—both of which ultimately helps de-
carbonize the transportation sector.
7. NZE Buildings Use
More Embodied Carbon
NZE emphasizes energy efficiency in
operations but doesn’t take into account
embodied carbon. In fact, high-perfor-
mance building assemblies typically
have higher embodied carbon by virtue
of having more components and thicker
11
BuildingGreen Spotlight Report
walls that use more structural materials
and contain more insulation.
The climate downside
Practitioners are beginning to under-
stand that there is a tipping point where
certain energy-efficiency features begin
contributing more carbon emissions in
embodied carbon than they’ll save over
the course of the building’s operation.
Designers at PAE found this to be true
when they estimated the greenhouse
gas emissions associated with two 30
EUI, 40,000 square-foot buildings just
200 miles away from each other—one in
a low-emissions grid region and the oth-
er in a high-emissions grid region. The
building connected to the low-emissions
grid would contribute annual green-
house gas (GHG) emissions of 14,000
pounds of CO2e, whereas the identical
building on the high-emissions grid
would contribute a staggering 612,000
pounds of CO2e on an annual basis. “That
started to change the discussion around
energy efficiency,” says Hershberg. For
the building on the low-emissions grid,
using a lot of insulation just to cut a few
EUI points didn’t really improve total
carbon emissions, whereas the emis-
sions cost to improve efficiency in the
high emissions grid “paid for itself.” By
getting too focused on EUI, practitioners
might pursue efficiency without realiz-
ing they’re in the zone of diminishing
returns, says Hershberg.
Michelle Amt of VMDO recently con-
ducted a carbon analysis of three of
her firm’s projects—two of which were
net-zero-energy projects, and one of
which was designed to be energy effi-
cient but less aspirational. She was sur-
prised to find that the net-zero-energy
projects didn’t save much more carbon
than the other project.
Amt estimated that, by 2030, the ener-
gy-efficient building represented about
a 45% improvement in GHG emissions
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
over a baseline. One net-zero project did
slightly better, representing a 46%–55%
improvement. But the other net-zero
project did slightly worse, at 31%–44%.
Part of that was because Virginia re-
cently adopted a clean energy standard,
which means electricity will be cleaner
for everyone, closing the gap between
an NZE building and a conventional
one. But the rest was due to fairly high
embodied carbon tallies on the net-ze-
ro-energy projects compared to the
third project, which was an extension of
an existing building.
The solution
Amt’s conclusion? That net zero ener-
gy “isn’t the home run that we think it
is.” She thinks the goal still makes sense
for some typologies, especially schools,
where benefits like the operational sav-
ings and opportunities to enrich the
learning environment fit perfectly. “But
the enthusiasm has been tempered,” she
says. “We’ve started to say, ‘Let’s be real
about what this means for climate ac-
tion.’” The firm now thinks more about
the value of renovation and “the conver-
sation about embodied carbon” is hap-
pening earlier, says Amt.
8. NZE Buildings Don’t
Serve the Collective
NZE is all about offsetting the building’s
impact with energy resources that can
be found onsite. However, there might
be opportunities that are missed when
we focus building by building.
The climate downside
NZE buildings have and do “contribute
on the climate front,” says Radoff. But
the approach is insular. It seems to be
asking, “What can I do for me?” accord-
ing to Radoff. “If you assume you can
clean your load while the rest of the grid
is dirty, you are under false pretenses.
You should be focused on cleaning the
12
BuildingGreen Spotlight Report
grid for everyone.” Others have ex-
pressed a similar sentiment, using the
term “grid citizen” to convey that each
building should be geared toward serv-
ing the needs of the collective.
Take the fact that NZE prioritizes onsite
renewable energy production but still
allows for fossil-fuel-based energy sys-
tems. An NZE building might be offset-
ting most of its own carbon emissions,
but by relying on gas, it continues to jus-
tify the gas infrastructure that serves its
surrounding community.
There’s also a potential problem with
NZEs limiting the carbon impact of re-
newable energy systems by encouraging
those systems to be onsite. A PV system
installed on a dirty grid prevents far
more CO2 from being emitted than one
on a clean grid. Take the example from
Henry Richardson of the PV system in
California that was sized to offset 100%
of the project’s energy consumption but
only offset 88% of the project’s opera-
tional carbon emissions because of the
relatively clean grid. The same-sized PV
Graph: U.S. Department of Energy from the report “A National Roadmap for Grid-Interactive Efficient Buildings.” License: Public domain
This graph shows the emissions reduction associated with a MWh of energy savings for each grid region. The takeaway
is that, carbon-wise, regions with dirtier grids (e.g. the upper Midwest) benefit the most from energy efficiency and
demand flexibility.
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
system installed in Virginia would offset
the project’s operational carbon emis-
sions two times over—a total of 261%.
If climate change is a global, collective
problem, should we relax the emphasis
on onsite production in order to maxi-
mize climate impact?
The solution
If our true goal is decarbonization of the
entire energy system, Radoff wonders
if the first priority should be electrifica-
tion. “Our primary responsibility is to
stop combusting,” he says.
Currently, the GridOptimal program
does not ban combustion, and in some
cases, it is possible that switching from
a gas to an all-electric building might
cause a design’s GridOptimal scores to
go down. That’s because the GridOp-
timal program is focused solely on the
needs of the electricity grid. The elec-
tricity grid doesn’t value the emissions
impact of switching from gas to electric;
it just sees increased electricity demand,
which might cause higher peak demand
13
BuildingGreen Spotlight Report
and higher grid-scale emissions. How-
ever, fuel switching isn’t necessarily
penalized in GridOptimal, says Miller.
The metrics are calculated in a way that
normalizes building load factors when
peak demand increases. Miller provided
BuildingGreen with an analysis showing
that electrifying a medium-size office in
four different cities (Atlanta, Chicago,
Phoenix, and Seattle) actually increased
those projects’ GridOptimal scores.
“There are certain places where [Gri-
dOptimal] can incentivize electrifica-
tion,” says Miller. For example, provid-
ing a diesel generator “doesn’t cut it” for
the GridOptimal resilience metric. And
there are other mechanisms in the LEED
rating system too. But “the decision was
made early on” that the GridOptimal
program should be focused on the elec-
tricity grid, says Miller.
Regarding the location of renewable
energy systems, there may be good rea-
sons to continue to promote onsite gen-
eration, says Carmichael. She cites the
importance of distributed generation
for relieving pressure on the second-
ary distribution systems (i.e., neighbor-
hood-level power lines). But still, Radoff
wishes more people thought about “re-
sponding to grid signals” and about the
need for storage or energy production in
order to locate clean energy generation
in places where it will have the most
impact.
From Rebels to Partners
For a long time, caring about carbon has
meant counteracting the impacts of the
grid. Energy-efficient buildings kept the
grid from adding more power plants.
Grid-tied buildings with solar photovol-
taics cleaned the grid mix. And the com-
bination gave rise to the net-zero-energy
building.
Net-Zero Energy Isn't the Real Goal: 8 Reasons Why
“Net-zero-energy buildings are really a
rebellion against the grid,” says Radoff.
Building practitioners had little say over
how power was generated and prog-
ress was too slow, so they found ways to
offset dirty grid energy with their own
clean energy on an annual basis.   
By doing so, building practitioners
pushed the industry forward, but today
the underlying dynamics are changing.
The grid is getting cleaner, and more
of a building’s carbon footprint is in its
embodied energy. Transportation is be-
ing electrified, adding more demand to
manage.
Given these trends, buildings no longer
need to rebel against the grid: they need
to facilitate its transition. “Just make
sure that the buildings are designed so
that they’re prepared for what’s com-
ing,” says Hershberg. For NZE buildings,
that means being able to flex loads pas-
sively and actively—generally becoming
good grid citizens looking out for the
needs of the entire system. NZE projects
also can’t lose track of embodied carbon
or transportation carbon because we
haven’t made as much progress on those
as we have on operational carbon.
It’s time for NZE buildings, and the cer-
tifications and programs that support
them, to evolve in support of a decar-
bonized future for everyone.
14
BuildingGreen Spotlight Report

Continuing Education
To receive continuing education credits, take this quiz
online at www.buildinggreen.com/spotlight/nze.

1 AIA HSW and 1 GBCI credits

Course Instructors: Candace Pearson and Nadav Malin

Course Level: Advanced

Instructions Learning Objectives

If you purchased this report, or if you are Upon completion of this course, partici-
a BuildingGreen Premium member, you pants will be able to:
can get continuing education credits by ®

1. Describe why focusing on carbon in-

successfully completing this quiz on our
website.
For BuildingGreen to automatically report
your CEUs, you will need to add your
AIA identification info to your profile, at
www.buildinggreen.com/user.
stead of on energy at the building scale
is a better choice for the environment.
2. Name eight reasons why net-zero-
energy buildings are not necessarily
environmentally responsible, and iden-
tify solutions for each of the eight
problems.

Description 3. Understand the GridOptimal program

Net zero-energy (NZE) projects are a big
step in the right direction, but we must
start designing and operating them dif-
ferently to accelerate the transition away
from carbon emissions in the building
sector.
and how it contributes to better envi-
ronmental outcomes.
4. Define “demand response” and “de-
mand flexing” and explain how these
strategies can reduce greenhouse gas
emissions.

Below we list eight ways that NZE projects

miss the mark on climate goals, including
how they affect the electricity grid, trans-
portation, embodied carbon, and resil-
ience, and how we can course-correct to
achieve our goals.

Net-Zero Energy Isn't the Real Goal: 8 Reasons Why 15

 QUIZ QUESTIONS

1. T he U.S. Department of Energy has an- 6. H

 aving the ability to actively flex loads on demand
nounced a goal of ____ the energy efficien- would enable an all-electric office building in New
cy and demand flexibility of the building York City to reduce emissions up to _______%.
sector by 2030 relative to 2020 levels.  a. 5%
 a. Doubling  b. 10%
 b. Tripling  c. 20%
 c. Quadrupling  d. 100%
 d. Maintaining  e. None of the above

2. _ ______ and _______ power plants can’t 7. Hot water and ice can both be used for _______.
be ramped up or down quickly enough
 a. Energy efficiency
to compensate for a sudden loss of solar
energy or sudden increase in demand.  b. Smart thermostats
 c. Thermal storage
 a. Nuclear; hydro
 d. All of the above
 b. Coal; geothermal
 c. Nuclear; coal
8. Which one is the most beneficial for carbon
 d. Coal; hydro savings but doesn’t have direct financial
benefits for owners?:
3. A
 nnual _______ is the wrong performance  a. Reducing demand charges
metric if we want to reduce carbon emis-  b. Responding to time-of-use rates
sions from a building’s electricity use.
 c. Participating in an aggregator program
 a. Net-zero carbon  d. Performing carbon arbitrage
 b. Time of use
 c. Energy use intensity 9. E lectric vehicles are a promising solution for
 d. None of the above which one of the following problems?
 a. Expensive electrification
4. G
 ridOptimal uses which metrics to match a  b. Lack of resilience to power outages
building’s energy-use patterns with the grid’s
 c. Inability to flex loads in real time
expected ability to deliver low-carbon energy?
 d. Not serving the collective
 a. Grid carbon alignment
 b. Grid peak contribution 10. W
 hat is the biggest reason that net-zero
 c. Grid energy use intensity energy is no longer the real goal for buildings?
 d. a&b  a. Passive design is more important
 e. a&c  b. The grid is getting cleaner
 f. All of the above  c. Energy use intensity is a better metric
 d. Embodied carbon is relatively unimportant
5. I n LEED v4.1, the Demand Response cred-
it from v4 was renamed _______:
 a. Grid Harmonization
 b. GridOptimal
 c. Demand Flexibility
 d. Load Management

TAKE THE OFFICIAL QUIZ

www.buildinggreen.com/spotlight/nze