Enter the Zero-Energy House

NEW YORK (TheStreet) -- A zero-energy house is one with a net energy consumption of zero.

The house is connected to the electrical grid through the local power company interface (commonly called a meter) that provides electricity to the house when it is needed and accepts energy back to the grid when the house produces more than it uses.

General Electric(GE Quote)discussed its objective of providing the technology (with partners) July 14 at a General Electric Global Research Symposium in Niskayuna, N.Y.

GE wants to have the entire technology package in place for mass usage in less than six years. GE states that the total cost difference over conventional construction will be 10%. A diagram showing all the elements to be incorporated can be seen here. The elements involved include:

• Smart Meter: A communications gateway between the smart grid and the home.
• Home Energy Manager: The central nervous system for the home will help optimize energy consumption. This will communicate directly with the utility smart grid.
• Energy Storage: Battery storage for back-up power and peak loads.
• Solar: Photovoltaic arrays.
• Wind: Small wind turbine.
• Hot Water: Heat-pump water heater.
• Appliances: GE Diamond Response appliances operating in cooperation with smart grid via the Smart Meter and the Home Energy Manager.
• Lighting: High efficiency, CFL, LED and OLED lighting.
• Geothermal Heat Pumps: Heat exchange with the earth and ground water reduces HVAC and water heating energy requirements.

Does the extra expense make economic sense for the buyer? The following table says it definitely does. The payback is from 7.4 to 11.2 years, depending on future energy costs and size of the home.

The payback, after 25 years, in reduced energy consumption is about 42% of the construction cost, including the 10% premium, with an average of 5% per year increase in energy cost.

With today's energy costs, the 25-year savings are slightly above 20%. With an average increase of 10% per year in energy costs, the savings are nearly 50% of construction costs. All numbers would become much more favorable if alternative energy tax credits were applied (which they weren't).

Money-Saving House Source

So this project shows promise for future home owners, but how should investors react? The majority of the GE partners in this project are small and privately held, but there are a few publicly traded companies in this space. (See the table below.) Smart meter maker Itron(ITRI Quote) could see business grow dramatically if there were a widespread adoption of the GE concepts, but they do have significant competition from privately held European companies Elster and Landis + Gyr. Both of these companies have established business relationships with a number of U.S. utilities.

Zero-Energy House Companies Source