THE ECONOMICS OF ZERO-ENERGY HOMES

The report finds that the incremental cost of building ZER homes is modest, averaging 1.8%, while ZE homes average a 7.3% premium. These costs often fall below consumer willingness-to-pay and mortgage-savings thresholds. The analysis identifies heat pumps, LED lighting, and ENERGY STAR appliances as cost-optimal measures and projects that ZE incremental costs will drop to 3.1%–5.5% by 2030 due to declining solar PV costs and efficiency gains. It emphasizes the need for skilled labor training and supportive policy frameworks to accelerate adoption across various US climate zones.

• The incremental cost to build zero-energy (ZE) homes is between 6.7% and 8.1%, while zero-energy ready (ZER) homes have a significantly lower incremental cost of 0.9% to 2.5%.
• ZER homes generally meet the mortgage, resale, and consumer willingness-to-pay (WTP) thresholds in most US markets, and they are close to achieving first-cost parity with code-compliant homes.
• ZE homes consistently pass the mortgage threshold and are nearing the resale threshold, aided by the federal solar Investment Tax Credit (ITC).
• Heat pumps are identified as an essential component for ZE and ZER homes, with modern units capable of operating in temperatures as low as -12°F, making them viable even in cold climates like Chicago.
• The use of ENERGY STAR-certified appliances, LED lighting, and EPA WaterSense-certified fixtures is cost-optimal across all modeled locations and can reduce the required solar PV system size by 1.5 kW to 1.9 kW.
• Incremental costs for ZE homes are projected to decrease to between 3.1% and 5.5% by 2030, primarily driven by declining solar PV costs and improved equipment efficiency.
• A shortage of skilled construction labor, particularly for specialty subcontractors, is a significant barrier that increases costs and requires targeted training programs.
• In cold climates (zones 6 and 7), ZE and ZER homes still meet mortgage and resale thresholds, though they require maximizing south-facing solar capacity and may need supplemental electric resistance heating.
• The EPA Indoor airPLUS program, required for DOE ZERH certification, adds approximately $1,000 to the incremental cost of a home.

APA

Petersen, A., Gartman, M., & Corvidae, J. (2019). THE ECONOMICS OF ZERO-ENERGY HOMES. RMI. https://rmi.org/app/uploads/2018/10/RMI_Economics_of_Zero_Energy_Homes_2018.pdf

Chicago

Petersen, Alisa, Michael Gartman, and Jacob Corvidae. THE ECONOMICS OF ZERO-ENERGY HOMES. RMI, 2019. https://rmi.org/app/uploads/2018/10/RMI_Economics_of_Zero_Energy_Homes_2018.pdf.

Wikipedia

{{cite report |last1=Petersen |first1=Alisa |last2=Gartman |first2=Michael |last3=Corvidae |first3=Jacob |title=THE ECONOMICS OF ZERO-ENERGY HOMES |publisher=RMI |date=2019 |url=https://rmi.org/app/uploads/2018/10/RMI_Economics_of_Zero_Energy_Homes_2018.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{petersen2019economics, author = {Petersen, Alisa and Gartman, Michael and Corvidae, Jacob}, title = {{THE ECONOMICS OF ZERO-ENERGY HOMES}}, institution = {RMI}, year = {2019}, url = {https://rmi.org/app/uploads/2018/10/RMI_Economics_of_Zero_Energy_Homes_2018.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }