Zero Energy Poised for Mega Growth


With energy efficiency consuming a larger share of building mandates, global revenues from the Zero Energy Building market are expected to more than double in the next generation.

On a global scale, commercial and residential buildings account for 35 to 40 percent of total final energy consumption, a toll that Zero Energy Buildings (ZEBs) seek to counter by generating as much energy from onsite renewables as they use over the course of a year.

The buildings are also known as net zero energy buildings and, in the European Union, nearly
zero energy buildings (nZEBs).

44.5% CAGR

A new market forecast by Navigant Research projects that the global market for Zero Energy Buildings will explode in the next 20 years—growing from $629.3 million in 2014 to $1.4 trillion by 2035, mostly due to new regulations, laws and building codes worldwide.

The increase reflects a Compound Annual Growth Rate of 44.5 percent, according to Navigant. The report focuses on new commercial, commercial retrofit and residential construction.

“While several pilots are trying to prove the investment savings in lower energy bills, a stronger driver for the adoption of ZEBs is regulation,” the report notes.

“Policies like the EU’s Energy Performance of Buildings Directive (EPBD) and California’s evolving Title 24 building code are forcing ZEB markets to come into place for new commercial, new residential, and retrofitted commercial space.”

Technology is King

ZEBs are possible because they bring together existing energy technologies that can “form a high-performance building,” according the forecast’s executive summary.

Popular solar PV panels, for example, not only produce renewable power, but also are cheaper and more reliable than other renewable power sources.

Navigant ZEB solar panels

Solar panels are increasingly used in ZEB design because they are cheaper and more reliable than other renewable power sources.

Other technologies that play a noteworthy role in ZEBs include:

  • Energy-efficient lighting (e.g., light-emitting diodes, or LEDs);
  • Advanced glazing and smart glass;
  • Advanced wall insulation;
  • Energy-efficient heating, ventilation, and air conditioning (HVAC) systems; and
  • Energy management systems.

Myriad equipment and service providers are positioning themselves to prepare for the "inevitable widespread adoption of ZEBs," says the report, which forecasts "significant growth in the technology and equipment associated with the building envelope, as well as the soft costs associated with ZEBs."

Key Market Trends

Early Zero Energy Building adopters have now turned to retrofitting older buildings with new, energy-efficient technology.

Europe is already forecast to see a surge in the market for energy-efficient products over the next 10 years.


The U.S. Department of Energy's Better Buildings Alliance promotes energy efficiency in commercial buildings by efforts with owners, operators and managers.

According to Navigant, hundreds of ZEBs are in the pilot stage, acting as experiments to demonstrate that the new technologies are worth the investment. But those carrots are secondary to the stick of tougher new regulations.

Secondary market drivers include corporations and individuals who want a low-carbon lifestyle and others who want to save money on utilities.

What's in a Name

One potential drawback to quantifying growth: a consensus on terms. The report cites a "variety of definitions of a ZEB" and a lack of a single standards body "to identify what success looks like."

Complicating the picture are multiple local interpretations of what makes a ZEB. "Every EU member state, for example, defines nearly zero energy in a different way, making it challenging for vendors to serve multiple countries," the report notes.

Global Market Size

While desire and regulation will cause a boom in ZEBs, the growth is expected to start slowly and, initially, remain focused in the EU, according to Navigant.

Navigant ZEB forcast
Navigant Research

ZEB revenue is expected to more than double in the next two decades, with growth heavy in the EU.

The largest component of global ZEB revenue will be from soft costs like design and management, which are expected to reach $414.2 billion in 2035.

Outside of the EU, the United States is primed for a high ZEB adoption rate, led by California and its aggressive building codes, Navigant said.


Tagged categories: Asia Pacific; Building Envelope; EMEA (Europe, Middle East and Africa); Energy codes; Energy efficiency; Green building; Green design; Latin America; Net Zero Energy ; North America; Solar energy

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