# Clarifying the Confusing Calculations for Zero Energy Buildings

A zero energy building is one that produces on-site at least as much energy as it uses. As I’ve written here before, the US Department of Energy has been mulling over the various ways to define and calculate zero energy use and recently they made their choice. They’re going with a zero energy balance based on source energy. As it turns out, doing the calculations is a bit confusing.

A zero energy building is one that produces on-site at least as much energy as it uses. As I’ve written here before, the US Department of Energy has been mulling over the various ways to define and calculate zero energy use and recently they made their choice. They’re going with a zero energy balance based on source energy. As it turns out, doing the calculations is a bit confusing.

### Site energy vs. source energy

First, let’s define these two terms.

Site energy – This is the energy used on-site, as measured at the meter. For electricity, just look at the kilowatt-hours you get billed for.

Source energy – This is the energy used on-site plus the energy that went into getting that energy onto the site. For electricity, it’s the kilowatt-hours you get billed for plus the kilowatt-hours of energy that are “consumed in the extraction, processing and transport of primary fuels such as coal, oil and natural gas; energy losses in thermal combustion in power generation plants; and energy losses in transmission and distribution to the building site.” That quote is from the DOE report, A Common Definition for Zero Energy Buildings, released this month.

Of course, you have to define the site boundary, which could be the perimeter of the building or the property line. Any energy that crosses the boundary is counted as delivered or exported site energy.

### Calculating the zero energy balance

I wrote about these calculations a little bit in my article on the four definitions of zero energy use, but it wasn’t as clear as it could have been. This time I think you’ll get it.

The DOE is going with source energy as the basis for zero energy buildings, so let’s see how that works. The first thing you need to know is how to go from site energy to source energy. For that, all you do is multiply by the appropriate conversion factor. The table below is given in that latest DOE document on zero energy buildings and come originally from ASHRAE standard 105.

What confuses a lot of people is that second line. For example, if a home uses 10,000 kWh per year of electricity delivered to the home, it takes 31,500 kWh of source energy to make that happen. So you might think that if you put photovoltaic modules on your roof, you’d need to export 31,500 kWh of electricity to the grid to offset the source energy of the electricity delivered.

Not true! Every kWh that you send to the grid really offsets 3.15 kWh of source energy because that kWh can be delivered to another home instead of the electricity from the power plant, with its 3.15 kWh of source energy. Hence the second line in the table above. Imported and exported electricity both get multiplied by the same conversion factor.

Using a fuel like natural gas on-site can be confusing, too, but if you just use the table above, it’s pretty easy. Let’s put some numbers in an example:

Imported energy

 Type Site Energy Factor Source Energy Electricity 6,000 kWh 3.15 18,900 kWh Natural Gas 40 therms (1172 kWh) 1.09 1277 kWh Total 20,177 kWh

To qualify as a zero energy building, this home would have to offset 20,177 kWh of source energy. Because exported electricity gets multiplied by the 3.15 conversion factor for electricity, that gives us:

E x 3.15 = 20,177 kWh

E = 20,177 kWh ÷ 3.15 = 6,406 kWh

What that means is that you’ve got to produce 6,000 kWh of electricity on-site (renewable only – diesel generators don’t count) to offset the imported electricity and another 406 kWh to offset the natural gas use.

Make sense?

If you’ve got other energy types or fuels in the mix, you do the same thing. Just pick the appropriate source energy conversion factors from the table and calculate the imported and exported energy numbers.

Related Articles

The Department of Energy Makes a Choice in the Net Zero Debate

4 Ways to Define Net Zero Energy Use in Buildings

It’s Time to Settle the Net Zero Energy Controversy!

Photo of power plant by Walter from flickr.com, used under a Creative Commons license. Table of conversion factors from the DOE report, A Common Definition for Zero Energy Buildings.

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#### This Post Has 16 Comments

1. Dan Dean says:

I disagree with the findings
I disagree with the findings of this ruling.

I am an engineer in the energy industry.

My primary point would be: since I am negating the delivered energy, I have removed the losses of delivering such energy from the source as well, thus, eliminating the entire sum of source energy.
If you don’t believe me, let me ask you a question: Where do you think the generated electricity from your home (from solar electric panels let’s say) goes when it leaves your meter? I can tell you that it does NOT go back to the power plants. And I can tell you that it DOES go to the closest available load to your home to be consumed. This is very efficient and minimizes line losses.
In summary there are two aspects to my 1 point:
a) Since the apparent power (read by meter) consumed is offset by solar electric panels, this also eliminates all real power (source energy) needed to deliver the apparent power.
b) There are very minimal losses between apparent power and real power (delivered energy and source energy) from the meter to the nearest load from your home. This is very efficient unlike the utility companies method of delivery.

I would like close with a third thought. If indeed the power companies are in business to turn a profit, and let’s assume they are turning a profit, then the even if we look at net metering wherein all production is purchased at \$.05/kWh (here in Texas) and sold back to the customer at \$.10/kWh, this is still only a 50% profit margin for the energy provider vs. a much smaller profit margin wherein there are such large losses.
They should be backing legislation in every state to enforce Net Metering.
Dan Dean
Greenland Designs
A Division of EWC Group

2. David Butler says:

@Allison, some folks will
@Allison, some folks will surely point out that their electric provider’s conversion factor is lower (or higher) than 3.15.

This is an interesting dilemma since conversion efficiency not only varies widely by state, but by provider. Conversion factor are not readily available for individual providers, and even if they were, they would soon be out-of-date as the generation mix evolves over time.

Here’s what the DoE said about that:

"The Zero Energy definition uses national average ratios to accomplish the conversion to source energy because the use of national average source-site ratios ensures that no specific building will be credited (or penalized) for the relative
efficiency of its energy provider(s)."

3. Allison Bailes says:

Dan, I think you haven’t
Dan, I think you haven’t fully understood the calculations above. They do exactly what you’re saying. By multiplying the exported energy (produced on-site by PV modules) by the source energy conversion factor, you’re canceling out the losses from the power plant inefficiency, transmission &amp; distribution, and the other things that increase the amount of source energy needed.

See my example in the article. If a home imports 6,000 kWh of electricity generated at a power plant, it would need to produce 6,000 kWh of electricity on-site. Unless I misunderstood your comment, I believe that’s exactly what you’re saying is needed. Right?

4. Allison Bailes says:

Indeed you are correct, David
Indeed you are correct, David. I thought about going into that issue but decided against it. As you say, the source energy conversion factors vary from place to place and time to time. Electricity generation in the Pacific Northwest, for example, will be significantly lower than the 3.15 national average because of their high percentage of hydropower.

5. Dan Dean says:

I disagree with the findings
I disagree with the findings of this ruling.

I am an engineer in the energy industry.

My primary point would be: since I am negating the delivered energy, I have removed the losses of delivering such energy from the source as well, thus, eliminating the entire sum of source energy.
If you don’t believe me, let me ask you a question: Where do you think the generated electricity from your home (from solar electric panels let’s say) goes when it leaves your meter? I can tell you that it does NOT go back to the power plants. And I can tell you that it DOES go to the closest available load to your home to be consumed. This is very efficient and minimizes line losses.
In summary there are two aspects to my 1 point:
a) Since the apparent power (read by meter) consumed is offset by solar electric panels, this also eliminates all real power (source energy) needed to deliver the apparent power.
b) There are very minimal losses between apparent power and real power (delivered energy and source energy) from the meter to the nearest load from your home. This is very efficient unlike the utility companies method of delivery.

I would like close with a third thought. If indeed the power companies are in business to turn a profit, and let’s assume they are turning a profit, then the even if we look at net metering wherein all production is purchased at \$.05/kWh (here in Texas) and sold back to the customer at \$.10/kWh, this is still only a 50% profit margin for the energy provider vs. a much smaller profit margin wherein there are such large losses.
They should be backing legislation in every state to enforce Net Metering.
Dan Dean
Greenland Designs
A Division of EWC Group

1. Allison Bailes says:

Dan, I think you haven’t
Dan, I think you haven’t fully understood the calculations above. They do exactly what you’re saying. By multiplying the exported energy (produced on-site by PV modules) by the source energy conversion factor, you’re canceling out the losses from the power plant inefficiency, transmission & distribution, and the other things that increase the amount of source energy needed.

See my example in the article. If a home imports 6,000 kWh of electricity generated at a power plant, it would need to produce 6,000 kWh of electricity on-site. Unless I misunderstood your comment, I believe that’s exactly what you’re saying is needed. Right?

1. Christopher Retzler says:

Allison, from what I am
Allison, from what I am reading it looks like your example home would not have to generate 6,000 kWh of electricity on-site, but would have to export said 6,000 kWh. Is that correct? If so, then I think what Dan is getting at is the lack of off-site credit for the renewable energy that is both generated and consumed on-site.

1. Allison Bailes says:

You’re right, Christopher. I
You’re right, Christopher. I should have said the home needs to export 6,000 kWh, not produce 6,000 kWh. If it uses some of the PV-generated electricity on-site, then it would actually need to produce more than 6,000 kWh.

I went back and re-read Dan’s comment, and I can’t tell if “the lack of off-site credit for the renewable energy that is both generated and consumed on-site” is what he was getting at. Maybe I’m just not getting it myself, but I don’t see how you can give more credit than offsetting all of the source energy.

2. Kevin Salazar says:

I’m in agreement with you Dan
I’m in agreement with you Dan. The owners should not be responsible for the utility factors and the math doesn’t need to be calculated as such. It would appear the “net” zero energy buildings would compromise their profits unless they eliminated their expenses. I wish the DOE wouldn’t remove the word “net” from their favorite term, “zero energy building” because that is misleading. There will never be a zero energy building unless we shut down all sources of power including renewables and just bask in the sunlight. I commented on LinkedIn and compared the words compromise and improvise for that reason. You landed on the bullseye with your comment and I commend you for that and hope others will too. The 2030 challenge isn’t about reducing expenses for the utilities, or invent a new Math calculation or even make politically correct statements or align out grammar for the PRC and Utilities. It is about not compromising our environmental conditions by wasting energy and producing greenhouse gases. My recommendation is to approach owners and improvise their consumption first and then make it profitable for the property owners who are willing to invest in this worthwhile endeavor with the utility companies and create an IRP for a city or town that gives a profit to the property owners while eliminating future expenses forthright utilities which will (as always) be passed on the the customers.

6. David Butler says:

@Allison, some folks will
@Allison, some folks will surely point out that their electric provider’s conversion factor is lower (or higher) than 3.15.

This is an interesting dilemma since conversion efficiency not only varies widely by state, but by provider. Conversion factor are not readily available for individual providers, and even if they were, they would soon be out-of-date as the generation mix evolves over time.

Here’s what the DoE said about that:

“The Zero Energy definition uses national average ratios to accomplish the conversion to source energy because the use of national average source-site ratios ensures that no specific building will be credited (or penalized) for the relative
efficiency of its energy provider(s).”

1. Allison Bailes says:

Indeed you are correct, David
Indeed you are correct, David. I thought about going into that issue but decided against it. As you say, the source energy conversion factors vary from place to place and time to time. Electricity generation in the Pacific Northwest, for example, will be significantly lower than the 3.15 national average because of their high percentage of hydropower.

7. Christopher Retzler says:

Allison, from what I am
Allison, from what I am reading it looks like your example home would not have to generate 6,000 kWh of electricity on-site, but would have to export said 6,000 kWh. Is that correct? If so, then I think what Dan is getting at is the lack of off-site credit for the renewable energy that is both generated and consumed on-site.

8. Allison Bailes says:

You’re right, Christopher. I
You’re right, Christopher. I should have said the home needs to export 6,000 kWh, not produce 6,000 kWh. If it uses some of the PV-generated electricity on-site, then it would actually need to produce more than 6,000 kWh.

I went back and re-read Dan’s comment, and I can’t tell if "the lack of off-site credit for the renewable energy that is both generated and consumed on-site" is what he was getting at. Maybe I’m just not getting it myself, but I don’t see how you can give more credit than offsetting all of the source energy.

9. Kevin Salazar says:

I’m in agreement with you Dan
I’m in agreement with you Dan. The owners should not be responsible for the utility factors and the math doesn’t need to be calculated as such. It would appear the "net" zero energy buildings would compromise their profits unless they eliminated their expenses. I wish the DOE wouldn’t remove the word "net" from their favorite term, "zero energy building" because that is misleading. There will never be a zero energy building unless we shut down all sources of power including renewables and just bask in the sunlight. I commented on LinkedIn and compared the words compromise and improvise for that reason. You landed on the bullseye with your comment and I commend you for that and hope others will too. The 2030 challenge isn’t about reducing expenses for the utilities, or invent a new Math calculation or even make politically correct statements or align out grammar for the PRC and Utilities. It is about not compromising our environmental conditions by wasting energy and producing greenhouse gases. My recommendation is to approach owners and improvise their consumption first and then make it profitable for the property owners who are willing to invest in this worthwhile endeavor with the utility companies and create an IRP for a city or town that gives a profit to the property owners while eliminating future expenses forthright utilities which will (as always) be passed on the the customers.

10. Kyle Anders says:

Great article Alison, thanks
Great article Alison, thanks for covering this issue. I’m in Ontario, and our national HBA is planning to roll out a Zero Energy labeling program. The pilot program currently does not distinguish between site and source energy, but rather treats all energy the same on a site basis: 1 kWh of electricity equals 1 kWh (equivalent) of natural gas. Applying energy conversion factors like what the DOE is prescribing I feel would be more sensible. Otherwise homes using natural gas for space heating (currently the cheapest heating source in most regions)end up needing to install a lot more PV, since the extra source energy that PV offsets goes unrewarded.

11. Kyle Anders says:

Great article Alison, thanks
Great article Alison, thanks for covering this issue. I’m in Ontario, and our national HBA is planning to roll out a Zero Energy labeling program. The pilot program currently does not distinguish between site and source energy, but rather treats all energy the same on a site basis: 1 kWh of electricity equals 1 kWh (equivalent) of natural gas. Applying energy conversion factors like what the DOE is prescribing I feel would be more sensible. Otherwise homes using natural gas for space heating (currently the cheapest heating source in most regions)end up needing to install a lot more PV, since the extra source energy that PV offsets goes unrewarded.