Do you question the appeal of Zero Energy Homes to mainstream homebuyers? Then you may be missing an opportunity. Tim O'Brien Homes, which builds in the Milwaukee and Madison, Wisconsin metro areas, is finding a strong demand for such homes if they're well designed and if buyers understand the financial and lifestyle benefits.
The company just started work on the state's first Zero Energy neighborhood, Red Fox Crossing in New Berlin. All homes in the 34-lot development will be certified under the Department of Energy’s Zero Energy Ready Home Program, a well as the ENERGY STAR, WaterSense and Indoor airPLUS programs.
Buyer interest has been encouraging. As of May 2018, before drywall work on the model home had even been completed, a full one-third of the homes had been pre-sold. That's seven months after sales opened, which is a faster sale pace than in the builder's other neighborhoods.
That success is supported by a four-legged stool that includes the right market, the right land, the right systems and the right message. Let's take a look at each.
Homes at Red Fox Crossing are priced in the mid-500's, which is move-up for the Milwaukee market. Each will have a 7-9 Kilowatt rooftop solar system that, on an annual basis, produces at least as much electricity as the home uses.
A relatively high price point makes sense for a first-time solar project, as homeowners in that niche are more willing to absorb the cost of the panels into the mortgage. But the high-end niche isn't the only market for rooftop solar. Craig North, Tim O'Brien Homes' Vice President of Product Innovation, is confident that the evolution of this neighborhood will help the company understand how to offer cost-effective solar to more price-sensitive buyers.
"We see real potential at the lower end of the market," he says. "We think rooftop solar would make sense to any value conscious buyer regardless of demographic or price point."
The homes at Red Fox Crossing don't look like "solar" homes, which is one secret to the builder's success.
Solar will work on any lot with a clear view to the Southern or Western sky, but the right land provides those views while also supporting the builder's design goals.
To ensure that outcome O'Brien partnered with Neumann Companies, a local land developer. "We found a great piece of land that accommodates a North-South road pattern," says company principal Matt Neumann. That means the homes will face East or West.
Wait a minute -- don't you need a South-facing front or back elevation for solar? Not necessarily, says Neumann. "Most people prefer not to have solar panels on the front of their home, and with this orientation the builder can put them on a south-facing side elevation."
All of the community's homes will have grid-connected solar panels installed by SunVest Solar, a Neumann company and a sister company to Tim O'Brien Homes.
When it comes to systems, however, solar is the easiest one for the builder. The real challenge is engineering a home in which savings from the electricity generated by the panels more than covers the extra cost they add to the mortgage payment.
To meet that challenge the builder needs to get a lot of details right.
Take the mechanical system. Each home at Red Fox Crossing will feature higher efficiency two-stage furnaces that, according to North, will offer immediate savings for the customer. The mechanical system will also keep the homeowners comfortable year-round while providing clean, fresh air and maintaining optimal humidity levels.
The home's thermal envelope will include energy-saving features that minimize the load on the mechanical system. And it will be designed and detailed for long-term durability.
This type of high performance building is really the next step in homebuilding's evolution. It includes the elements of "green building" but also goes beyond them. Indeed, raising the bar of home performance is an important part of Tim O'Brien Homes’ culture. "We're constantly evaluating how various elements of our homes work together as a system," says North.
That constant evaluation is crucial for any builder wanting to go down this path -- getting to Zero Energy means addressing a lot of small details. Over the past five years for instance, improvements at Tim O'Brien Homes have included increasing exterior insulation levels on foundations and framing, making heat recovery ventilation a standard feature, and using spray foam to seal attics before installing the insulation.
North says that much of the company's knowledge about high-performance building came from its involvement in the Energy and Environmental Building Alliance (EEBA), where North serves as a board member. He credits EEBA with introducing the company to the Zero Net Energy concept: he learned about the Department of Energy's Zero Energy Ready Homes program at one of EEBA's annul summits and decided to adopt that program's specs.
EEBA also helps the company meet its continuous improvement goals by providing the opportunity to network with other high-performance builders. It's a community of pros -- builders, manufacturers, architects, engineers, and others -- who are committed to helping one another build better homes and grow their businesses.
"The ability to learn lessons from top industry professionals has been instrumental in helping us differentiate ourselves from the competition," says North. "And the connections made through networking have allowed us to pilot some cutting-edge products and technologies."
As part of its continuous improvement system, Tim O'Brien Homes has every one of its projects rated according to the Home Energy Rating System (HERS) Index from the
Residential Energy Service Network (RESNET). Feedback from those ratings help show the company ways to build higher quality, more durable, greener, energy efficient homes while providing strong value to the customer.
The HERS system also has marketing advantages. That's because it helps buyers understand the True Cost of Homeownership and directs them to builders who can lower those costs. The HERS Index website lists builders who commit to having their homes rated for energy performance and, according to RESNET, some Multiple Listing Services (MLS) are beginning to list HERS Index scores.
There's even data to support the payoff from a good HERS score. A 2016 study by the North Carolina Building Performance Association of more than 34,000 high-performance homes found a strong correlation between a lower HERS Index rating and a higher sale price.
In fact, a lower True Cost of Homeownership is an important part of Tim O'Brien Homes' marketing message. It seeks to help buyers understand that though a high-performance home costs a bit more to build than a code-built home, it doesn't cost any more to live in. The message is that people can get more home, more comfort and more peace of mind without spending any more money.
This understanding is especially important when it comes to solar. North points out that helping homeowners understand how Solar fits into the True Cost of Ownership model is a key making it more mainstream. The company has worked hard to address that.
Tim O'Brien Homes has found that people will embrace high-performance construction once they understand Total Cost of Ownership, and the company's marketing materials reflect that.