Can a System Built, High Performance Home Be “NZEH” and Extremely Affordable at the Same Time? part 5/6
By Stewart Elliott, Co-Founder Right Home Company
Not surprisingly, costs become a much larger and more complicated issue resulting in this installment being turned into 2 chapters.
According to the US Energy Info Admin the avg 1800 sf US home pays ~ $360/mo. for all utility services in 2018. According to DOE and RMI, the average additional construction costs for a NZH in CZ 4 or CZ 5 will be ~ 8% more than base construction costs, or about $29,000 for an 1800 sf home at $200./sf. Financing $29,000 @ 4% for 30 yrs. is <$140/mo. to save $360/mo. – a monthly savings of $220/mo., sounds like a deal to me!!!
There are a number of ways to look at the construction cost and energy/utility cost issue.
SIZE MATTERS; simply put, a bigger house has higher energy costs than a smaller house with the same specs – period; there is more of it, more infiltration, more windows, and more roof and wall area. Not to mention more taxes, insurance, and maintenance.
SAME COST for LARGER at code vs SMALLER above code; Cost to build a to code 2000 sf home @ $180/sf is ~$360,000 with energy costs ~$4,800./yr. COMPARED to a right sized better design with higher specifications 1800 sf ‘std’ RHC home @ $200/sf is also ~$360,000 with energy costs of ~$3,600/yr. – save $1,200 without spending any add’l money - already a positive cash flow
COST OF OWNERSHIP vs. FIRST COSTS MATTER; Let’s use a Mid Southern MI building site which is CZ 5 and has ~ 7,000 DDH and ~450 DDC; a 4% - 30yr. fixed financing costs $4.78 per $1,000 PRINCIPAL borrowed for construction cost and compare to the 1800 sf ‘std’ RHC home.
Using additional Cost to upgrade ‘std’ RHC home to an almost NZEH (360K x 5%) ~$18,000, add $1,035/yr. to financing payments to save $3,000/yr. energy/utility costs – an immediate positive cash flow.
Does it cost more to become an NZEH? The Answer is an OVERWHELMING NO
Let’s remind ourselves of the real issue; save money and our environment at the same time. Our homes consume ~ 40% of the annual US energy budget! Individually, the total annual energy used in the average 2000sf home these days is ~95 million BTUs (converts to ~28,000 kWh) per home with an average total annual energy/utility bill of ~$4,800/yr. IF we assume these BTUs are from the use of fossil fuels, at 1lb. CO2/kWh, we will have released 28,000 lbs. of CO2 per average home per year into our atmosphere.
Compare this to your car and 30,000 mi/yr. @ 25 mpg which is about 1,200 gals of gas and about 24,000 lbs. of CO2.
We suggest you determine what level of home you want; a NZER or NZEH. In both cases, the investment will be an IMMEDIATE POSITIVE CASH FLOW.
1st think rightsized design and site orientation, conservation by reducing materials and energy consumption, HIGH PERFORMANCE SHELL with higher wall and roof R-values, tighter building; 2nd think improved more efficient appliances, equipment and fixtures; and 3rd think of producing the required offsetting energy.