The Cost-Effectiveness of Building Green

Looking beyond initial costs to the true cost of green-building ownership

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“The financial savings are about $70 per square foot, 20 times as high as the cost of going green (Table 2),” the study says. “Only a portion of these savings accrue directly to the school. Lower energy and water costs, improved teacher retention, and lowered health costs save green schools directly about $12 per square foot, about four times the additional cost of going green. For an average conventional school, building green would save enough money to pay for an additional full-time teacher. Financial savings to the broader community are significantly larger and include reduced cost of public infrastructure, lower air and water pollution, and a better-educated and compensated workforce.”

REFERENCES

  1. BD+C. (2007). Green buildings research white paper. Available at http://www.loginandlearn.com/course/overview.php?courseid=647

  2. Matthiessen, L.F., & Morris, P. (2007). The cost of green revisited. Available at http://www.davislangdon.com/USA/Research/ResearchFinder/2007-The-Cost-of-Green-Revisited/

  3. Kats, G. (2003). The costs and financial benefits of green buildings. Available at http://www.ciwmb.ca.gov/greenbuilding/design/costbenefit/report.pdf

  4. GSA. (2004). LEED cost study. Washington, DC: U.S. General Services Administration. Available at http://www.ecy.wa.gov/programs/swfa/greenbuilding/pdf/gsaleed.pdf

  5. EERE. (n.d.). Net-zero energy commercial building initiative. Available at http://www1.eere.energy.gov/buildings/commercial_initiative/whole_building.html

  6. AIA/AIA CC. (2007). Integrated project delivery: A guide. Washington, DC: The American Institute of Architects. Available at http://www.aia.org/contractdocs/AIAS077630

  7. Mills, E., et al. (2004). The cost-effectiveness of commercial-buildings commissioning. Berkeley, CA: Lawrence Berkeley National Laboratory. Available at http://eetd.lbl.gov/Emills/PUBS/PDF/Cx-Costs-Benefits.pdf

  8. BD&C. (2007). Life cycle assessment and sustainability white paper 2005. Available at http://www.bdcnetwork.com/article/CA6283728.html?industryid=42784

  9. Kats, G. (2006). Greening America's schools: Costs and benefits. Washington, DC: Capital E. Available at http://www.cap-e.com/ewebeditpro/items/O59F9819.pdf

James D. Qualk, LEED AP, is a vice president of SSRCx LLC, the commissioning subsidiary of Smith Seckman Reid Inc. As leader of the firm's Sustainable Solutions Group, he manages operations and directs the marketing and sale of services that include Leadership in Energy and Environmental Design (LEED) Green Building Rating System facilitation, LEED feasibility analysis, energy modeling, and commissioning. Paul McCown, PE, CEM, LEED AP, CxA, is a consulting engineer with the Sustainable Solutions Group, providing LEED-facilitation, retrocommissioning, and energy-analysis services.

Collaboration Is Key

Traditionally, when an owner embarks on a building project, he or she hires an architect and perhaps a construction-management firm. Before “specialty consultants” are hired, the facility is programmed and design decisions are made. With such limited input, the ability to integrate design elements is diminished severely.

Particularly when sustainability is a priority and Leadership in Energy and Environmental Design certification a project goal, all stakeholders must be engaged as early in a project as possible. According to the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE), these can include “architects, engineers, building occupants and owners, and specialists in areas such as indoor-air quality, materials, and energy use.”

The path to a high-performance commercial building is a process called “whole-building design,” which the EERE defines as design that “considers all components and subsystems during the initial design phase.”5

Whole-building design “integrates all the subsystems and parts of the building to work together,” the EERE says. “Because all the pieces must fit together, it is essential that the design team be fully integrated from the beginning of the process.”

In 2007, The American Institute of Architects (AIA) introduced an approach called “integrated project delivery” (IPD).6 According to the AIA, IPD “integrates people, systems, business structures, and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction.” The AIA further explains that: “IPD teams can include members well beyond the basic triad of owner, architect, and contractor. In all cases, integrated projects are uniquely distinguished by highly effective collaboration among the owner, the prime designer, and the prime constructor, commencing at early design and continuing through to project handover.”

The ‘Triple Bottom Line’

Inherent in high-performance buildings are financial prosperity for the owner, occupant satisfaction, and environmental conservation, which often are referred to as the “triple bottom line.”

Triple-bottom-line benefits are either quantitative or qualitative.

Quantitative

Quantitative benefits are objective in nature. They can be measured directly and reproduced independently across all project types and locations. Studies usually can stand on their own merit without comparison.

The most common example of a quantitative benefit is money saved through energy efficiency. Other examples include water savings, decreased maintenance, longer component/system life, lower insurance premiums, tax benefits, and reduced tipping fees. Qualitative. Qualitative benefits are subjective in nature. They can be measured directly or deduced indirectly and must be qualified on a case-by-case basis. Studies usually must be grouped for validity to be established.

The most common example of a qualitative benefit is assurance building systems are designed and installed according to project intent. This is gained through commissioning, the scope and fee of which vary greatly by building type. For existing buildings, a 2004 study7 found median commissioning costs of 27 cents per square foot, whole-building energy savings of 15 percent, and payback times of 0.7 year; for new construction, median commissioning costs were $1 per square foot (0.6 percent of total construction costs), yielding a median payback of 4.8 years (excluding quantified non-energy impacts).

Other qualitative benefits include the ability to charge more for rent, fewer vacancies, less turnover, higher employee productivity, better retail sales, reduced hospital stays, less susceptibility to building-born illnesses, and better overall occupant health.


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