The True Cost of LEED-Certified Green Buildings

Editor's note: The following is Part 3 of a three-part series.

Many industry professionals believe that seeking Leadership in Energy and Environmental Design (LEED) certification will put an additional financial burden on new and existing/remodeled buildings. Let's take a closer look at what goes into the cost of a LEED design:

• Possibly higher energy use (See Part 1 of this series, “Green Buildings and Energy Efficiency,” November 2010.);

• LEED certification fees;

• Construction-related expenses for architects, engineers, LEED advisors, etc.;

• Site clearing and debris separation/disposal;

• Green materials and equipment;

• Post-construction monitoring/environmental-control systems;

• Higher operating expenses.

LEED Certification Fees

According to recently filed court documents, the minimum cost of LEED certification is $2,900 for a new building under 50,000 sq ft.¹ LEED certification fees for a newly constructed building over 500,000 sq ft amount to $20,000 (plus a $900 initial registration fee). In California, certification of a new hospital exceeded $1 million. A 1.2-million-sq-ft mixed-use office building with a $400 million budget estimated the cost of LEED certification is “only 0.27 percent of the total cost,” which represents an additional $1.08 million.

Construction-Related Expenses

Construction-related expenses for LEED-certified buildings can increase a project's cost by about 10 to 30 percent. LEED certification alone can account for 5 to 15 percent of the total construction costs, not including funds required for other mandated expenses.

Architects and engineers usually demand higher fees for green designs. Green designers add value to the end product and provide extra services. A green-design professional typically charges 1 to 2 percent more for a LEED-certified building design.

These figures do not include the rates of a LEED Accredited Professional (which can increase design fees by 10 to 15 percent), LEED-certification application fees, or the costs associated with monitoring and reporting building performance.

Site Clearing and Debris Separation

In the early phases of the “green revolution,” contractors voiced their concerns about spending excessive amounts of money and wasting time on carefully picking and separating various materials that result from the demolition of older buildings. Having separate containers for brick, drywall, steel, wood, etc. was a job killer. The disposal of some recovered material, such as steel and copper, might have been financially advantageous, but most separated materials were dumped into the same landfill.

Green Materials and Equipment

The cost of green-certified materials can become an issue when LEED design guidelines favor one material source over another. Building Design+Construction discussed wood certification in its March 2010 issue.² According to the magazine, the U.S. Green Building Council (USGBC) only accepts wood when it comes from forests certified by the Forest Stewardship Council (FSC). The problem is 82 percent of FSC forests are outside of the United States and Canada. The USGBC apparently did not consider the cost of delivering certified wood thousands of miles from outside of the United States. Similar issues would arise if, for example, one drywall manufacturer or one steel supplier became a “designated green supplier.”

USGBC green-design guidelines delineate systems and equipment considered to be green, such as tankless (instantaneous) water heaters. A gas heater's overall energy efficiency ranges from 25 to 30 percent, as opposed to the 92- to 95-percent thermal efficiencies of storage-tank-type water heaters. Electric water heaters theoretically are 100-percent efficient at the point of use.

However, electric energy typically is delivered to the point of use at an overall efficiency of approximately 30 percent. (A 3-gpm instantaneous water heater with a 70°F rise requires a 32-kw heating element.) The costs of larger electric feeders, switchgear, and internal wiring must be considered. However, USGBC guidelines do not even mention overall system efficiency as a criterion for awarding extra points. The result is that final designs frequently receive points for non-economical designs.

Post-Construction Monitoring

To comply with the monitoring and reporting post-construction performance data required for LEED certification, a building's mechanical, electrical, and plumbing systems must have a sophisticated data-collection/evaluation system installed. Small- to medium-size buildings traditionally do not specify, install, and maintain that kind of equipment. This one item could add up to several thousands of dollars worth of computer hardware, software, and sensors. Larger buildings normally are prepared to include complex data-recording/reporting systems, somewhat reducing the additional-cost impact. Also, larger buildings normally have skilled operators on staff, while small- and medium-size buildings might not.

Post-construction monitoring costs typically are recurring. Data collection and complex submittal calculations need to be repeated annually for every building.

Conclusion

Parts 1, 2, and 3 of this series are full of pro and con arguments about green designs. It is almost impossible to keep up to date on new developments on a daily — or even weekly — basis. Other issues about the effects and impacts of going green not mentioned in these columns are equally important and will play a significant part in the overall operating costs and energy efficiency of buildings.

References

1. Henry Gifford, Gifford Fuel Savings Inc. vs. U.S. Green Building Council, David Gottfield, Richard Fedrizzi, Rob Watson, Jane Doe, John Doe, et al., 10 Civ 7747 (2010).

2. Cassidy, R. (2010, March). End the battle of FSC vs. SFI wood in LEED. Building Design+Construction. Retrieved from http://www.bdcnetwork.com/article/end-battle-fsc-vs-sfi-wood-leed

Stephen J. Vamosi, PE, is principal and chief executive officer of Intertech Design Services (www.intertechdesign.net), an architecture and engineering firm specializing in the design of commercial, medical, educational, and retail buildings. He also is a professor emeritus for the University of Cincinnati and a member of ASHRAE.