# Green Home Builder ZETA Readies Energy Management System to Achieve Net Zero

ZETA Communities, a San Francisco-based green prefab builder, has been quietly developing an energy management system that it says will be ready to be installed in all the startup’s projects starting next year. The system, called zTherm, automatically opens vents, draws heat from thermal mass, and takes other low-cost measures to cool or heat a house without cranking up the air conditioner or furnace. While ZETA, founded in 2007 and backed with $5 million in venture capital, has so far built just one structure and is in the process of completing another, CEO Naomi Porat tells us the firm has a pipeline of projects totaling more than 1,000 units that are scheduled to be built in 2010 and 2011. ZETA constructs buildings as modules in a factory and then assembles them in the field, cutting construction time in half and using about 50 percent less material in the process. The startup aims to construct multifamily housing and mixed-use commercial structures that are net-zero energy — meaning they produce as much or more energy than they consume — and that are priced competitively with conventionally made buildings. zTherm is an important part of the firm’s energy-saving and pricing goals. The technology, which has so far just been installed at a demonstration home in Oakland, Calif., is what Porat calls ZETA’s “central nervous system” because of its ability to make choices about economizing heating and cooling settings to reduce building energy use by 10-15 percent. ZETA says the proprietary system will cost about$200 to install (it won’t, at least initially, be sold as a separate product). zTherm automatically takes steps to achieve the desired indoor temperature, starting with the least costly approach, such as opening a skylight or fresh air vent (a sensor detects if it’s raining). If that doesn’t do the trick, said John Stockton, an engineering consultant to ZETA for zTherm, the system will take an intermediate step like turning on a fan to cool the building or, if the concrete basement has absorbed and retained a large amount of heat during the day, closing the vents and allowing the heat to rise and warm the interior. These “passive” measures will be used first before air conditioning or heating — the most energy-intensive and costly actions — are taken, according to Stockton.

ZETA has plans to add more features to zTherm that could be ready in about 18 months, said Shilpa Sankaran, VP of business operations, who described the system as an “ongoing innovation.” They may include controls of additional systems such as lighting; a front-end, web-enabled dashboard (the current version is controlled through a wall-mounted unit, but ZETA is open to partnering with existing energy dashboard developers); and smart grid interoperability, such as the ability to communicate with smart meters and appliances and reduce energy use during peak demand.

The zTherm energy system is part of a host of other technologies that ZETA employs to achieve its promise of net-zero energy, Porat said. Others include wastewater heat recovery, a heating, cooling and ventilation system that uses a high-efficiency heat pump and an air-to-air heat exchanger, and a super-tight building envelope with high-performance windows and insulation. Such features allow ZETA buildings to use 40-60 percent less energy overall than conventional, site-built structures, according to Porat. To achieve net-zero energy, ZETA adds solar panels — which would generate as much renewable energy or more than is needed by the building over the course of a year and then feed it to the electric grid (for example, ZETA’s currently building an environmental center and lab in San Francisco that will use a 3.6 kW PV system to achieve net zero). ZETA’s clients can choose to have a third party validate the net zero target, and the startup will monitor actual energy usage for all projects for an entire year and make any needed adjustments.

The goal of building net zero-energy buildings has been gaining momentum in recent years. The Department of Energy launched a zero-energy initiative last year aimed at developing “marketable” commercial buildings that produce as much energy as they consume by 2025, and in June the DOE set aside $100 million for research projects that will help “achieve net-zero energy buildings.” Last September, California adopted an energy efficiency plan that calls for all new residential construction in the state to be net-zero energy by 2020 and all new commercial construction to be net zero by 2030. And the White House issued an executive order this October requiring all federal buildings planned after 2020 to be designed to achieve net zero. The construction industry as a whole, however, has been hit hard by the economic slump, and as a young startup ZETA faces an uphill battle to win major deals. Financial services firm Canaccord Adams, in a recent green building newsletter, quoted Ken Simonsen, chief economist at the trade group Associated General Contractors of America, as forecasting that nonresidential construction spending this year will shrink by 3-7 percent and possibly remain flat or grow by as much as 5 percent in 2010. Meanwhile, total U.S. construction next year is expected to range anywhere from a 4 percent contraction to a 2 percent expansion, according to Simonsen . The good news for ZETA: the chief economist for the professional association American Institute of Architects says energy efficiency will remain a priority in home design due to rising energy costs, according to Canaccord. But even green prefab hasn’t been immune to the downturn in the market. Oakland, Calif.-based mkDesigns closed this May after having built 51 prefab buildings since 2004. Two of mkDesigns’ factory partners went out of business and several clients lost financing for projects, forcing founder Michelle Kaufmann to sell the assets of the company (she soon launched a new green prefab firm, this time targeting larger community developments). ZETA, like Kaufmann in her newest venture, believes that prefab can only be successful by achieving scale. Porat told us that the firm is mostly focused on large multifamily developments of between 30 and 300 units a piece. As part of the effort to scale, ZETA opened its own factory last month in Sacramento, a 91,000-square-foot facility that will be able to crank out 400-500 units per year. And the startup’s business plan, Porat said, calls for establishing similar factories elsewhere in the country, at around$2 million apiece, that would serve communities within a 200-300 mile radius.

Image courtesy ZETA Communities