Economic Feasibility of Achieving Net-Zero Energy in Residential Buildings in the USA

Over the past few decades, residential buildings have been one of the major sectors responsible for a large share of energy demand in the United States (EIA, 2020). However, such high energy demand from residential buildings will cause economic and environmental problems, eventually leading to the growing expectations for implementing net-zero energy buildings (NZEBs) in the near future. Therefore, this study provides a financial framework for implementing NZEBs in the United States residential sector by utilizing two popular renewable energy systems, solar P.V. and geothermal heat pumps. A two-story single residential building in Ann Arbor, Michigan was simulated using the TRNSYS software tool. Specifically, this study analyzed the discounted payback periods of the following four different heating, ventilation, and air-conditioning (HVAC) systems; these are: (1) air-source heat pump (ASHP) (2) PV-integrated ASHP (PV+ASHP) (3) ground-source heat pump (GSHP), and (4) PV-integrated GSHP (PV+ GSHP). In addition, each building’s HVAC system has been subdivided into multiple scenarios based on the level of technological (i.e., P.V. energy conversion rate) and institutional (i.e., CO2 equivalent price of ETS) improvements required to achieve the net-zero emission target by 2050. First, this study reveals high expectations for installing PV-integrated GSHP in residential buildings because PV+GSHP generates electricity using solar and geothermal heat sources. The results clearly show that technological advancements, such as improving the performance of solar panels, have a much more significant effect on reducing the payback periods of heat pump systems compared with raising the CO2 equivalent price of the emission trading scheme (ETS). More specifically, installing a PV-integrated GSHP enables the implementation of NZEB with a payback period of fewer than ten years when the technology reaches a P.V. energy conversion rate of 32.5%. Second, this study highlights the growing demand for renewable energy sources by supporting the broader application of investment tax credits (ITC) to the United States residential sector. Specifically, this study presents reasonable tax credit rates that should be supported by the U.S. federal government when applying solar and geothermal heat sources to residential heat pump systems. Results show that the current 26% solar tax credit rate is reasonable under today’s technological and institutional context. Meanwhile, the high investment cost of GSHP does not ensure economic investment but requires government subsidies that far exceed the current 26% geothermal heat pump tax credit rate. In conclusion, this research framework clarifies the ambiguous issues related to technology and policy that must be addressed to allow NZEBs to become more economically feasible in the United States residential sector. Furthermore, implementing NZEBs with reasonable payback periods requires significant improvements in technology and policy. This goal can hardly be achieved with short-term efforts. Therefore, many building engineers, technicians, and policy makers are required to play the role as a frontier of this challenge and actively contribute to achieving the net-zero emission target by 2050.PhDArchitectureUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/176509/1/hyeonsoo_1.pd