This couple spent $48,000 to convert their Portland, Oregon, home to 'net zero': 'The future is efficient and renewable'

When Ryan Shanahan, 41, decided to buy a house in Portland, Oregon, he knew from the start that he wanted his future home to be "net zero."

To be net zero is to cut greenhouse gas emissions to as close to zero as possible, with any remaining emissions reabsorbed from the atmosphere, by oceans and forests, for instance, according to the United Nations.

"My mantra is that the future is efficient, electric, and renewable," Shanahan tells CNBC Make It. He is a zero-energy retrofits manager at Birdsmouth, a zero-energy housing company.

He advises clients on how to convert their existing property into a net-zero building.

In 2014, Shanahan purchased a 116-year-old two-bedroom, one-bathroom house for $275,000.

For him, it was the best option because it already had some of the design features needed to help reach his goal of making the house zero energy:

To buy the house, Shanahan took advantage of a $15,000 forgivable loan from Oregon's Down Payment Assistance program. The program helps Oregonians buy homes with assistance from the state's approved mortgage lenders.

Shortly after Shanahan bought the house, his partner, Megan Milligan, 39, an office manager at Renewable Northwest, moved in.

The couple's monthly payments add up to $2,014, including tax and homeowner's insurance.

Shanahan and Milligan were able to save some money on renovations because they did a lot of the demolition work themselves.

In total, the couple spent $61,325 retrofitting the house:

That number was reduced to $48,325 after the couple received several tax credits, rebates and incentives from the state of Oregon and the federal government.

Shanahan and Milligan took out a $100,000 home equity line of credit, or HELOC, for the renovations, which has an interest rate that is higher than usual, according to the Oregon State Credit Union.

The couple allots $1,250 a month to pay down the credit as fast as possible.

In 2019, their electricity costs totaled $1,100. The couple installed solar panels in 2020, and their electricity costs dropped to $285.

Shanahan said the amount of sunlight the house receives and the position of the solar panels meant that after one year of a net-zero house, they were able to produce 110% of the energy they use.

They were producing 10% more energy than they were using.

The couple uses that 10% surplus to charge their electric car. Since getting the car, Shanahan said, they did have to start paying for electricity again — but not much.

Shanahan and Milligan have no plans to change their net-zero lifestyle. Assuming the cost of energy goes up 4%, Shanahan estimates that the investments they've made in the house will pay for themselves by year 16 or 17 of their 30-year mortgage.

"We're in it for the run long at this point. We've invested so much and we love this home," Milligan said.

To be more energy efficient, "start with the small stuff," Shanahan says. "If you're buying a new stove, buy the electric version. Get the efficient version. Capture the available incentives that exist because if you put it all together, you could actually get somewhere."

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