Sustainable Zero Net Energy – Identifying the Essentials for Solutions

The document examines the transition toward zero net energy (ZNE) buildings and distributed energy resources (DERs), highlighting the misalignment between traditional utility business models and the bidirectional power flows of ZNE designs. It argues that current volumetric rate structures and net energy metering (NEM) can create economic inefficiencies and equity issues. To resolve this, the authors propose a framework involving more rigorous measurement of DER impacts, the use of price signals to align customer incentives with grid value, and the evolution of utility models toward either incentive-based regulation or a 'network utility' approach. The paper emphasizes the need for metrics that account for short-term grid interaction rather than just annual energy balances.

• Zero net energy (ZNE) buildings, while achieving an annual energy balance, can create significant short-term fluctuations in grid demand and supply because electricity must be matched in real-time, potentially leading to steeper peaks and valleys for grid operators.
• Traditional volumetric rate structures and retail net energy metering (NEM) may lead to a 'cost shift' where the fixed costs of utility service are not fully recovered from customer-generators, potentially creating equity issues between NEM and non-NEM customers.
• The value of distributed energy resources (DERs) to the grid is highly variable and non-linear, depending on the specific timing, magnitude, and location of the resource relative to system needs, such as peak demand or high congestion areas.
• Current ZNE definitions are predominantly based on annual balances; there is a need for Load Matching and Grid Interaction Indicators (LMGI) to better quantify how buildings interact with the grid on smaller time scales.
• Two potential evolutions for utility business models are proposed: an incentive-regulation model where utilities are rewarded for achieving DER deployment targets to minimize system costs, or a 'network utility' model where the utility focuses on grid operation and creates markets for energy and ancillary services.
• Third-party ownership and financing, such as leases and power purchase agreements (PPAs), have significantly lowered barriers to solar adoption, accounting for 57% of the market in California and Colorado.

APA

Lacy, V., & Buller, S. M. (n.d.). Sustainable Zero Net Energy – Identifying the Essentials for Solutions. RMI. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2012-08_ACEEESustainableZeroNetEnergy.pdf

Chicago

Lacy, Virginia, and Susan M. Buller. Sustainable Zero Net Energy – Identifying the Essentials for Solutions. RMI, n.d. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2012-08_ACEEESustainableZeroNetEnergy.pdf.

Wikipedia

{{cite report |last1=Lacy |first1=Virginia |last2=Buller |first2=Susan M. |title=Sustainable Zero Net Energy – Identifying the Essentials for Solutions |publisher=RMI |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2012-08_ACEEESustainableZeroNetEnergy.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lacyndsustainable, author = {Lacy, Virginia and Buller, Susan M.}, title = {{Sustainable Zero Net Energy – Identifying the Essentials for Solutions}}, institution = {RMI}, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2012-08_ACEEESustainableZeroNetEnergy.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }