Changes in regulatory requirements, market structures, and operational technologies have introduced complexities that traditional ratemaking approaches can’t address. Poorly designed rates lead to...
The Efficiency Mandate: Net-Zero Neighborhoods
Utilities explore the potential of zero-energy homes.
That’s a substantial premium in today’s depressed housing market, but the benefits are so great that participation remains strong.
SolarSmart homes sell markedly faster than the standard houses, and appreciate in value more rapidly. Their appeal is widespread. The owner demographic is ethnically diverse, and skews toward middle-income families buying their first home, or those upgrading for the first time. Aside from their surprisingly nocuous PV shingles, houses in SolarSmart communities look just like any other new homes—and that’s part of the point.
“One of the objectives of this program was to make these homes available on a wide scale,” Hughes says. “We have homes available as small as 1,100 square feet and as large as 5,700 square feet. We have infill stuff downtown, and houses that are more rural. So we really do have a diverse community of home owners and home builders as well.”
To date, SMUD has built 487 homes—370 under the SolarSmart smart program and 117 under previous zero-energy home initiatives. In 2007, SMUD set a market-penetration goal of 10 percent to 20 percent within 10 years. In 2008, SolarSmart homes exceeded 30 percent of the new home market.
That such gains occurred in the anemic 2008 new-home market may indicate a new direction for builders when the economy bounces back. In fact, the deep recession may accelerate the trend toward more efficient homes.
“In California, home building is way down—probably less than 10 percent of what it was a couple of years ago,” says the DOE’s Pratch. “But many builders feel that due to the recent spike in gasoline prices, homeowners are more concerned with efficiency and lower utility bills. They will probably do a lot more with high-efficiency homes when the market picks up.”
Hughes says SMUD now envisions a future in which the vast majority of new homes in Sacramento would be built SolarSmart. That would have a significant impact on the utility’s generation profile.
The SolarSmart project helps SMUD meet its aggressive board directives on solar and efficiency leadership. It also helps fulfill renewable-portfolio standards. But the bottom line is peak-load management.
“The driving force behind that is the fact that the majority of the energy generated and saved by these homes is generated and saved during peak hours,” says Hughes. “If you projected this model out to all new construction you would see a big benefit for us in terms of peak.” Over the long term, if 20 percent of all single-family homes in SMUD’s territory achieved the kinds of performance demonstrated in the SolarSmart and ZEH programs, the utility would cut more than 100 MW off its summer peak demand.
Such peak-shaving potential is attractive to all types of utilities, including investor-owned utilities seeking to meet compliance requirements or defer peak-serving capacity additions.
“Everything we have achieved can be duplicated in the private utility world, but it does have a lot to do with the disposition of the organization,” Hughes says. “We all have environmental regulations. Every utility has a renewable portfolio goal. This is a pretty cost effective way of utilizing