Economic Evaluation of a Zero Net Energy (ZNE) Home

A weak economy and rising energy prices have made people more aware of the requirements for saving energy. Additionally, initiatives have been put into place to try encouraging the adoption of energy efficient options and renewable energy systems. One approach of alleviating the impact of increasing energy prices in the residential sector is to consume zero net energy. The objective of this paper is to determine the economic feasibility of converting an existing home into Zero Net Energy (ZNE) home. An economic analysis is conducted of multiple arrangements between renewable energy systems and energy efficient options in Portland, Oregon. A second economic analysis is conducted to compare the installation of renewable energy systems and energy efficient options in Oregon against two other states, namely Texas and North Carolina. From the first analysis it is determined that the installation of renewable energy systems alone is the best alternative according to a Present Worth comparison. From the second analysis it is determined Portland, Oregon is the best alternative. By conducting a sensitivity analysis by separately changing the annual electricity increase, Minimum Acceptable Rate of Return (MARR), study period, and interest rate on the loan for the investment, the best alternative result for the first analysis is unchanged until annual electricity increases above 24.5% or the loan interest rate increases above 10%. For the second analysis the best alternative result is unchanged until the annual electricity increases above 16%. It is established that the present worth for a ZNE home in Portland, Oregon is negative, however it is better than the other alternatives due to the high incentives and tax credits for renewable energy systems