The Kimberton Village Green Condominiums are a unique project -- using existing, well-established technology, the builders are creating market-rate homes that are so energy efficient, they have essentially no heating or cooling bills. Their ad reads "No heating bill. No air-conditioning bill. EVER."

Make that: the draft of their ad. They haven't run one yet, haven't started building yet - but half of the units are already spoken for. Dan Orzech, the president of Earth Rising Homes, talks about the demand for green homes, the Kimberton process so far, and the future of energy.

It emerged out of looking at existing green buildings, like the passive houses in Europe, which are so efficient that their heating requirements are only about two watts. That's about what a hand-held hair dryer puts out. They have no furnace at all, they get their heat from their lighting and appliances, and from passive solar heating. There are thousands of them in Germany and Austria. Closer to home, we've got the first LEED gold certified home in the country a few miles from here, which is also net zero; the builder of that home, Jackie O'Neil, will be moving into our development.

We were looking at these efficiencies and realized that the construction costs are not that much greater to build a home like that, particularly when you're building more than one unit. And once you've optimized the building, the energy costs are relatively small. So our thinking was "Why not?"

Do you think other home builders will follow your lead?

We think they're not going to have a choice, at least in terms of building green. Right now, in this down market, we're selling houses, when most conventional builders can't give them away. For years, it's been a chicken-and-egg situation, with builders saying they'll build green homes when consumers ask for them, and consumers not buying them because there was nothing out there to buy. Our corporate mission is to transform the housing market, not through government regulation, but through the free market, by showing builders that they can make money building green homes, and that they'll lose money if they don't.

In many ways, the Prius is our model. Before the Prius, if you wanted to be more sustainable in your transportation, you were on your own. You did car sharing, walked places, rode your bike; but since the market didn't provide a ready-made solution, it took some effort. The Prius made it easy for people who weren't about to make a major lifestyle change to do something greener with their transportation. You didn't have to think twice before buying it. We want to do the same thing with the housing market.

What's Kimberton like? Why choose this location?

Kimberton is a nice little village, and it's in an area which is already attuned to progressive and green thinking. There's a Waldorf school in town, there are four or five Community Supported Agriculture (CSA) farms. It's a pretty area, surrounded by rolling countryside, but at the same time it's not far from Philadelphia and major shopping areas and office parks.

Our development is in the middle of the town, in an area which is zoned as mixed-use, so we've got commercial units on the ground floor, facing the street, with residential above. We're designing the residential units to attract people who might want a live/work situation- computer programmers, massage therapists, people who could work at home. The zoning is meant to encourage a sort of New Urbanism-type center, which works well in Kimberton - people want to walk to things, get their groceries, go to the post office without getting into their car. One of the things we'd like to do is put a footpath between our development and the center of the village, which is about a block away.

We're also in line with the overall land-use plan for the area, which encourages development in already-populated areas, instead of building on virgin farm land. This is an infill development, meaning it's a lot that's been sitting empty for years.

You did much of your design work for the development through a charrette. What is that?

A charrette is a collaborative and open approach to design which is becoming increasingly popular for sustainable development. In the traditional approach, you've got an architect and an engineer and a developer who come up with a plan for a development, and then present it to the local government more or less as a fait accompli. In a charrette, you bring all the stakeholders together in one room for a concentrated design process. Ours ran for two days, plus a public presentation of the results one evening. For a bigger project, it might take a week.

Who was involved in the charrette?

About fifty people total took part in the design process, some just dropping in for an hour or two on their lunch break, and some coming for the whole two days. We had people from the local government, neighbors, future residents, and people who were just interested in green building. At the public presentation, which we held a few weeks later to show people what we'd accomplished, we had about 75 people show up.

How were they brought in? What kind of outreach did you have to do?

We received a small grant from Ben Franklin Technology Partners to do the charrette, which was conducted by Prof. Rob Fleming and his team of sustainable architects at Philadelphia University. Some of our outreach was just walking around the neighborhood, knocking on doors, talking to people. We also put up notices and posters, and sent an email to local officials - everyone from the township supervisors to the governor and our Senators. Pennsylvania Senator Bob Casey's office sent a representative.

Can you talk about the importance of aesthetics in gaining acceptance for this and similar projects?

The aesthetics of this project were heavily influenced by the location; the part of Kimberton we're in is zoned as a historical district, so we needed the approval of the historical commission. I think we ended up with a really attractive design. My business partner says, "a lot of green housing tends to look like a factory," which is true, you often get an industrial, postmodern look. There's nothing wrong with that, but our goal is to build green homes that look like the houses most people are used to living in. We want to make green housing mainstream, which means making it attractive to a wide range of home buyers.

Have you had to deal with any kind of zoning and permitting issues that might be different from an ordinary development?

Not really - the heat pumps require bore holes or wells, but that was no problem. There's a height limit of 35-foot in the zoning, and it's not clear if that applies to solar panels, but we don't expect that to be a problem either. We expect to be under that height limit even with the solar panels, but even if they go over, it should be not too hard to get a variance. The local officials have been supportive.

I know it can be hard to find builders to do some of the green building, because the materials and techniques are different from what they know. Have you had any problem with that?

That's true, a lot of homeowners who want to build green have to find a builder and architect and then basically educate them about green building. And a lot of builders tend to be pretty cautious about trying new things. They like to stick with what they know works.

We're fortunate in that we have the building know-how -- we have 35 years of construction experience in the company -- and we have experience with green materials. We've worked closely with the Environmental Home Store (www.environmentalhomestore.com), a local company which sells green building materials for interior finishes. And this project was essentially launched from an award-winning green home we built for ourselves. We did a lot of research for that project, really looking into some of the technology, like geothermal heat pumps.

So we think we have a pretty good understanding of the technologies, but we also know it's essential for us to find good partnerships. We're bringing in some of the top local people in things like environmentally-friendly storm water management and energy-efficient heating and cooling systems.

Another key partner who we'll work closely with is the company which is actually going to build the units. We're using modular construction, so they'll actually be built in a factory about a half hour from here, and then trucked to the site. That company is doing an increasing amount of green buildings, so we'll be able to work with them to make sure the building is highly-insulated and built using non-toxic materials.

There are also a lot of advantages to going modular by itself. Since you're building indoors, there's no job site theft or vandalism, and you get better quality because your homes are not exposed to the elements. You also reduce the amount of construction waste. In addition you can reduce the total construction time, because you can be building the units at the same time that the site prep is going on. Plus, once the units are built, installing them is a matter of a week or two, which is much easier on the neighbors. They don't have to put up with workers next door banging hammers and running saws for months.

I understand you have had interest and support from local officials and staff. What can local government people elsewhere do to encourage development like yours?

That's a really good question, which we don't have really have answers for yet. Local officials here have asked us for suggestions, too. They're very supportive, and they'd like to encourage more green development. They've already done a lot of good things, like strong storm water management regulations. That helps, for example, because we'll get full credit for our pervious paving when we figure how much of the lot we can build on. Some places only give you 40% credit for pervious pavement when they calculate how much of your lot is covered by buildings or pavement that don't let the rain through.

One way to approach it would be to look at LEED guidelines for things to promote. That could lead to ideas for how to make it easier to build green. We're also handing our government officials the Post Carbon Cities handbook for greening cities.

Were there any problems getting funding for this project due to current market conditions and non-standard techniques?

That remains to be seen - we're still in the funding stage. It does look promising, though. We have a couple of banks interested, including a new bank which is focused on lending to sustainable building projects, called E3 Bank. The banks will provide financing for the actual construction, but we have to finance the project until then. So right now we're looking to private investors to fund the project through the approval phase, when the banks will step in.

One thing that's clear is that there's demand for green housing. Half of our units have already been reserved, in the worst housing market in years. We could be affected by the downturn however, if the people who want to move into our units have trouble selling their houses. But that's still a year away, and who knows what the housing market will be like at that point.

What do you think the housing market will look like when things rebound? Will there be more green homes?

Oh absolutely. It's clear the industry is headed that way. Even more interesting, I think in the next five years you'll see a revolution of sorts in the construction industry. One thing that's going to happen is that you'll see the distinction between utilities and homebuilders blur. Think about it: what happens when you have local production of energy all over the place? When housing developments are producing more energy than they need from their rooftops?

Right now, the energy grid is sort of like a water pipeline, where the energy always flows in one direction. When there's as much energy produced locally as there is in central power plants, the grid evolves into something that looks like a cross between a giant battery, eBay and the Internet. It will serve to distribute energy not just in one direction, but in lots of directions. Energy will flow from where ever it can be produced least expensively to where ever it's needed the most.

You're beginning to see the early signs of this process. Already you've got developers like Clarum, in California, who are putting solar panels on every roof in their development. You've got places like Mosier Creek, on the Columbia river east of Portland, where they've basically formed a power company that owns the solar panels on the units' roofs and sells the energy to the homeowners.

The whole thing will get even more interesting with plug-in hybrids. With net metering and a sophisticated market system, your house could be automatically checking the price of electricity, and making decisions about whether to sell the excess solar energy from your roof to the office building next door for air conditioning, or put it in your car battery. In the middle of the afternoon on the hottest day in August, it may make more sense to sell that power and then buy cheaper power to charge your car late at night. As solar panels begin to take advantage of the advances in nanotechnology, the price of solar energy will drop dramatically, and everyone's going to become a power plant. So there are big changes coming for utilities and homebuilders, and we think we're positioned ahead of the curve.

[If this sounds far-fetched, take into consideration Boulder, Colo., where Xcel Energy is planning on creating the first "smart grid city" in the nation. Networked energy is fast approaching reality. -Ed.]