U.S. homes and commercial buildings consume roughly two-fifths of the country’s overall energy and three-fourths of all electricity, and account for most of the peak electricity demand that drives generation and power grid infrastructure costs. Each of these statistics points to different solutions for reducing buildings’ carbon footprint. 

Shifting heating from fossil fuels to electricity can cut direct emissions. More efficient building design, materials and appliances can cut electricity consumption. And managing electricity use to match grid needs can help utilities control the costliest part of decarbonizing their systems — reducing reliance on dispatchable fossil-fueled power. 

The Department of Energy’s $65 million funding for “connected communities” projects that was announced last week is focused on all three parts of this equation. It builds on scores of projects across the country combining high efficiency, electrification and distributed energy resources such as rooftop or community solar, battery and thermal energy storage, and electric vehicle charging.  

Energy Secretary Dan Brouillette highlighted the need for “active” buildings that match their energy usage to grid needs as he unveiled the funding at a Charlotte, North Carolina event hosted by the Electric Power Research Institute and utility Duke Energy. “As the sophistication of our homes and workplaces advances, there’s an opportunity to play an even bigger role.” 

Brouillette toured a high-efficiency, all-electric home built by Meritage Homes featuring high-efficiency insulation, thermal and battery storage, solar-powered heat pumps, and appliances that can shift energy use based on homeowner or utility commands. Meritage is one of several national homebuilders showcasing these technology combinations. 

These are still a tiny fraction of the more than 1 million homes built in the country every year. But by collecting data on how they can align the incentives of homebuilders, homebuyers and utilities, projects like these are important steps toward expanding these techniques across the country, said Ram Narayanamurthy, technical lead for EPRI’s Advanced Energy Communities program, which has conducted dozens of these projects since 2014. 

“Previously, we looked at these individual silos — energy efficiency in a silo, demand response in a silo, customer solar in a silo — and they were researched and understood in silos,” Narayanamurthy said. Advanced Energy Communities studies their “impact [on] the electricity system as an integrated whole, not as separate pieces.” 

That, in turn, should help design complete packages that cut costs, meet homeowners’ expectations for comfort and convenience, and provide the load-shifting and grid responsiveness that utilities need. DOE’s new funding will seek out new use cases like mixed-used developments and healthcare campuses, and collect and share data for broader use. 

Balancing the grid impacts, costs of electrification and net-zero homes

Most of EPRI’s earliest projects are in California, a state whose aggressive carbon-reduction goals are matched with mandates for all new homes to have solar power and achieve “net-zero energy,” or using no more energy from the grid than they generate themselves on an annual basis. 

One of EPRI’s first projects in Fontana, California tested these propositions with solar rooftops, electric heat pumps and water heaters, and batteries to shift consumption away from peak demand hours. “We wanted to see what the future would look like for the grid if every home went to net zero,” Narayanamurthy said. 

One key finding was that “if you electrify everything, you might have to upgrade wiring [and] transformer sizing” and perform other costly grid upgrades, he said. But “very deep energy efficiency” — insulation and air sealing to capture cold and heat and reduce air conditioning loads — “drives a lot of mitigation of the peak loads that drive grid planning.” 

Likewise, hitting net-zero energy doesn’t necessarily align building consumption patterns with peak grid demands. But running air conditioners and appliances in the middle of the day, and then cutting back during later peaks, can mitigate the “duck curve” demand-supply imbalances that are causing grid management challenges in California and other solar-heavy regions, he said.

Another project in Clovis, Calif. is testing these methods to shift solar power without batteries, further reducing the costs of hitting net-zero. That can bring net-zero home costs to close to those of standard homes, with the extra solar costs balanced out by long-term energy savings. 

That’s good news for electrification proponents in states like California, where natural-gas bans are being proposed at the state and local level. A new report from the Rocky Mountain Institute finds that all-electric homes cost less to build and power and emit less carbon than mixed-fuel homes. That’s true in Boston, New York City, Seattle and Austin, Texas, where building codes are encouraging all-electric buildings, as well as in areas without such codes, including Minneapolis and Columbus, Ohio. 

Community sharing of solar and batteries 

EPRI is also examining the costs and benefits of siting solar, batteries and backup generation at individual homes, or centralizing them in community microgrids, through two projects with utility partner Southern Company, one in Georgia and one in Alabama. 

The first, Pulte Homes’ 46-unit Altus at The Quarter development in Atlanta, includes voice-activated smart home controls with rooftop solar and in-home batteries. Homebuilders are increasingly adding solar and batteries to new developments, and falling costs are expanding the approach from luxury developments to more middle-income and multifamily applications.  

The second, Signature Homes’ 62-home Reynolds Landing development in Hoover, Alabama, combines high-efficiency and smart appliances with a 1-megawatt microgrid powered by solar, batteries and natural-gas generators. 

According to DOE’s Oak Ridge National Laboratory, Reynolds Landing uses 44 percent less energy than comparable all-electric communities by coordinating microgrid operations via the Volttron software platform. It also requires 34 percent less power during winter peak hours — a critical consideration in the Southeast, where long stretches of winter heating demand will be difficult to meet with intermittent solar and wind power. 

Whether or not solar, storage and generation are best sited at individual homes or in a centralized microgrid depends on many factors. Part of it is “a customer perception thing,” Narayanamurthy said. “People like to see solar on their roof. But builders struggle with how to add the cost of solar because it makes them less cost-competitive.”

But utility microgrids require structures to share costs and benefits with homeowners that may move in and out of a community. Similar challenges surround community solar, which can be more cost-effective than rooftop solar, but which requires shared investment from a changing roster of offtakers. 

At the same time, utilities achieve benefits by centralizing solar and batteries, since “they can manage power quality [and] sequencing of operations,” he said. Methods to tap individual homes’ distributed energy resources to accomplish the same goals can be complicated, although utilities including Vermont’s Green Mountain Power are showing it can be done with the right regulatory constructs.

Duke Energy, which has set a goal of net-zero carbon emissions by 2050, will need an array of cost-effective technologies to supply power when renewables don’t align with demand, Doug Esamann, the utility’s executive vice president of energy solutions, said at last week’s event in North Carolina. “It’s got to be a combination of multiple technologies: not only how we generate energy, but how we distribute it and how it’s used.”