As you may know, Phius building certification has a ZERO tier. Phius ZERO pushes beyond the requirements of our Phius CORE standard in an effort to create fully net-zero buildings. I’m writing today to ask the solar energy industry for a bit more help in the effort to create more zero-energy buildings. 

When we speak of zero-energy buildings, we don’t mean buildings that use absolutely zero energy — using energy in dwellings is almost a defining feature of the human genus. (Wrangham, 2010). Rather, the idea is that the building exports as much “clean” renewable electricity as it imports dirty nonrenewable energy, over some period of time. It can also refer to a building that imports only clean energy and is therefore zero-emission in operation. 

Tall buildings in particular have a problem that they don’t have enough area for rooftop solar to generate as much energy as they use when they are taller than about 4-5 stories. But the idea of zero as a target was so appealing that it sparked a quest for a definition of net-zero energy that could apply to all kinds of buildings — including tall ones.

Definitions and protocol for zero-energy buildings in this “net” sense have been carefully thought about and codified in places such as the Zero Code (Architecture 2030, 2020), and ASHRAE Standard 228. (ASHRAE, 2023). The renewable energy procurement framework of the Zero Code was added to the 2021 International Energy Conservation Code (IECC) as Appendix CC:  Zero Energy Commercial Building Provisions. (The scope of IECC commercial code includes mid- and high-rise multifamily residential buildings).

The issue I’d like to highlight is that the solar business usually involves harvesting the “renewableness” of solar electricity and selling it to utility companies in the form of renewable energy certificates (RECs). Some of the proceeds kick back to the building owner hosting the on-site array, or the subscribers to the off-site community solar project, lowering their energy bills,  so it’s a win-win. Except for this: the building cannot also then claim to be renewably powered, net zero or zero emission. The zero standards for buildings pointedly require that RECs be assigned to the building:  

  • IECC 2021 clause CC103.3.2 (3) requires that “RECs and other environmental attributes associated with the procured off-site renewable energy shall be assigned to the building project for the duration of the contract [not less than 15 years].”
  • In ASHRAE 228 clause 8.3 we read “...Projects shall be credited for off-site renewable energy resources, provided the renewable energy certificates are retired. …RECs shall be conveyed to and retired on behalf of the entity who has financial or operational control over the site’s energy consumption…”

In Appendix B of Standard 228, on characteristics of off-site renewable energy procurement, ASHRAE goes on to recommend:

  • “The energy and environmental attributes need to be purchased together via the same legal mechanism. In other words, they need to be bundled. Unbundled attributes (for example, renewable energy credits in the United States) are not an effective market mechanism within the purpose of this standard. (There is less case to be made for additionality, and there is not strong enough demand for them to have an impact on the same order as bundled instruments). None of the attributes, environmental or otherwise, of the energy may be sold, transferred, or claimed by any other site.”

The model contracts from the Solar Energy Industry Association (SEIA) don’t comply with the consensus net-zero standards, instead claiming the RECs for the solar provider.

  • In the SEIA / SAPC Residential power purchase agreement, clause 9 states, “You understand and agree that any and all tax credits, incentives, renewable energy credits, green tags, carbon offset credits, utility rebates or any other non-power attributes of the system are the property of and for the benefit of [provider], usable at its sole discretion. [provider] shall have the exclusive right to enjoy and use all such benefits, whether such benefits exist now or in the future…”
  • In the SEIA commercial & industrial (C&I) power purchase agreement v2.0, clause 4 states “...As the owner of the System, Seller is entitled to the benefit of, and will retain all ownership interests in the RECs and Incentives. Purchaser shall cooperate with Seller in obtaining, securing and transferring any and all RECs and Incentives. … Purchaser shall not make any filing or statements inconsistent with Seller’s ownership interests in the RECs and Incentives. If any RECs or Incentives are paid or delivered directly to Purchaser, Purchaser shall immediately pay or deliver such items or amounts to Seller.”

A few power purchase agreement contracts have come across my desk related to Phius project certification, and they all say the only way Phius projects have done ZERO using off-site renewables is with the unbundled RECs of which ASHRAE takes a dim view. 

But that last sentence of the C&I PPA suggests a resolution: repricing. The solar industry could offer a different product at a different (higher) price, that assigns the RECs to the building. One type we’re aware of is Green-e Certified Renewable Electricity products; section III clause D, E of their standard precludes double-counting of the "renewableness." 

Admittedly, forgoing the revenue from selling off RECs would reduce the bill credit for the owner/occupants, and there should be some value from the electric power itself. But as evidence that there’s a market for such, Portland General Electric offers a “retail” renewable power option at an outright cost premium. I subscribed to this myself during the decade-plus that I lived there. 

In my view and in summary, the problem that large/tall buildings can't get to net zero with on-site renewables alone is a real/technical problem. The problem that the business model of solar providers involves selling the RECs is “just” a pricing problem. “All” they need to do is offer a different product at a different price that assigns the RECs to the buyer's building. That is, building owners who want net-zero buildings are just as valid customers for the RECs as the utilities they are in the habit of selling them to now. We could use more renewable power offerings that clearly comply with the consensus standards for net-zero buildings. Thank you for your attention to this matter. 

Postscript

The 2021 IECC also has an Appendix RC for Zero Energy Residential Buildings (again that’s low-rise). It is substantially different from Appendix CC for commercial and does NOT appear to insist that RECs are assigned to the building, does not preclude double-counting. ASHRAE 228 makes no such distinction and applies to all kinds of buildings. 


References

ASHRAE. 2023. ANSI/ASHRAE Standard 228 - Standard Method of Evaluating Zero Net Energy and Zero Net Carbon Building Performance.

Architecture 2030. 2020., Zero Code 2.0 Off-Site Procurement of Renewable Energy, Technical Support Document. 

https://www.zero-code.org/wp-content/uploads/2018/04/Zero-Code-TSD-OffSiteRenewables.pdf

Table 2 repeatedly says “​​RECs and/or other environmental attributes must be allocated to the ZERO Code complying building(s)” 

https://www.green-e.org/what-we-do/certification-programs/green-e-energy

https://codes.iccsafe.org/content/IECC2021V3.0/appendix-cc-zero-energy-commercial-building-provisions

https://portlandgeneral.com/energy-choices/renewable-power

https://seia.org/research-resources/model-leases-and-ppas/

Wrangham, R. (2010). Catching fire: How cooking made us human. Basic Books.


RC102.2 Requires that the Energy Rating Index including onsite power production OPP plus CREF plus REPC is zero (or less), where 

“CREF = Community Renewable Energy Facility power production the yearly energy, in kilowatt hour equivalent (kWheq), contracted from a community renewable energy facility that is qualified under applicable state and local utility statutes and rules, and that allocates bill credits to the rated home.

REPC = Renewable Energy Purchase Contract power production-the yearly energy, in kilowatt hour equivalent (kWheq), contracted from an energy facility that generates energy with photovoltaic, solar thermal, geothermal energy or wind systems, and that is demonstrated by an energy purchase contract or lease with a duration of not less than 15 years.”

https://co.my.xcelenergy.com/s/renewable/renewable-energy-claims