GREEN BLOG

Green Design Costs More...Or Does It?

There could hardly be a more important question or one more difficult. The answer is, of course—it depends. Determining the relative cost of any project is challenging but when the variables of green design are thrown in, the quandary becomes more pronounced. The environmental commitment of the client, the knowledge and experience of the design team, the extent of the greening, the manner in which the project is funded and any available incentives and rebates will all help establish final costs.
A savvy client, especially one who initiates green design goals, is the best guarantee that a project will end up the darkest possible shade of green, but it won’t necessarily lower the costs of going green. In fact, a gung-ho client may be so intent on achieving a gold or platinum LEED certification, for example, that no expense is spared. However, a strong commitment can also be used to economic advantage by producing better performance at less cost by assuring that cuts made during value engineering do not jeopardize the greenness of the project.
It is generally accepted that the greener the building, the higher the amount of the “green premium” will be—the additional costs incurred over those of a conventional building. In interiors projects, higher costs may be incurred for strategies such as replacing inefficient HVAC systems, retrofitting to high-efficiency plumbing fixtures, installing lighting controls and occupancy sensors, and utilizing shading devices to control heat gain and glare. Some studies estimate the premium to range from zero to more than 20 percent; however, it must be emphasized that these figures represent first costs. When the life cycle cost of a project is calculated, the green strategies listed above will actually conserve money in the long run through operational savings. First costs are often recouped within the first few years.
Government incentives can play a huge part in the final costs of a green project, especially in the more progressive states. Using state grant and tax credit incentives plus reduced city development charges, a hotel project in Portland, OR was able to reduce its green premium costs of $470,000 by nearly $371,000. Coupled with reduced utility costs, the property’s pay back period to cover the premium was 18 months.
However, herein lies one of the economic conundrums of green buildings. Often, construction budgets, which include all of the first costs, are held apart from the operations budgets in which the life cycle savings occur. This disconnect has played a large part in the public’s conception of the greater expense of building green. As the green building movement edges closer to more clearly defining and embracing life cycle costing, the perceptions and the realities of the cost of green should change.
Let’s hope.

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