Net-Zero Energy Buildings: 

A Classification System Based 

on Renewable Energy Supply 

Options 

Shanti Pless and Paul Torcellini 

Technical Report 

NREL/TP-550-44586 

June 2010 
 

Net Technical Report -Zero Energy Buildings: NREL/TP-550-44586 A Classification System Based June 2010 

on Renewable Energy Supply 

Options 

Shanti Pless and Paul Torcellini 

Prepared under Task Nos. BEC7.1210, BEC7.1123 

National Renewable Energy Laboratory

1617 Cole Boulevard, Golden, Colorado 80401-3393 

303-275-3000 • www.nrel.gov 

NREL is a national laboratory of the U.S. Department of Energy 

Office of Energy Efficiency and Renewable Energy 

Operated by the Alliance for Sustainable Energy, LLC 

Contract No. DE-AC36-08-GO28308 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Executive Summary 

A net-zero energy building (NZEB) is a residential or commercial building with greatly reduced 

energy needs. In such a building, efficiency gains have been made such that the balance of 

energy needs can be supplied with renewable energy technologies. Past work has developed a 

common NZEB definition system, consisting of four well-documented definitions, to improve 

the understanding of what net-zero energy means. For this paper, we created a classification 

system for NZEBs based on the renewable sources a building uses. A building that offsets all its 

energy use from renewable resources that are available within the footprint is at the top of the 

NZEB classification system at an NZEB:A. A building that achieves an NZEB definition 

through a combination of on-site renenewables and off-site purchases of renewable energy 

credits is placed at the lowest end of the NZEB classification at an NZEB:D. We also look at 

how this classification relates to the previously developed NZEB definitions. The goal of this 

type of classification is to encourage NZEB owners and NZEB designers to first use all possible 

cost-effective energy efficiency strategies, and then use renewable sources and technologies that 

are located on the building and at the site. We have provided for lower classes of NZEB to 

include buildings whose energy use exceeds the renewable energy available at the site. This 

NZEB classification system is applicable to both single building projects as well as a set of 

buildings in a community or campus. 

iii 
Acronyms and Abbreviations 

NZEB net-zero energy building 

NZEB:A A footprint renewables NZEB 

NZEB:B A site renewables NZEB 

NZEB:C An imported renewables NZEB 

NZEB:D An off-site purchased renewables NZEB 

PV photovoltaic 

RE renewable energy 

REC renewable energy credit 

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Contents 

Executive Summary.......................................................................................................................iii
 

Acronyms and Abbreviations ........................................................................................................ iv
 

Introduction..................................................................................................................................... 1
 

Background..................................................................................................................................... 1
 

Net-Zero Energy Building Concepts and Assumptions.................................................................. 2
 

Grid Connection..................................................................................................................... 2
 

Fuel Switching ....................................................................................................................... 2
 

Renewable Energy Credits..................................................................................................... 2
 

Energy Supply Options and Priorities............................................................................................. 3
 

Discussion of Supply Options................................................................................................ 4
 

Option 0 – Low-Energy Buildings..................................................................................... 4
 

Option 1 – Renewable Energy Generated Within the Building Footprint......................... 5
 

Option 2 – Renewable Energy Generated Within the Boundary of the Building Site ...... 5
 

Option 3 – Off-Site Renewable Energy Used To Generate Energy On Site ..................... 5
 

Option 4 – Purchase Renewable Energy Generated Off Site ............................................ 7
 

Net-Zero Energy Buildings: Definitions........................................................................................ 7
 

Near Zero-Energy Buildings........................................................................................... 8
 

Applying a Classification System to Net-Zero Energy Buildings.................................................. 8
 

Buildings Classified as NZEB:A....................................................................................... 9
 

Buildings Classified as NZEB:B....................................................................................... 9
 

Buildings Classified as NZEB:C....................................................................................... 9
 

Buildings Classified as NZEB:D....................................................................................... 9
 

Off-Grid Net-Zero Energy Buildings .............................................................................. 11
 

Zero Energy Beyond a Single Building .......................................................................... 11
 

Conclusions................................................................................................................................... 11
 

References..................................................................................................................................... 14
 

Tables 

Table 1. NZEB RE Supply Option Hierarchy ............................................................................... 4
 

Table 2. Applying NZEB Definitions.......................................................................................... 10
 

Figure 

Figure 1. NZEB Classification Flow Chart.................................................................................. 13
 

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Introduction 

Buildings have a significant impact on energy use and the environment. Commercial and 

residential buildings use almost 40% of the primary energy and approximately 70% of the 

electricity in the United States (EIA 2005). The energy used by the building sector continues to 

increase, primarily because new buildings are constructed faster than old ones are retired. 

Electricity consumption in the commercial building sector doubled between 1980 and 2000, and 

is expected to increase another 50% by 2025 (EIA 2005). Energy consumption in the 

commercial building sector will continue to increase until buildings can be designed to use 

energy efficiently and produce enough energy to offset the growing energy demand of these 

buildings. Toward this end, the U.S. Department of Energy has established an aggressive goal to 

create the technology and knowledge base for cost-effective net-zero energy commercial 

buildings (NZEBs) by 2025. 

Background 

In concept, an NZEB is a building with greatly reduced operational energy needs. In such a 

building, efficiency gains have been made such that the balance of the energy needs can be offset 

by renewable technologies. Torcellini et al. (2006) developed an NZEB definition system to 

improve the understanding of what zero energy means. They developed four documented 

definitions—net-zero site energy, net-zero source energy, net-zero energy costs, and net-zero 

energy emissions. Each NZEB definition, corresponding to a different energy use accounting 

method, has merits as a zero energy design goal; however, there is no single best accounting 

method. The NZEB definition used should align with the owner’s goals for the project. This 

paper adds another dimension to the NZEB definitions based on a hierarchy of possible 

renewable energy (RE) supply options for NZEBs. 

We propose a classification grading system for NZEBs based on the RE sources a building uses. 

NZEB classifications from NZEB:A to NZEB:D are proposed based on the RE type and location 

with respect to a building. This classification system recognizes that there are many possible RE 

supply options, depending on the site constraints and locally available renewable options. We 

also look at how this classification applies to the previously developed NZEB accounting 

methods. This technical report further documents and details this classification system that was 

originally summarized by Crawley et al. (2009). 

Using NZEB design goals takes us out of designing low-energy buildings with a percent energy 

savings goal and into the realm of a more sustainable energy end point. The goals that are set 

and how those goals are defined are critical to the design process. The definitions will influence 

designers who strive to meet the goals (Deru and Torcellini 2004). Because design goals are so 

important to achieving high-performance buildings, the way an NZEB goal is defined is crucial 

to understanding the combination of applicable efficiency measures and RE supply options. This 

NZEB accounting and classification system is applicable to owners developing design goals, to 

architects and engineers tracking the modeled performance of the design, and to operators 

measuring the energy use. The NZEB status should be measured, reviewed, and tracked each 

year. 

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Net-Zero Energy Building Concepts and Assumptions 

Grid Connection 

Before discussing the RE supply options available to NZEBs, we must look at the issue of grid 

connection. Conceptually, an NZEB produces as much as or more energy than it uses annually 

and exports excess RE generation to the utility (electricity grid, district hot water system, or 

other central energy distribution system) to offset the energy used. For NZEBs, a utility 

connection is allowed for energy balances. A grid-connected NZEB uses traditional energy 

sources such as electricity and natural gas utilities when on-site generation from RE does not 

meet the loads. When the on-site generation exceeds the building’s loads, excess energy is 

exported to the utility. By using the utility to account for the energy balance, excess production 

can offset later energy use. 

We assume that excess on-site generation can always be sent to the grid to be fully used. 

However, in high market penetration scenarios, the grid may not always need this energy. In this 

scenario (and depending on the electricity utility), on-site energy storage would become 

necessary to maintain the zero energy status of the building. 

Off-grid NZEBs are also possible under this classification system; however, they typically 

require additional on-site generation capabilities combined with significant energy storage 

technologies. Backup energy sources for off-grid NZEBs would also have to be supplied with 

RE fuels under this classification system. 

Fuel Switching 

The NZEB definitions and classifications enable renewable electricity generation to offset 

various fossil fuel energy uses. For example, natural gas energy use can be offset with excess 

photovoltaic (PV) or wind energy exported to the grid; the offset level is determined by the 

energy use accounting method. A site energy accounting allows for a 1-to-1 offset between 

fuels; source energy can place an additional offset (approximately 3-to-1) for renewable 

electricity exported to the grid. These source-to-site ratios are well documented and vary 

depending on the utility mix (Deru et al. 2007). 

Renewable Energy Credits 

Many RE projects are partially financed through the sales of renewable energy credits (RECs). 

Although this is an important financial tool, once the RECs are sold and then purchased by 

someone else, the project cannot claim the benefits of the RE produced on site for the purposes 

of our NZEB classification. In some utility purchase models, the RECs are not resold; rather, 

they are retired and used by the utility to meet a renewable portfolio standard obligation. In 

these examples—where a project does not own or retain its RECS—the project’s RE is not 

available as an RE option in the NZEB context. This is to avoid double counting the RECs. If 

the project buys back an equivalent amount of certified RECs, such as Xcel’s Windsource (Xcel 

2010) or Green-E certified renewables (Green-E 2009), the project’s on-site RE is available for 

credit toward an NZEB position for as long as the project purchases equivalent RECs. 

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Energy Supply Options and Priorities 

Various supply-side RE generation technologies are available for NZEBs (Torcellini et al. 2006). 

Typical examples of these technologies include PV, solar hot water connected to a district hot 

water system, wind, hydroelectricity, and biofuels. Demand-side RE and efficiency measures 

include strategies that save energy but typically are not commoditized. These cannot be included 

in the supply-side balance for achieving an NZEB. Typical examples of demand-side RE and 

energy efficiency strategies include passive solar heating, daylighting, solar ventilation air 

preheaters, and domestic solar water heaters. 

Guiding principles for RE in NZEBs were developed to minimize the energy transfers from 

generation source to end use and provide long-term maintainability in the built environment: 

•	 Minimize the overall environmental impact by encouraging energy-efficient building 

designs, using emissions-free RE, and reducing transportation, transmission, and 

conversion losses. 

•	 Will be available over the lifetime of the building. 

•	 Are highly scalable, widely available, and have high replication potential for future 

NZEBs. 

We developed a hierarchy of RE sources in the NZEB context to reflect these principles. Table 1 

shows this ranking in order of preferred application. 

This hierarchy is weighted toward RE technologies that are available within the building 

footprint and at the site. Rooftop PV and solar water heating are the most applicable supply-side 

technologies for widespread application of NZEBs. Other supply-side technologies such as 

parking lot-based wind or PV systems may be available for limited applications. A good NZEB 

should first encourage energy efficiency, and then use RE sources that are available within the 

building footprint—the definitions and classification system support this. However, some high 

energy use building types such as hospitals and grocery stores cannot realistically apply 

efficiency measures to the point where they can offset all energy use with a combination of onbuilding and on-site renewables. Therefore, this NZEB classification system includes off-site 

supply options so all possible building types can potentially reach an NZEB position. 

This hierarchy was initially discussed by Torcellini et al. (2006). We have since expanded to a 

formal classification system, added detail to the RE source hierarchy, and modified it to 

accommodate specific site details and energy uses. After examining several NZEBs and how 

people use the definitions, we added a discussion to address RE use for campus and 

neighborhood environments. Table 1 provides a brief overview of each energy supply option 

and is followed by a discussion of each. 

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Table 1. NZEB RE Supply Option Hierarchy 

Option 

Number NZEB Supply-Side Options Examples 

0 

Reduce site energy use through energy 

efficiency and demand-side renewable 

building technologies. 

Daylighting; insulation; passive solar 

heating; high-efficiency heating, 

ventilation, and air-conditioning 

equipment; natural ventilation, evaporative 

cooling; ground-source heat pumps; 

ocean water cooling 

On-Site Supply Options 

1 

Use RE sources available within the 

building footprint and connected to its 

electricity or hot/chilled water distribution 

system. 

PV, solar hot water, and wind located on 

the building 

2 

Use RE sources available at the building 

site and connected to its electricity or 

hot/chilled water distribution system. 

PV, solar hot water, low-impact hydro, and 

wind located on parking lots or adjacent 

open space, but not physically mounted on 

the building 

Off-Site Supply Options 

3 

Use RE sources available off site to 

generate energy on site and connected to 

the building’s electricity or hot/chilled water 

distribution system. 

Biomass, wood pellets, ethanol, or 

biodiesel that can be imported from off 

site, or collected from waste streams from 

on-site processes that can be used on site 

to generate electricity and heat 

4 

Purchase recently added off-site RE 

sources, as certified from Green-E (2009) 

or other equivalent REC programs. 

Continue to purchase the generation from 

this new resource to maintain NZEB 

status. 

Utility-based wind, PV, emissions credits, or 

other “green” purchasing options. All off-site 

purchases must be certified as recently 

added RE. A building could also negotiate 

with its power provider to install dedicated 

wind turbines or PV panels at a site with 

good solar or wind resources off site. In this 

approach, the building might own the 

hardware and receive credits for the power. 

The power company or a contractor would 

maintain the hardware. 

Discussion of Supply Options 

This section presents a brief discussion about the various energy supply options listed in Table 1. 

These options form the basis for the NZEB classification discussed later in this paper. 

Option 0 – Low-Energy Buildings 

Option 0 states that a building must reduce site energy use through demand-side RE and energy 

efficiency technologies. Option 0 is considered a prerequisite and is an essential and 

fundamental quality of NZEBs. A well-optimized NZEB design should include energy 

efficiency strategies to the point that the available RE strategies become more cost effective. 

Efficiency measures or energy conversion devices such as daylighting or natural gas-fired 

combined heat and power devices are not considered to be on-site, supply-side RE production in 

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the NZEB context. Any RE source such as passive solar space heating, solar thermal air heaters, 

ground-source heat pumps, and natural ventilation that cannot be commoditized, exported, and 

sold, are considered to be demand-side technologies and efficiency measures. Combined heat 

and power systems that use fossil fuels to generate heat and electricity are considered to be 

demand-side technologies. 

Option 1 – Renewable Energy Generated Within the Building Footprint 

This option covers all energy generated and used (or exported) from RE sources collected within 

the building footprint. Option 1 renewables apply only to a single building and to the RE 

connected directly into its energy distribution infrastructure. RE that is generated and used 

within the building footprint is directly connected to the building’s electricity or hot water 

system, which minimizes transmission and distribution losses. This includes RE technologies 

mounted on the building roof or façade. Typical Option 1 technologies include PV and solar 

thermal systems. Building-mounted wind turbines may also have some limited application. 

Building-mounted RE technologies are preferable because the collection area can be guaranteed 

to be available over the life of the building. Other permanent structures could include 

nonbuildable land and parking, and are considered in Option 2. Systems mounted within the 

boundary of the site, but not on the permanent building structure, could have a greater chance of 

being shaded, blocked, or removed because of future development needs for adjacent land. 

Typically, the only area available for on-site energy production that a building has guaranteed as 

“its own” over its lifetime is within its footprint. To ensure this area is available for on-site 

production, many states, counties, and cities have solar access ordinances that declare the right to 

use the natural resource of solar energy as a property right. For example, the City of Boulder, 

Colorado, has a solar access ordinance that guarantees access to sunlight for homeowners and 

renters. This ordinance protects the solar access of existing buildings by limiting the amount of 

shadow that new development may cast on neighboring buildings, and maintains the potential for 

using RE systems in buildings (City of Boulder 2006). Using a PV system within the boundary 

of the building site to generate electricity is less favorable than a roof-mounted PV system 

because the area outside the building’s footprint could be shaded or developed in the future. 

Thus, it cannot be guaranteed to provide long-term generation. 

Fuel cells and microturbines that use natural gas do not generate RE and exported energy would 

not count toward any of these options; rather, they typically transform purchased fossil fuels into 

heat and electricity. This can be a valuable source-energy efficiency strategy. Energy that 

cannot be used by the building at the time of generation and must be exported is not counted for 

the purposes of defining an NZEB. 

Option 2 – Renewable Energy Generated Within the Boundary of the Building Site 

This option addresses RE generated on the building site but not within its footprint or mounted 

on the building. On-site RE is ideally connected directly to the building’s electricity, hot/chilled 

water, or other building energy systems; however, on-site RE does not necessarily have to be 

directly connected if the RE equipment can be shown to be located on the building’s site using a 

commonly accepted site definition. One example of such a building site definition (based on 40 

CFR 260.10) is: 

The on-site RE must be located on the property, or on property geographically 

contiguous to the property, on which the building is located, except that the two 

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properties may be separated by an easement, public thoroughfare, transportation, 

or utility-owned right-of-way. Non-contiguous properties owned by the same 

organization but connected by a right-of-way which is controlled and to which 

the public does not have access, is also considered on-site property. 

The site is typically defined as the property boundary; however, sites should represent a 

meaningful boundary that is functionally part of the building. When using this option, the site 

must be defined and justified. 

Typical strategies include parking lot PV systems mounted to shading structures, tower-based 

wind turbines mounted in a neighboring field, and ground-mounted solar hot water systems 

connected into the building’s hot water distribution system. An on-site solar-thermal absorption 

chiller would also be considered under this option. When available, biomass harvested from the 

site and used in the building (or exported) is also considered a site RE resource, as long as the 

resource is renewable over the life of the building. 

Option 3 – Off-Site Renewable Energy Used To Generate Energy On Site 

RE resources from outside the building site boundary (Options 3 and 4 in Table 1) could 

arguably also be used to achieve an NZEB. Often, high energy use buildings such as hospitals, 

laboratories, and grocery stores do not have sufficient RE generation capacity available within 

the building footprints or within the site boundaries. Our NZEB classification recognizes this, 

and was developed so all buildings could potentially reach NZEB. NZEBs that require 

significant off-site RE can achieve net-zero energy consumption under this classification system. 

However, it is not the same as a building that generates all needed energy on site and is classified 

as such. 

Renewable sources such as wood pellets, ethanol, and biodiesel that are imported to the site can 

be valuable, but are less valuable than on-site renewable sources in the NZEB context. Option 3 

is less preferable than Option 1 or 2 because of the energy used and the carbon footprint 

associated with producing and transporting the renewable resource to the building site. A 

building could qualify as an NZEB by using RE sources that are available off site, importing 

them on site, and then using them to generate energy on site. An example of this would be wood 

chips imported to heat a building. Other off-site renewables covered under this option include 

waste vegetable oil, biodiesel, and ethanol. Methane from human and animal waste treatment 

processes, recovery of waste energy streams from industrial processes, or landfill gas collection 

are all possible off-site RE generation options covered under Option 3, if they are available over 

the life of the building. 

Biofuels from these sources can provide valuable RE with less environmental impact than fossil 

fuels, but are not typically considered emissions free. Understanding and documenting the life 

cycle emissions and carbon impacts of biofuels are important steps in including these types of 

renewables in NZEB project. The land needed for Option 3 renewables is also typically much 

greater than for Option 1 or 2. 

Option 1 and 2 renewables are preferred over Option 3 renewables in the NZEB context, but 

Option 3 renewables are still preferred over off-site purchases of RECs (Option 4). This 

hierarchy values a project that takes some responsibility for generating (or using) its own RE, 

rather than a simple off-site REC purchase. Option 3 renewables also offer many potential 

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benefits of typical distributed generation combined heat and power strategies, and significantly 

reduce source energy use and emissions. 

Option 4 – Purchase or Install Renewable Energy Generated Off Site 

This option addresses purchased RE generated off site that has been certified as a newly installed 

source. Typical examples include utility-based wind, RECs, and other “green” credits as 

certified by Green-E (2009) or other equivalent rating organizations. For a building to use this 

energy option and be considered an NZEB, the off-site RE generated must be a recently installed 

and certified RE source. This new grid-based renewable resource must also be available and 

purchased for the building to maintain an NZEB status. 

A variation on this option could be an organization that puts into place strict efficiency goals and 

negotiates with its power provider to install off-site dedicated wind turbines or PV panels at a 

local or regional off-site location with better solar or wind resources. In this approach, the 

organization might finance or own the hardware (or a portion of the system) and receive credits 

for the power. The power company or a contractor would maintain the hardware. The building 

owner would probably also pay a charge to the utility to “transport” this energy. This would be a 

stronger commitment than buying new RECs. 

A building that purchases all its RE has little incentive to reduce building loads. Through these 

avenues, a building could qualify as zero energy even if it directly consumes a large amount of 

energy generated from fossil fuels. The intentions might be good, but this type of building is the 

least optimal classification of an NZEB and may not reduce energy consumption overall. The 

NZEB classification system responds by valuing this renewable resource at the bottom of the 

classification. 

Net-Zero Energy Buildings: Definitions 

The energy performance of an NZEB can be accounted for or defined in several ways, depending 

on the boundary and the metric. Different definitions may be appropriate, depending on the 

project goals and the values of the design team and building owner. As documented and 

discussed by Torcellini et al. (2006), four commonly used accounting methods are net-zero site 

energy, net-zero source energy, net-zero energy costs, and net-zero energy emissions. Each 

definition uses the grid for net use accounting and has different applicable RE sources. 

•	 Net-Zero Site Energy: A site NZEB produces at least as much RE as it uses in a year, 

when accounted for at the site. 

•	 Net-Zero Source Energy: A source NZEB produces (or purchases) at least as much RE 

as it uses in a year, when accounted for at the source. Source energy refers to the primary 

energy used to extract, process, generate, and deliver the energy to the site. To calculate 

a building’s total source energy, imported and exported energy is multiplied by the 

appropriate site-to-source conversion multipliers based on the utility’s source energy 

type. 

•	 Net-Zero Energy Costs: In a cost NZEB, the amount of money the utility pays the 

building owner for the RE the building exports to the grid is at least equal to the amount 

the owner pays the utility for the energy services and energy used over the year. 

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•	 Net-Zero Emissions: A net-zero emissions building produces (or purchases) enough 

emissions-free RE to offset emissions from all energy used in the building annually. 

Carbon, nitrogen oxides, and sulfur oxides are common emissions that NZEBs offset. To 

calculate a building’s total emissions, imported and exported energy is multiplied by the 

appropriate emission multipliers based on the utility’s emissions and on-site generation 

emissions (if there are any). 

Near Zero-Energy Buildings 

A building may be designed to achieve one or more NZEB definitions, but may not achieve a 

net-zero energy position in operations every year. Any NZEB may fall into the near NZEB 

category in a given year, depending on weather, the condition of the building, operations, etc. A 

well-operating NZEB may also become a near NZEB during abnormal weather years that have 

above-average heating and cooling loads, with below-average solar and wind resources. The 

NZEB status should be measured, reviewed, and tracked each year with utility bills or 

submetering, or both. 

Applying a Classification System to Net-Zero Energy Buildings 

Although all attempts to achieve an NZEB are valuable, we can classify an NZEB based on the 

RE supply options used and definitions met. A building that offsets all its energy use from 

renewable resources available within the footprint is at the top of the NZEB classification system 

at an NZEB:A. A building that achieves an NZEB definition through a combination of on-site 

renenewables and off-site purchases of RECs is placed at the lowest end of the NZEB 

classification at an NZEB:D. Table 2 offers a method for how NZEBs can be classified based on 

which RE supply option the building uses. This table also summarizes how the NZEB 

definitions apply to the NZEB classification system. 

The goal of this type of classification is to encourage building owners and designers to first use 

all possible cost-effective energy efficiency strategies, and then use RE sources and technologies 

that are located on the building. Once all possible cost-effective efficiency and on-site RE 

strategies have been fully exploited, off-site options should be explored if necessary. We do not 

wish to exclude high energy use buildings that exceed the site RE availability, and have provided 

for lower classified NZEBs to include all possible buildings. 

The classifications are in order of preference, NZEB:A being highest, assuming other 

accountability and sustainability metrics are equal. For a building to achieve a certain 

classification, it must reach an NZEB position without needing lower classified sources. For 

example, consider an NZEB using site-based PV in the building’s parking lot and a biomassfueled boiler, as well as some off-site RECs. If the site-based PV generates enough electricity to 

annually offset all energy end uses (heating, ventilation, and air-conditioning, lighting, and plug 

and process loads), the building would be an NZEB:B even if lower classified renewables are 

used. However, if site-based PV and biomass are required to offset the end uses, the building 

would be an NZEB:C. Finally, if site-based PV and imported biomass do not offset all energy 

end uses in the building, the NZEB status would depend in part on off-site credits, and the 

building would be an NZEB:D. 

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Buildings Classified as NZEB:A 

NZEB:A buildings generate and use energy through a combination of energy efficiency and RE 

collected within the building footprint. These buildings can qualify as site because of their use 

of on-site RE resources. If the source and emissions multipliers for an NZEB:A are high during 

times of utility energy use, but low during times the NZEB is exporting to the grid, reaching a 

source or emissions NZEB position may be difficult. Qualifying as a cost NZEB may be 

difficult, depending on the net metering policies in the area. 

Buildings Classified as NZEB:B 

NZEB:B buildings generate and use energy through a combination of energy efficiency, RE 

generated within the footprint, and RE generated within the site. These buildings can qualify as 

site because of their use of on-site RE resources. If the source and emissions multipliers for an 

NZEB:B are high during times of utility energy use, but low during times the NZEB is exporting 

to the grid, reaching a source or emissions NZEB position may be difficult. Qualifying as a cost 

NZEB may be difficult, depending on the net metering policies in the area. 

Buildings Classified as NZEB:C 

NZEB:C buildings use the RE strategies as described for NZEB:A and/or NZEB:B buildings to 

the maximum extent feasible. These buildings also use Option 3, off-site renewable resources 

that are brought on site to produce energy. They may qualify as site, source, and emissions 

NZEBs because they use renewable resources. An NZEB:C source and emission position may 

be difficult if carbon-neutral renewables such as wood chips are used, or if it has unfavorable 

source and carbon multipliers. This can occur if an NZEB exports energy when the utility has 

low source and carbon impacts, but imports energy when the utility has high source and carbon 

impacts. NZEB:C buildings typically do not reach a cost NZEB position because renewable 

materials are purchased to bring on site—it would be very difficult to recoup these expenses by 

any compensation received from the utility for RE generation. 

Buildings Classified as NZEB:D 

NZEB:D buildings use the energy strategies as described for NZEB:A, NZEB:B, and/or NZEB:C 

buildings. On-site renewable strategies are used to the maximum extent feasible. These 

buildings also use Option 4, purchasing certified off-site RE such as utility-scale wind and RECs 

from certified sources. Once all possible cost-effective efficiency and on-site RE strategies have 

been fully exploited, off-site options should be explored if necessary. NZEB:D buildings may 

qualify as source and emissions NZEBs if they purchase enough RE and have favorable source 

and emissions factors. They will not qualify as site and cost NZEBs. 

9
 
 

 

 

 

 

 

 

 

Table 2. Applying NZEB Definitions 

NZEB 

Classification 

Supply 

Option 

Number 

NZEB Supply-Side Options NZEB Definitions Met 

0 Reduce site energy use through energy efficiency and 

demand-side renewable building technologies. NA 

On-Site Supply Options 

A 1 

Use RE sources available within the building's footprint 

and connected to the building's electricity or hot/chilled 

water distribution system. 

Reach an NZEB position without needing NZEB:B, 

NZEB:C, or NZEB:D sources. 

YES: Site, Source, Emissions 

Difficult: Cost 

Potential Issues: 

• Reaching a source or emissions NZEB position is difficult if multipliers are high 

when utility energy is used but low when exporting to the grid. 

• Qualifying as a cost NZEB may be difficult if net metering policies are 

unfavorable. 

B 2 

NZEB:A sources may also be used 

and 

Use RE sources that are outside the building footprint but 

still within the building site and connected to the building's 

electricity or hot/chilled water distribution system. 

Reach an NZEB position without needing NZEB:C or 

NZEB:D sources. 

YES: Site, Source, Cost, Emissions 

Difficult: Cost 

Potential Issues: 

• Reaching a source or emissions NZEB position is difficult if multipliers are high 

when utility energy is used but low when exporting to the grid. 

• Qualifying as a cost NZEB may be difficult if net metering policies are 

unfavorable. 

Off-Site Supply Options 

C 3 

NZEB:A and/or NZEB:B sources are used (to the extent 

feasible) 

and 

Use RE sources available off-site to generate energy 

through on-site processes connected to the building's 

electricity or hot/chilled water distribution system. 

Reach an NZEB position without needing NZEB:D sources. 

YES: Site 

Difficult: Source, Cost, Emissions 

Potential Issues: 

• Reaching a source or emissions NZEB position is difficult if carbon-neutral 

renewables are used or if source and carbon multipliers are high when utility 

energy is used but low when exporting to the grid. 

• Qualifying as a cost NZEB is very difficult because of the cost to purchase and 

continually transport off-site renewable materials to the site. 

D 4 

NZEB:A and/or NZEB:B sources are used (to the extent 

feasible), NZEB:C sources may also be used 

and 

Purchase recently added off-site RE sources, as certified 

from Green-E (2009) or other equivalent REC programs. 

Continue to purchase the generation from this new resource 

to maintain NZEB status. 

YES: Source, Emissions 

NO: Site, Cost 

Potential Issues: 

• Reaching a source and emissions NZEB position is based on the type and 

quantity of the purchased RE. 

• Qualifying as a site and cost NZEB is not possible. 

10
 
 

 

 

 

 

 

 

 

 

Off-Grid Net-Zero Energy Buildings 

Achieving an NZEB without the grid is very difficult, as the current generation of energy storage 

technologies is limited. Despite the electrical energy independence of off-grid buildings, they 

usually rely on outside energy sources such as propane and other fuels for cooking, space 

heating, water heating, and backup generators. Off-grid buildings cannot feed their excess 

energy production back onto the grid to offset other energy uses. As a result, the energy 

production from renewable resources must be oversized. In many cases (especially during the 

summer), excess generated energy cannot be used. 

It is possible, though, to have a grid-independent NZEB. To do this, any backup energy needs 

would have to be supplied from renewable resources such as wood pellets or biodiesel. An offgrid building that uses no fossil fuels could be considered a pure NZEB, as no fossil fuels or net 

annual energy balances are needed or used. 

Zero Energy Beyond a Single Building 

As the concept of NZEBs becomes technically and economically feasible, extending its 

boundary to groups of buildings, campuses, communities, towns, bases, or cities becomes 

possible. An alternative to single NZEBs is zero-energy campuses, neighborhoods, or 

communities. Extending the net-zero energy boundary beyond a single building addresses the 

emergence of communities, neighborhoods, and campuses that generate RE for a certain group 

of buildings; however, the energy does not necessarily connect directly to a specific building’s 

utility meter. This would be considered a community-based RE system that would be connected 

to the grid or to a district heating or cooling system. 

For a large organization or a neighborhood, it is often more cost effective and efficient to 

generate RE in a central location on the campus or in the community, rather than on (or in 

addition to) each building. Community-scale systems allow for a single point for all 

maintenance and offer economies of scale—larger, central systems can be better optimized and 

cost less per kilowatt of generation capacity. Community-based RE systems, however, have 

some transmission and distribution losses when providing RE directly to a building. 

Inefficiencies and costs such as distribution piping and wiring, pumping losses, distribution 

transformers, and thermal losses are often associated with a district distribution system rather 

than with a building-based RE generation system. 

The energy use accounting methods and RE supply hierarchy concepts developed in this paper 

for stand-alone NZEBs still apply to a community. A parallel definition system further defines 

zero-energy communities and extends the single-building net-zero concepts to multiple buildings 

with district RE systems (Carlisle et al. 2009). 

Conclusions 

This classification system begins ranking energy supply options in the NZEB context. As 

designers and owners look to design NZEBs, a discussion of which classification to achieve 

would be helpful in setting goals. Since the publication of the initial NZEB definition paper 

(Torcellini et al. 2006), we have applied these definitions to multiple NZEB examples with 

various RE options. This paper represents an update to the NZEB definitions based on realworld applications. Some of the buildings used to evaluate these definitions are included in the 

11
 
 

 

 

 

Zero Energy Buildings Database, which was developed by the U.S. Department of Energy and is 

available at www.eere.energy.gov/buildings/commercial_initiative/zero_energy_projects.html. 

In addition to refining the definitions, we felt that it would be beneficial to classify buildings 

based on how well they achieve NZEB status by considering which RE supply options they use. 

A building that offsets all its energy use from renewable resources that are available within the 

footprint is at the top of the NZEB classification system at an NZEB:A. A building that achieves 

an NZEB definition through a combination of on-site renenewables and off-site purchases of 

RECs is placed at the lowest end of the NZEB classification at an NZEB:D. Figure 1 provides a 

simple flow chart that illustrates how to navigate the prerequisites and classification 

requirements to classify NZEBs. 

This classification system is meant to encourage, when possible, energy efficiency strategies 

followed by the use of footprint and on-site RE to power buildings. The long-term benefits of 

these options include optimized usability of power generation capacity in the NZEB context; less 

reliance on and investment in the grid; less energy required because energy losses through 

conversion, transmission, and distribution are minimized; and fewer peak demand issues with 

utilities. Designers will also create more energy-efficient, high-performance buildings if the 

buildings must generate their own energy. The lower end of the NZEB classification also 

provides a means for high energy use buildings to minimize environmental impact through 

NZEB design strategies. This NZEB classification system is applicable to both single building 

projects as well as a set of buildings in a community or campus. 

12
 
Figure 1. NZEB Classification Flow Chart 

13
 
 

 

 

 

 

 

 

 

 

 

 

 

References 

Carlisle, N; VanGeet, O; Pless, S. (2009). Definition of a "Zero Net Energy" Community. 

NREL Report No. TP-7A2-46065. http://www.nrel.gov/docs/fy10osti/46065.pdf 

City of Boulder. (2006). Solar Access Guide, Building Services Center, Boulder, Colorado 

http://joomla.ci.boulder.co.us/files/PDS/codes/solrshad.pdf. 

Code of Federal Regulations. (2009). 40 CFR 260.10, Title 40, Protection of Environment. 

Crawley, D.; Pless, S.; Torcellini, P.A. (2009). “Getting to Net Zero.” ASHRAE Journal, 

September 2009. NREL Report No. JA-550-46382. www.nrel.gov/docs/fy09osti/46382.pdf 

Accessible at ASHRAE: www.ashrae.org/members/doc/1819_8003473.pdf . 

Deru, M.; Torcellini, P. (2004). Improving Sustainability of Buildings through a PerformanceBased Design Approach: Preprint. NREL Report No. CP-550-36276. World Renewable 

Energy Congress VIII, Denver, CO: August 29−September 3, 2004. Golden, CO: National 

Renewable Energy Laboratory, 8 pp. www.nrel.gov/docs/fy04osti/36276.pdf. 

Deru, M.; Torcellini, P. (2007). Source Energy and Emission Factors for Energy Use in 

Buildings (Revised). Technical Report NREL/TP-550-38617. Golden, CO: National 

Renewable Energy Laboratory. www.nrel.gov/docs/fy07osti/38617.pdf. 

EIA. (2005). Annual Energy Review 2004. www.eia.doe.gov/emeu/aer/contents.html. 

Washington, DC: U.S. Department of Energy, Energy Information Administration. 

Excel. (2010). Windsource. www.xcelenergy.com/Minnesota/Business/RenewableEnergy/ 

Windsource_/Pages/Windsource.aspx. Last accessed February 2010. 

Green-E. (2009). www.green-e.org/. Last accessed June 2010. 

Torcellini, P.; Pless, S.; Deru, M.; Crawley, D. (2006). “Zero Energy Buildings: A Critical 

Look at the Definition.” ACEEE Summer Study on Energy Efficiency in Buildings, August 

2006, Pacific Grove, CA. Golden, CO: National Renewable Energy Laboratory, 16 pp. 

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Net-Zero Energy Buildings: A Classification System Based on 

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14. ABSTRACT (Maximum 200 Words) 

A net-zero energy building (NZEB) is a residential or commercial building with greatly reduced energy needs through 

efficiency gains such that the balance of energy needs can be supplied with renewable technologies. Past work has 

developed a common NZEB definition system to better the understanding of what “zero energy” means. Four welldocumented definitions—net-zero site energy, net-zero source energy, net-zero energy costs, and net-zero energy 

emissions— were developed. Each NZEB definition has merits as a zero energy design goal, with pluses and 

minuses for each. In this paper, we propose a classification system for NZEBs based on the renewable energy 

sources used by a building. In addition, we look at how this classification is applied to the previously developed 

NZEB definitions. 

15. SUBJECT TERMS 

zeb; zero energy building; nzeb; net zero energy building; renewable energy; classification; energy efficiency 

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