Green Building Saves the Green Cost Benefits of Green Buildings

The environmental benefits of "green" buildings have never been questioned. The reduced intake of resources and the reduced output of waste accomplished through environmentally sensitive building reduce the negative environment impact of a building. Although the environmental benefits of green buildings are clear, how to afford a more environmentally sustainable living environment is not. Cost is a frequent excuse against building green. While it is true that the initial cost of green building can be more - an extra $3 to $5 per square foot, by some estimates - the life cycle cost of a green building is significantly less.

Life cycle cost analysis looks at the cost of a material over its entire lifespan, from production to disposal. In terms of green building, it is used to analyze the potential savings over the life of the building - usually about 20 years - instead of simply focusing on the upfront cost. This sort of analysis provides a larger scope for study and gives a more complete picture of the cost benefits of green building. The California Sustainable Task Force ("CSTF") recently determined that the savings resulting from green building can be ten times that of the initial extra cost of the environmentally-conscious materials and methods. This means that in as little as two years that initial $3 to $5 per square foot green investment can be recouped, and there will only be net savings from then on.

According to the CSTF study, a LEED certified building could have a net savings of between $48 per square foot and $75 per square foot over the 20-year period. LEED, which stands for Leadership in Energy and Environmental Design, is a building rating system developed by United States Green Building Council. This is a significant savings, especially when applied to any large scale building project.

Does Your Building Rate?

Energy conservation, one of the 5 components that the LEED rating is based, alone can more than pay for the upfront costs of green building over the life cycle of the building. Green buildings are on average 25-30 percent more energy efficient than standard buildings, according to the CSTF study. A 30 percent reduction to energy consumption can result in a $.30 per square foot per year savings or over $5 per square foot (Net Present Value) over a 20-year period. For a 1,000-square-foot apartment, this means a savings of $300 a year and $5,000 NPV over a 20-year period.

Other potential savings are linked to water conservation, reduced waste, and lower maintenance and replacement costs, which can add up to about another $10 per square foot savings over 20 years. In addition, the most financially beneficial and currently most difficult value to gauge is the increased productivity and improved health resulting from green building. These estimated savings are usually based on commercial offices, but the health benefits are applicable to residential structures, as well. For offices, the CSTF study found a savings of between $36 per square foot and $55 per square foot over a 20-year period due to increased worker productivity and less sick days, taking into account lost man-hours and insurance premiums. Contributing factors include more natural lighting and better indoor air quality from improved ventilation and the use of low or non-toxic materials. Less toxic alternatives for carpets, paints, varnishes and adhesives are readily available.

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