Zero Net Energy: Avoiding Future Electricity Costs at UCSB’s Division of Student Affairs
1. Introduction
The University of California, Santa Barbara has a long-term stake in the Santa Barbara
community. UCSB is a location specific institution, and plans to remain in Santa Barbara long
into the future. The division of Student Affairs, a critical component of the institution that
provides integral services to the students, has a fixed energy utility budget despite these longterm growth plans. The division has a fixed $ 1.2 million annual energy utility budget, with more
than half of that spent on electricity. Planners acknowledge that inflation-driven price increases,
growing resource constraints, greenhouse gas reduction policies, infrastructure upgrades, and
geopolitical unknowns cause significant uncertainty in the future price of energy. Projected price
increases will strain current resources, thereby compromising the operation of student services.
This has motivated the division to plan for future energy use through a strategic and
aggressive set of goals requiring substantial upfront investment. Student Affairs will redirect
future energy utility funds by investing in the triple solution: energy efficiency, energy
conservation, and renewable energy technologies. These strategies provide the foundation for (1)
Leadership in Energy and Environmental Design for Existing Buildings: Operations and
Management (LEED-EBOM) Platinum certification for all Student Affairs buildings and (2) a
zero net energy (ZNE) state for the division’s building portfolio. The ZNE state is achieved when
there are no net purchases of energy from the utility.
The goal of this paper is to present the initial findings of achieving one major component
of the zero net energy initiative; elimination of net annual electricity expenditures through
strategic investments in the triple solution.
2. Student Affairs Building Portfolio
The Student Affairs building portfolio consists of administrative building, health and recreation
centers, and other mixed-use space. We compiled annual electricity usage data for each building
to identify the contribution of each building to the total electricity consumption of the division.
This energy data is pulled from either local read or pulse meter data, and aggregated into a single
database for analysis. The electricity cost is based on average retail price of electricity at UCSB
in 2010, which was $0.0114/kWh.
Table 1: Student Affairs 2010 electricity consumption and expenditures
Building
Student Resource
Intercollegiate Athletics
West Campus Child Care
Recreation Center I
Recreation Center II
Student Affairs and Administrative Services
Student Health
Student Services
Total
kWh Consumption
710,342
813,120
55,600
1,557,552
370,000
1,216,000
463,639
371,232
5,557,485
Electricity cost ($)
$81,167
$92,911
$6,353
$177,974
$42,278
$138,946
$52,978
$42,419
$635,026
This information provides use with an electricity cost baseline, which is important for identifying
the investment pool available for the zero net energy initiative. This investment pool can then be
measured against the technical potential and costs of energy efficiency and renewable energy.
3. Analysis
3.1 Zero Net Energy Investment Pool
Assuming that the ZNE policy avoids all future electricity costs, the zero net energy investment
pool is quantified by an analysis of these costs. We assume a discount rate of 3% for this
analysis. We also consider different scenarios for electricity price inflation; we run this for 0%
annual inflation and 2.5% annual inflation, which is based on linear regression analysis of
electricity rates at UCSB over the last 15 years. We consider a 30-year time frame, which we
consider realistic based on the useful life of the investments.
Table 2: ZNE investment pool with 2.5% annual inflation
Annual Electricity Costs ($)
Annual electricity inflation
Discount Rate
Annual Infrastructure Maintenance ($)
Adjusted Fixed Costs ($)
Time period (Years)
Total Investment Pool ($)
635,025.51
0.025
0.03
31,751.28
603,274.24
30
16,894,686.60
Table 3: ZNE investment pool with no inflation
Annual Electricity Costs ($)
Annual Electricity Inflation
Discount Rate
Annual Infrastructure Maintenance ($)
Adjusted Fixed Costs ($)
Time Period (Years)
Total Investment Pool ($)
635,025.51
0
0.03
31,751.28
603,274.24
30
12,065,743.22
Assuming that electricity prices escalate at 2.5% annually, as trended from historical cost data,
the division has the justification to spend about $16.9 million to eliminate their electricity costs
over a 30-year period. Assuming that there is not inflation in the price of electricity, then the
investment pool is less; approximately $12 million. The next step was to identify the energy
efficiency and renewable energy costs for achieving zero net energy.
3.2 Energy Efficiency Analysis
I assumed that a 10% total energy savings through efficiency would cost $300,000, and then
double for every next 10% of savings. I assume that there is a technical limit on the energy
efficiency of the Student Affairs building portfolio at 70%. Due to the diminishing returns on
energy efficiency investments, achieving up to 70% reduction in total electricity purchases
through energy efficiency comes at a high cost, whereas a smaller percentage is more cost
effective.
Table 4: Energy Efficiency Technical Potential and Costs
% Reduction through
Efficiency
0
10
20
30
40
50
60
70
Efficiency Capital
Total kWh with Efficiency
Investments ($)
Investments
0.00
5,557,484.96
300,000.00
5,001,736.46
600,000.00
4,445,987.97
1,200,000.00
3,890,239.47
2,400,000.00
3,334,490.98
4,800,000.00
2,778,742.48
9,600,000.00
2,222,993.98
19,200,000.00
1,667,245.49
3.3 Renewable Energy Analysis
Table 5: Renewable Energy (Photovoltaic) Cost Effectiveness Metric
kWh Generated per year
Total Cost ($)
$/kWh (installed)
Annual Maintenance Costs (% of total)
Inverter Lifetime (years)
$/kWh (Installed + maintenance and upgrades)
806000
3414000
4.23573201
1
15
4.23573201
I use the parking structure 22 photovoltaic array currently in the preconstruction phase as a
metric for renewable energy cost effectiveness. I assume that there are linear returns to
photovoltaic investments. This based on the assumption that there is the technical potential
for similar projects at UCSB to provide all of Student Affairs current electricity consumption.
Table 6: Renewable Energy Potential and Costs
% Generated
Through RE
100
90
80
70
60
50
40
30
RE Capital
RE Generation
Investments ($)
(kWh)
23,540,016.94
5,557,484.96
21,186,015.25
5,001,736.46
18,832,013.55
4,445,987.97
16,478,011.86
3,890,239.47
14,124,010.16
3,334,490.98
11,770,008.47
2,778,742.48
9,416,006.78
2,222,993.98
7,062,005.08
1,667,245.49
3.4 ZNE Matrix: Combining Renewable Energy and Energy Efficiency
After coupling the renewable energy and energy efficiency cost data, it becomes clear that
the combination of the two strategies provides the most cost effective policy for achieving
ZNE. Additionally, it also shows that when electricity inflation is integrated into the model,
the 30-year ZNE investment pool is less than the total cost of the investments.
Efficiency
Investments
(millions $)
0.00
0.30
0.60
1.20
2.40
4.80
9.60
19.20
PV
Investments
(millions $)
Total
Investments
(millions $)
23.54
21.19
18.83
16.48
14.12
11.77
9.42
7.06
23.54
21.49
19.43
17.68
16.52
16.57
19.02
26.26
% Reduction
through PV,
Efficiency
PV=100, EE=0
PV=90, EE=10
PV=80, EE=20
PV=70, EE=30
PV=60, EE=40
PV=50, EE= 50
PV=40, EE=60
PV=30, PV=70
ZNE
Investment
Pool (no
Inflation)
(millions $)
$12.07
$12.07
$12.07
$12.07
$12.07
$12.07
$12.07
$12.07
ZNE
Investment
Pool (2.5%
inflation)
(millions $)
$16.89
$16.89
$16.89
$16.89
$16.89
$16.89
$16.89
$16.89
Chart 1: Costs of Energy Efficiency and Renewable Energy
25
25
20
20
15
15
10
10
Cost of PV Investments
(Milltions of $)
Cost Of Effiency Investmetns (Millions of $)
Costs of Efficiency and PV to Reach ZNE
PV Investments (millions
$)
Efficiency Investments
(millions $)
5
5
0
0
PV=100,
EE=0
PV=90,
EE=10
PV=80,
EE=20
PV=70,
EE=30
PV=60,
EE=40
PV=50, EE=
50
PV=40,
EE=60
PV=30,
PV=70
Chart 2: Total Cost of Zero Net Energy Compared to 30 year Investment Pool
Total Cost of ZNE compared to 30 year ZNE Investment Pool
30.00
25.00
Millions of $
20.00
Cost of ZNE
15.00
ZNE Investment pool (no inflation)
ZNE Investment pool (2.5% inflation)
10.00
5.00
0.00
PV=100,
EE=0
PV=90,
EE=10
PV=80,
EE=20
PV=70,
EE=30
PV=60,
EE=40
PV=50,
EE= 50
PV=40,
EE=60
PV=30,
PV=70