Ask the Expert: What’s the Difference Between Net-Zero and Carbon-Neutral?

Ask the Expert: What’s the difference between “net-zero” and “carbon-neutral” in relation to buildings and efficiency?

Ryan Pollin, ERS, for Zondits

There are many different but nearly synonymous terms for buildings, campuses, and communities going in the general direction of net zero. Per the Department of Energy, the best term is a zero energy building (ZEB). This is what most people who talk about net zero are talking about, whether they say ZEB, ZNE, or NZE.

Zero Energy Building (ZEB)

An energy-efficient building where, on a source energy basis, the actual annual delivered energy is less than or equal to the on-site renewable exported energy.  

This means that as long as on-site generation of renewables is greater than the source energy delivered (be it electricity, natural gas, or something else), the building is net zero. There is no carbon accounting involved here yet. Thought leaders in the space are beginning to define building performance in terms of carbon, starting with the definition zero net carbon, and the there are some interesting differences expressed there (that’s an article of its own that we’ll write someday). An even stricter term, where it might be useful, is “off-grid,” which is well and truly net-zero, as the building has no capacity to import energy at all.

Claiming that a building is carbon-neutral is very similar to a ZEB, except that it would not be restricted to on-site generation; rather, it could have a contract for renewable energy purchased elsewhere. This is “weaker” in a few ways:

  • It doesn’t necessarily emphasize energy efficiency in the building – it could be an energy dinosaur with a new purchasing contract, and that leaves opportunities on the table.
  • The “offsetting” – whether it is done with renewable energy purchase contracts (of which there are many varieties) or simply RECs or similar vehicles – may or may not be set up with source energy consumption in mind. And if it is not, it isn’t truly accounting for the fossil fuel burden that it’s causing on the grid.
  • Last – and this one gets complicated quickly – it almost always creates less net benefit to procure renewable energy from a faraway land than it does to generate it on-site. For instance, the faraway renewables may have already been installed or planned, making the incremental difference to the grid zero while still rewarding the greenwashing points. The incremental improvement to the grid is most significant when consumption is offset locally, as it doesn’t exacerbate the grid’s needs for transmission and storage capacity to centralized or faraway renewables (you can think of it as improving the site/source ratio of the grid’s power mix).

I’ll say that “carbon-neutral” certainly has its place. On-site generation is simply not possible in a place like a Manhattan high-rise. So, while they can and should maximize their building efficiency and on-site renewables, they will certainly need to procure off-site renewable energy to make up the balance. I might posit that where a building could be net-zero, it should be, and where it cannot (which is very few places, so don’t get lazy on this!), it should strive to be carbon neutral.

Keep in mind that having common terms and shared language helps us to accomplish our work, but at the end of the day what is most important is that we are all striving for very high-performing buildings everywhere, whatever term you may use.