Net Zero Energy Buildings to Reach $1.3 Trillion in Revenue

BOULDER, Colo. — Revenue for net zero energy buildings will reach almost $690 billion by 2020 and nearly $1.3 trillion by 2035, according to a new Pike Research report.

Titled “Zero Energy Buildings,” the report states that regulations and long-term targets will fuel the growth, which represents a compound annual growth rate of 43 percent.

Europe leads the charge, bolstered by the European Union’s Energy Performance of Buildings Directive (EPBD), which requires nearly zero energy construction in public buildings by 2019 and in all new construction by 2021.

“I think the net zero concept will sort of be proven in Europe and I don’t think its necessarily going to be a huge game-changer in the U.S.,” said Eric Bloom, research analyst at Pike Research. “But there are a lot of multi-national corporations in the building space that have operations in Europe and North America, so best practices from Europe will certainly be applied to the U.S. What it comes down to is that this is a really regulatory-driven market.”

The U.S. does not have a measure as comprehensive, on a national scale, as the EPBD, although some legislation pushes for net zero buildings.

“The only one that’s been implemented at this point is the federal government requirement that all federal buildings will need to be net zero energy starting in 2030, but that’s a really long way off,” said Bloom. “And if you think about it, federal buildings are only about 3 to 4 percent of the total commercial building stock in the U.S. so there’s a lot that isn’t covered under that.”

California is looking at implementing net zero regulations for new construction on residential buildings starting in 2020 and new commercial buildings in 2030, while Massachusetts is discussing 2030 as a date for net zero energy use in all buildings.

While the study showed little current zero energy building activity and minimal plans for the next five years, major building systems companies and construction companies are keyed in on improving the concept and establishing net zero energy buildings as the next gold standard for green building.

“A corollary to that is some companies and organizations are starting to claim that they can build a net zero energy building within the parameters of today’s economics,” Bloom said.

Bloom cited the Research Support Facility at the National Renewable Energy Laboratory in Golden, Colo. — a public-sector construction project that came in within its existing budget while still achieving a zero energy building.

“It did cost more, certainly than a typical building of its size but it was still more or less within earshot of a typical building project,” said Bloom.

Boulder, Colo.-based Pike Research conducted the “Zero Energy Buildings” study in November and December and released the report Jan. 31. All of the company’s reports include primary research—about 30 interviews with leading industry experts—followed by secondary research studying a wide range of literature such as company profiles, public regulatory filings, investor presentation and scholarly and academic articles on the topic.