California is moving towards a mandate for zero net energy for residential new construction by 2020. Zero net energy means the home cannot consume more net energy than it generates.


Yup. California homes are going to have to generate as much energy as they consume by 2020. The next question is, how?

Unless the “Mr. Fusion” power plants from the film Back to the Future become reality, home power generation is likely to come from solar. The obvious question is, how practical is this? If you throw enough money at the problem, limit houses to a single story to give collectors more room, build a house in a nice sunny locale, and ignore practical aspects of modern American life, like 1,200 to 1,600 Watt blow dryers, it’s possible to build a zero net energy home. Several demonstration projects have proven it.

But the question is not, is it possible? The question is, how practical is it?

An Oklahoma home builder did manage to construct a home claimed to be zero net energy for a “small” premium. It only cost 60% more, which is considered quite a bargain compared to some of the other demonstration projects.

The 60% premium means the return on the extra investment is around 2%. Live in the home 50 years and you can not only feel smug about your zero net energy home, you can finally break even.

Of course the median home price in Oklahoma City is $130,000 according to the National Association of Realtors™. In Los Angeles it’s $588,000. And the state wants to make it more expensive?

Look, this is all just feel good nonsense. If California were really concerned about moving the state towards zero net energy, the state would be building nuclear power plants rather than decommissioning them. The Auburn dam on the American River (which has been held up for more than three decades) would move ahead, providing power, recreation, and flood protection for more than a million people. Instead, the state wants to bully contractors and home buyers.

Absent some serious technological breakthroughs to drive the efficiency of solar collectors up and the price down, the deadline will either be reset or builders will come up with a work-around.

What type of work-around? How about leaving out air conditioning? California homes may be built ducted for air conditioning, like many homes in the Denver area are built. Air conditioning may disappear from residential new construction and become an aftermarket addition, like swimming pools.

If it’s good for air conditioning, why not other energy-using products? Many builders leave some rooms pre-wired for ceiling fans today. Why not leave all rooms pre-wired? Why not leave them largely pre-wired for lighting. Install a few compact fluorescents and leave the rest to the homeowner?

Homeowners provide washers, dryers, and refrigerators today. Couldn’t they provide disposals, microwaves, and dishwashers in the zero net energy home of tomorrow?

New mortgages could be created that allow homeowners to close on their zero net energy home today with a rider to use for purchasing appliances, lighting, and air conditioning the day after. HVAC contractors won’t mind. Your margins will rise if you can sell direct to homeowners rather than builders.

Solar advocates have been making wild predictions about the amount of energy we’re going to get from the sun for decades. The government has been throwing massive amounts of money at solar just as long. Yet, solar only accounts for 0.065% of U.S. energy, less than we get from landfill biomass. There’s a reason. It’s simply not economical, and all the wishing and government edicts won’t change that.

Zero net energy is unsound legislation based on unsound economics, and fantasy physics. But if it results in air conditioning moving from residential new construction to an aftermarket, then zero net energy can still mean bigger net profits for you.

Matt Michel is the CEO of the Service Roundtable, the world’s largest private contractor alliance. Learn more at For a free copy of his Success Strategies audio CD, contact Liz Patrick toll free at 877.262.3341, by fax at 817.796.2773, or by email at