Some luxury homeowners have built homes where they are their own power company. Derek Ferguson is at home in the Costa Rican rainforest; Michael Funk has no air conditioning in the Sierra foothills. Photo: Lisa Corson for The Wall Street Journal.
Derek Ferguson's 18,000-square-foot modernist home, tucked into a rainforest-covered hillside in Costa Rica, has an infinity pool, an airy modern kitchen and floor-to-ceiling windows overlooking a Pacific bay. From his house, which he shares with his fiancée, he sees no neighbors, though he can easily spot breaching humpback whales, four types of monkeys and scarlet macaws, among the many species inhabiting the intensely biodiverse Osa Peninsula.
The price of Mr. Ferguson's luxurious lifestyle in such a remote location is being his own power company: He produces all his own electricity through solar panels and gets water from a well connected to a spring. Due to its remoteness, it took 10 years to design and build the house, completed six years ago for roughly $3.5 million. Mr. Ferguson owns the house with his brother, who visits occasionally, he said. Workers built a camp on site where 25 of them lived on and off for 3½ years, said Mr. Ferguson, who once spent two weeks in the hospital after being bitten by a pit viper on the property. Eric Gartner of New York-based SPG Architects, the design architect on the project, said he twice found scorpions in his shoes while working at the site.

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Laura Gurdian Heinsohn and Derek Ferguson are pictured in the living room of their home, Casa Torcida, on the Osa Peninsula in southwestern Costa Rica. Lisa Corson for The Wall Street Journal
It is all worth it, Mr. Ferguson said.
"I've traveled all over the world, and I've never even seen such a magical place," said Mr. Ferguson, 43, who owned a music studio in New York but today makes his living as an investor and farmer. "It was a chance to create my own sustainable haven, where I don't have to rely on the government. I create my own power, my own water, my own food," he said.
Off-the-grid houses, which are untethered to local utility systems, are a niche of the growing green single-family home market, a $37 billion industry last year, up from $6 billion in 2005, according to estimates by the National Association of Home Builders.
While green building techniques often involve give and take—sometimes homeowners feed their excess solar energy to power companies and pull electricity when needed—off-grid homes eschew the utilities altogether. They are usually built in remote places where it is impossible or expensive to connect to municipal systems. In some cases, owners make a deliberate choice to be off-grid, attracted by no utility bills, no power outages and a sense of independence.
The concept of ultraluxurious, off-the-grid houses is new enough to baffle some home seekers. Two years ago, Kimberly Strub, a real-estate agent at Coldwell Banker Previews International in Marin County, Calif., listed a 6,200-square-foot, off-grid home on 10 acres in Northern Marin County, a commuter area to San Francisco, for $1.725 million. The house, which had solar panels over 15 years old, needed technological upgrades. Ms. Strub said she overheard people touring the house murmuring about whether they could hook the house up to local utilities, and wondering how much it would cost and how to go about replacing the solar panels.For Mr. Ferguson, building his home off the grid was a way of discouraging development in the rustic region. "I didn't want to be the guy who messed it up with power," he said.
"Mostly people were unfamiliar with it, and I think people are afraid of what they are unfamiliar with," said Ms. Strub. The property, currently listed for $1.25 million, is now in contract with developer Jim Hammett, who said he would pay less than the list price but declined to say by how much. He plans to spend $450,000 to refurbish the house, both cosmetically and technologically, and relist it in the fall at $2.45 million.
"We had the choice to go on the grid or stay off the grid," said Mr. Hammett, a senior project manager at Plumb Property Solutions, based in Santa Rosa. "We felt there were more advantages to being off the grid. A major factor is that people here like to reduce their carbon footprint."
One reason off-the-grid has rarely been associated with luxury: Homeowners often have to give up some amenities to be able to power their homes independently. Size is a typical sacrifice, because the larger a house, the more solar panels and batteries it needs, adding to building costs. Mitch Weiner, a Colorado real-estate agent and builder, has built six off-the-grid vacation houses in the past 3½ years, all between 300 and 1,400 square feet, for example.
“I create my own power, my own water, my own food.”
—Derek Ferguson, homeowner in Costa Rica
As off-grid technology gets cheaper, however, larger homes are becoming more accessible: The average price per watt of a residential solar-power system has dropped 43% since 2010, according to the Solar Energies Industry Association, an industry trade group. Federal and state tax credits can reduce the cost more.
Another common sacrifice: air conditioning. Michael Funk, co-founder of a large organic-foods distributor, built a 6,500-square-foot, four-bedroom, 4½-bath house on 1,400 acres in the Sierra foothills, about a 15-minute drive from Nevada City, Calif. His home, where he lives full time with his wife and two children, has its own fruit orchard, a root cellar and sweeping views of the Yuba River, but it doesn't have air conditioning.
Instead, architect Jeff Gold used tinted glass and large overhangs to keep the sun from overheating the house. The bottom story of the home is built into the ground, keeping it cool, Mr. Funk said. By opening windows at night and shutting them in the morning, the house remains between 70 and 75 degrees, even when it is in the mid-90s outside, Mr. Funk said. He declined to say how much he paid to build the house. Nevada City-based architect Charles Durrett, who specializes in sustainable building techniques, estimated the cost to build a similar house today at around $2 million.
Off-grid homeowners say modern systems are so automatic they don't require much maintenance or technical know-how. But, "being my own power company" has added a dimension to homeownership, Mr. Funk said.
"There is certainly a learning curve. When people come over, we roll our eyes when they walk out of a room and don't turn the lights off," said Mr. Funk. The house gets most of its power from solar panels, and on a few rainy days a year, from a micro hydropower system powered by rainfall. There is a backup generator, but Mr. Funk said he has hardly used it after the first year, when the family was still adjusting. As a bonus, power goes out in the area two to four times a year due to snowstorms, while "we never have our power out," Mr. Funk said.
For insurance companies, houses in remote locations pose a bevy of risks, said Stephen Bitterman, vice president of a high-net-worth division of AIG Property Casualty. "Anything over 10 miles from the closest fire department is considered extreme risk" and requires a personalized firefighting plan, Mr. Bitterman said. Mr. Funk has 12,000 gallons of water in a concrete tank buried about 200 feet above the house on a hillside, and a hydrant and hose.
Another challenge for some off-gridders is building roads to their remote properties. Susan and Ken Crawford, who will complete a 3,800-square-foot, off-grid house an hour north of Santa Fe, N.M., this fall, said it took seven years to obtain permission from the U.S. Bureau of Land Management to build a 1.3-mile access road to their property across federal land. Environmental and archaeological studies plus construction added up to $550,000 just for the road alone, said Ms. Crawford, a 61-year-old attorney. The couple lives in Santa Fe, but plans to move part time to the property when the house is completed.
As the house comes together—it will feature a two-story "kiva" central room, honoring the local American Indian architectural style—the hassles, hardships and roughly $2 million total investment in the project seem worth it, Mr. Crawford said.
"We're an hour from Santa Fe, and 24 miles south of Taos," said Mr. Crawford, 60, who said that after a career as an international tax accountant living around the world, he is in some ways recreating his youth on an Arizona ranch. "But all you see from the property is mountains. You don't see houses or towns or roads."
Write to Katy McLaughlin at katy.mclaughlin@wsj.com