AN INTEGRATIVE BUSINESS MODEL FOR NET ZERO ENERGY DISTRICTS

This briefing by the Rocky Mountain Institute (RMI) proposes an integrative business model for developing net zero energy (NZE) or ultralow energy districts. The model aims to make NZE developments life-cycle cost neutral or better compared to business-as-usual (BAU) scenarios by utilizing an Integrated Energy Services Provider (IESP) to manage energy systems, financing, and performance requirements, thereby reducing upfront costs for parcel developers and lowering energy bills for tenants.

• The proposed business model achieves net zero energy through a four-step process: identifying on-site renewable energy capacity to set an energy budget, implementing superefficient district geothermal heating and cooling, establishing design standards to reduce loads by up to 75 percent below code, and iterating these steps to optimize life-cycle cost net present value.
• To make NZE financially attractive to parcel developers, the model suggests three primary mechanisms: third-party ownership of solar photovoltaics (PV), shifting heating and cooling capital costs from individual buildings to a district system, and providing on-bill financing for incremental energy efficiency costs to keep first costs at or below BAU levels.
• Tenants in NZE districts replace traditional energy bills with a combined bill consisting of third-party PV costs, district heating and cooling costs, and on-bill repayment for energy efficiency financing, resulting in a total cost lower than BAU.
• The model centers on an Integrated Energy Services Provider (IESP), which acts as a multipurpose developer, financier, operator, and administrator. The IESP manages a micro-utility for electricity, operates a central district heating and cooling system (preferably geothermal), handles renewable energy deployment, and manages energy efficiency financing.
• The IESP enforces outcome-based energy-performance requirements using Energy Use Intensity (EUI) targets. Noncompliant buildings at completion must either rectify the issue or pay a one-time fee into a revolving fund used for additional renewables or efficiency projects. During operation, tiered billing rates are used to motivate compliance.
• A case study modeled on a 180-acre brownfield site with 6 million gross square feet of mixed-use building area (60% residential, 30% office, 10% other) demonstrated that NZE economics remain favorable even in a 'worst-case scenario' with low electricity rates, cheap natural gas, and no net metering for rooftop solar.

APA

Campbell, I., & Olgyay, V. (2016). AN INTEGRATIVE BUSINESS MODEL FOR NET ZERO ENERGY DISTRICTS. RMI. https://rmi.org/app/uploads/2017/03/Insight-brief_Net-zero-energy8_2.pdf

Chicago

Campbell, Iain, and Victor Olgyay. AN INTEGRATIVE BUSINESS MODEL FOR NET ZERO ENERGY DISTRICTS. RMI, 2016. https://rmi.org/app/uploads/2017/03/Insight-brief_Net-zero-energy8_2.pdf.

Wikipedia

{{cite report |last1=Campbell |first1=Iain |last2=Olgyay |first2=Victor |title=AN INTEGRATIVE BUSINESS MODEL FOR NET ZERO ENERGY DISTRICTS |publisher=RMI |date=August 2016 |url=https://rmi.org/app/uploads/2017/03/Insight-brief_Net-zero-energy8_2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{campbell2016integrative, author = {Campbell, Iain and Olgyay, Victor}, title = {{AN INTEGRATIVE BUSINESS MODEL FOR NET ZERO ENERGY DISTRICTS}}, institution = {RMI}, year = {2016}, month = aug, url = {https://rmi.org/app/uploads/2017/03/Insight-brief_Net-zero-energy8_2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }