Paul: So tell us about HOUZE.

David: HOUZE Advanced Building Science Inc. is a Houston-based company. HOUZE is spelled H-O-U-Z-E and the ZE stands for zero energy and we're building zero energy homes in Houston, Texas and getting ready to build across the Unite States, but we also go a little further than that. We've engaged scientists from the Houston area, NASA, the Houston Advanced Research Center, to create new technologies that change the performance of homes.

Paul: And is it really zero energy?

David: There are many, many different definitions about zero energy homes, but it's powered by natural gas, but it generates more electricity than the homes use. We sell that back to offset the natural gas cost.

Paul: All right, but is there a connection to the grid?

David: The home is powered off grid first. Then it has battery storage backup at the second tier. And then the grid is the third level of energy security.

Paul: Both to receive and to give.

David: And to sell back.

Paul: Fascinating. And where are you building these homes?

David: We searched the entire United States and fortunately, we found right in our backyard in Independence Heights, a community just north of the Houston Heights. We felt like was the ideal setting for introducing these game changing homes.

Paul: Well, and the homes look like what?

David: The homes look like they're arts and crafts style homes. The first model home, demonstration home is a bungalow and so it's very counterintuitive. A lot of people perceive that a zero energy home would be very modern and these look like they belong perfectly in Woodland Heights.

Paul: And the approximate retail cost of these?

David: The sales range of the homes in Independence Heights is $150,000.00 to $250,000.00

Paul: For what square footage?

David: The square footage ranges from 1,200 square feet to 2,800 square feet.

Paul: As I've heard people talk about either lowering the energy consumption or producing energy to kind of hit that right balance, what's your secret?

David: It's really a convergence of a lot of technologies and changing situations. And it's inspired a little bit by mobile devices and tablets. We find that the greatest technologies the cost reduces and the performance improves and after dealing with home builders and large developers for 25 years, the home is really the last product, American product to really embrace this change.

Paul: As you look on the efficiency side, how do you make these homes – how are your homes more efficient?

David: Well, it starts with efficiency. We wanted to eliminate all waste from the zero based thinking. We thought, “How do we build a building envelope that is so well insulated and so tight that it consumes very little energy?” At the same time, we wanted to build a home that was more durable and safer. So, Houston being an area that we do have hurricanes, we felt like it needed to be able to withstand at least 130 plus mile an hour winds. So, the framing is steel. It's light gauge steel. The insulation is very, very tight and dense. And then we had to evaluate the weakest link in that building envelope.

Paul: The windows?

David: The windows and the doors. So when we added it all together, it became a super tight, super strong building envelope. The HERS rating on our homes –

Paul: And HERS?

David: Home energy rating score. We achieved a 44, which is unheard of. And for listeners, I would encourage them if they're home shoppers, ask the builder what is the HER score.

Paul: Well, and that's the efficiency side. Talk about the power generation side.

David: Okay. We thought, it's one thing to achieve a super energy efficient home and the term energy star or energy efficient is really kind of hard to find any new home or any home that's not talking about energy efficiency. We felt like we could really accelerate the market by five to ten years if we could produce all the electricity and then some on site. So we went on a global quest to identify technologies that could provide that power cost effectively.

Paul: And are these solar? Small scale wind?

David: We looked at solar. We looked at wind. We looked at fuel cells everywhere in the world. We came remarkably close to a small fuel cell out of Australia. We got really close to implementing it. But it was new emerging technology. We felt like it wasn't quite as reliable. And again, we came back to Houston and there's an awful lot of talent here, NASA scientists and so we engaged leading scientists and existing technologies and we have a micro-cogeneration power cell that produces the electricity.

Paul: Well, tell me about that.

David: The micro-cogeneration power cell is a combination of traditional technology, technology that would power an industrial site, for example. We have scaled it down to size so it operates on a home. It produces electricity and it also produces thermal heat.

Paul: So you've got a great looking bungalow home that's efficient. You're generating power on site and selling it to the grid?

David: We're selling it back to the grid. So it's powered by natural gas. So as you can imagine, a lot of Houston companies and the American Gas Association like what we're doing.

Paul: Sure and gas is cheap now.

David: The home is powered by 100 percent natural gas that's domestic. It's clean and it's inexpensive. What we know is the home owner doesn't want an energy payment. So we have the first and only of its kind zero energy warranty that guarantees ten years of zero electricity and zero gas payments.

Paul: Incredible. So, now that you've figured it out, now that you've unlocked the puzzle, what – how do you scale?

David: We team with industry giants and also, public partnerships. So we partner with the city of Houston and we didn't go in with our hand out. We went in with a great concept and we secured – we own about 90 lots in Independence Heights. So it's enough to really make a difference in the community. And we went in with a game plan that said, this is what we would like to do. We'd like the birthplace to be in Houston, Texas and we'd like it to be in Independence Heights. Independence Heights is a historic African American community that's been underserved for many years. We felt like this would be a good community development project. The city helped us in identifying the community leaders that we needed to meet with and we got great input from them and it's been a great partnership.

Paul: That's fantastic and do you have plans then outside of Houston?

David: We are expanding outside of Houston. Along with our industry partners, we're taking this to 30 U.S. cities and the way that we're doing that is we're partnering with local builders. We're sending out later next month an RFQ and RFP to builders that we've identified in these market areas. AT&T digital life is one of our strategic teammates.

Paul: Which is pretty innovative, from what I've heard.

David: Very, very innovative. We've all heard of smart homes. They were way ahead of their time. Twenty years ago, they weren't very smart. They weren't very reliable. Today, the convergence of technologies, they're really smart and they're inexpensive.

Paul: Well, incredible. And Houston's lucky to have you as the home where it originated and it sounds like the mayor's office recognized this fairly recently.

David: The mayor hosted a press conference on November 29. Since that day, we've had over 800 people register online or contact us about either purchasing or building a zero energy home.

Paul: What's the Web address?

David: Thezeroenergyhome.com.