Forum Institutional

Here's how we can build net-positive homes

Solar panels being installed on a residential home in San Diego, California. Net-positive homes – which produce more energy than they consume – can be a reality now thanks to technology like smart-energy management.

Net-positive homes – which produce more energy than they consume – can be a reality now thanks to technology like smart-energy management. Image: Reuters/Mike Blake

Olivier Blum
Executive Vice-President, Energy Management Business, Schneider Electric
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This article is part of: World Economic Forum Annual Meeting

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  • In 2050, homes could be the biggest consumer of electricity by sector.
  • Net-positive homes – which produce more energy than they consume – can be a reality now thanks to technology like smart-energy management.
  • For widespread adoption, governments must begin directing resources towards net positivity.

Homes have been our sanctuary, the places in which we live, love and thrive. But today’s hybrid world has transformed our homes into the multipurpose centre of everything. In many cases, our homes have become permanent spaces where we work and learn.

The more we use energy-intensive devices and appliances at home, the more our CO2 emissions and electricity costs rise. The carbon footprint of homes already represents around 20% of all global CO2 emissions, and the residential sector is meant to become the most prominent electricity consumer by 2050. And with the worsening energy crisis affecting consumers globally, utility bills are expected to soar further in the coming years.

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To reduce global warming, achieve a net-zero future, and soften the impact on consumers’ wallets, an effort to make our homes efficient and sustainable is more urgent than ever. The big question is: How can homes move from being a cause of climate change to becoming part of the solution?

The ticking climate clock

While a new year is usually a cause for celebration, the arrival of 2023 also means we’re hurtling closer to 2030 targets which aim to halve emissions and limit global warming to 1.5°C. Last year was the warmest on record for many parts of the world, while others also witnessed devastating floods and deadly cold snaps. Heatwaves that once struck every 500 years in the pre-industrial era are now occurring every three to four years.

To date, the focus of the energy transition has been on the decarbonization of energy supply, like the phase-out of coal and investment in renewables and carbon capture. But while decarbonizing the energy supply is essential, making up 45% of global abatement, it is actually the demand side that accounts for more than half, which I discussed in how energy demand can help tackle the climate crisis.

By transitioning to homes that consume and even produce clean electricity, we can reduce consumer costs in this crisis and beyond while also tackling 20% of the decarbonization progress required to meet principal climate goals.

Building a net-positive home

While achieving carbon neutrality is the general goal, we should actually be far more ambitious with our buildings. Imagine a world where housing wasn’t simply net zero but, in fact, net “positive”. A net-positive home would effectively generate less than zero emissions by producing enough clean power to satisfy its own energy needs and sell excess clean energy on to others.

The journey to net positivity begins by minimizing energy use, waste, and emissions. To date, discussion around energy efficiency has focused on insulation projects, such as double-glazing windows. These are important, but expensive with a slow payback time frame. But the energy crisis impacting many parts of the world could well be a catalyst for change. And the change that can make the greatest difference, at the fastest speed and lowest cost, is digitization to automate and manage energy demand. By adopting smart energy management tools, demand and bills can be reduced by as much as 75%.

Savings through technology

Smart home energy management solutions ensure homes are sustainably powered with intelligence to optimize their own energy needs without compromising on comfort. These systems orchestrate complex home energy environments by bringing together solar, battery backup, EV charging, home automation, connected switches and sockets, transforming homes into state-of-the-art sustainable buildings with unprecedented intelligence and net-positive opportunities. Homeowners can decide where to prioritize power during an outage, ensure EVs are appropriately charged when electricity is at its cheapest and greenest, and even store excess energy to be resold when its value is at its highest.

Ecolocost, a French real estate developer, is a great example. By partnering with Schneider Electric to equip its new development with solar panels connected to a smart home management solution, the company will not only make the energy use of the 26-unit homes cleaner, but also reduce its energy consumption by up to 50%, saving €30,000 annually over the next 30 years.

Home-brewed energy

Hosting solar on rooftops represents a major untapped opportunity: Bloomberg New Energy Finance projects over 167 million households will “go solar”, and at least 2,000 gigawatts of solar and 1,000 gigawatt-hours of energy storage will be installed by 2050. More than half of rooftops in Germany and the US could host solar, and this ratio goes up to two-thirds in the UK and up to 80% in Australia.

And as net-zero homes start generating their own energy through renewable sources, they can expect a net-positive energy gain. Not only will this autonomy enable consumers to circumvent soaring energy tariffs, but they’ll be able to sell excess energy generated back to the grid for a profit.

Connecting these sources back to the home’s energy management system will then enable residents to consume, produce, and sell energy when it’s at its cheapest, greenest, or even most profitable, depending on the homeowners’ priorities. It’s an ideal climate change solution, but we must overcome a handful of hurdles before it can be widely realized.

A shift in government policy

Despite significant carbon abatement and savings to annual energy spend, net-zero homes equipped with rooftop solar PV and smart home energy management solutions come at paybacks that are not fast enough to generate massive adoption (for both retrofits and new build), particularly for lower-income communities. Lengthy waits for installation, and complexities around planning permission, are still barriers for many homeowners.

Governments worldwide may need to reconsider their priorities to tackle both the climate crisis and energy security. Prevention is better than cure. Instead of spending vital funds subsidizing the cost of energy for their citizens, they could reinvest some of these resources into net-positive initiatives. For instance, the EU Energy Performance of Buildings Directive is paramount to stimulating residential building renovation. Key measures such as minimum energy performance standards class, deploying decentralized assets (solar PV requirements on all new residential buildings, EV charging stations) and rolling out monitoring and controls will spur investments and retrofits towards net-zero homes. The upcoming EU market design reform will also be crucial to facilitate the rise of prosumers (those who both consume and produce) and remove barriers to demand-side flexibility.

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How is the World Economic Forum facilitating the transition to clean energy?

The energy crisis presents us with an opportunity not only to move away from carbon-intensive energy for good, but also boost energy sovereignty and security through local, independent production. By investing in clean residential energy supplies and reducing external energy reliance, governments can minimize their taxpayers’ utility bills not just today, but long into the future. It’s time to go big and go home on net positivity. After all, our world depends on it.

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World Economic Forum

May 21, 2024

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