Cost of LEED Green Buildings

By William G. Reed

Although the database is still limited, there currently exist enough completed projects and experience to indicate cost trends in the realization of officially certified LEED™ projects.

The following qualifications need to be considered in any discussion of the “cost of green”:

  1. The cost of green buildings can only be compared when using an internally consistent framework, be it LEED™ or any other rating system.
  2. The EARLY incorporation of effective integrative design along with the WILLING participation of ALL members of the design team is essential to realize cost-effective, high performance, relatively sustainable green buildings.
    1. The word EARLY means EARLY.  Green issues need to be embraced as a basic part of the project programming phase.  If not part of the building program, then they should be included before schematic design begins.  Without great fortune, significantly more money will need to be spent achieving a LEED™ certification later, when a project is in its design development or construction documents phase.
    2. Effective integrated design means that the design team and client will explore all plausible program possibilities, design permutations, and optimizations of the many technical and natural systems engaged in the building, site and watershed.
    3. A willing attitude, much more so than experience, is essential from members of the design team in order to achieve the highest performing projects.  After several times, the experience will come.
    4. The word ALL means ALL.  The most successful integrative design process includes both the owner and contractor.  ALL participants in the design process should be willing to think outside the boundaries of conventional practice.

Costs

  1. It has been reported that LEED™ buildings cost 10-25% more than conventional construction.  While this may be true if the design team ignores the above points, the studies making these claims have literally added the cost of a variety of LEED™ credits without optimizing these issues as any good design team would do.  In general, such statistics should be ignored.
  2. There is no correlation between the cost of green buildings and the level of green achieved, whether Certified, Silver, Gold or Platinum projects.  A database currently being assembled by the U.S. Green Building Council (USGBC) of LEED™ Certified buildings contains the only statistically meaningful figures related to this issue.  It reveals some Certified projects being constructed at higher than estimated conventional budget costs, while, conversely, some Platinum buildings are shown coming in at conventional budget estimates.
  3. In general, given the current state of integrated design expertise, design teams are achieving LEED™ certifications at a cost 0-2.5% higher than conventional, initial budgets.  While these percentages are based on real numbers from a variety of projects, there is currently not enough input to consider these percentages statistically reliable.  Also, the ranges of possible credits achieved by projects vary, making an apples-to-apples comparison difficult until more buildings are certified.  Of course, significantly more will be spent if the desired credits cannot be optimized due to external conditions such as the cost of photovoltaic or grey water systems in areas where water rates and incentives do not support this level of efficiency.
  4. It is harder for large floor-plate buildings to achieve at-budget LEED™ Certification due to the difficulty of daylighting and cooling.
  5. The above comments relate only to initial costs, when we really should be discussing the life cycle cost of a project.  Unfortunately, this subject is usually not considered as a transition is made from buildings budgeted using design practices that are “one step better than breaking the law” (Randy Croxton) to higher performing ones.
  6. The design costs for LEED™ projects are higher than for conventional buildings and can increase even further related to the inexperience of the project team involved.  They are, however, very low in comparison to life-cycle benefits that can be achieved.  A summary of potential costs is as follows:
    1. Integrated design coaching (for inexperienced teams): $10 – $15k
    2. Energy modeling: $15 – $30k

    This is essential for any project and should not be considered an extra cost.  The goal of modeling is not simply to justify intuitive or conventional decisions locked in from the schematic design phase, but to be used as part of an iterative design process that tests many different strategies early in the design.

    1. Daylight modeling:  $(6) – $20k

    This is an optional process, dependent on the opportunities for natural light use in a building.  If done with an analogue, ¾” scale model, it can be inexpensive; if done with a computer simulation model, it will cost more; if photo-realistic renderings are needed to evaluate veiling reflections and contrast difficulties, the cost will be even further inflated.

    1. Moisture flow analysis: $1 – $3k

    This is an optional process, but one that can provide very inexpensive insurance so as to avoid mold-related issues in the structure.

    1. Materials research (for inexperienced teams):  $0 – $5k

    This component is basic to most design practices.  Charging for this research is fair if the client wishes to advance the state of the art, while it is recommended that the client and designer split the cost when the design team is new to the greening process.  Also, due to the transitional nature of the developing green marketplace, some level of continuous research is required.

    1. Spec editing for green issues (for inexperienced teams):  $1 – $4k
    2. Commissioning:  .3% – 1% of construction cost

    Again, this is essential for any project and should not be considered an extra cost.  Any building can benefit from the commissioning process, period.  The cost can vary depending on the complexity of the project and the level of testing already being performed by the owner.

    1. Construction partnering:  $25 – $30k

    Recommended, but not essential, for all projects.  This item concerns getting tradespeople to understand why and how different technologies need to be commenced in the field; it’s essentially all about reviewing specifications before subcontractors begin the actual work.

    1. LEED™ documentation:  $8 – $20k

    The earlier the documentation process is started, the less it will cost.  Design consultants should consider documentation as part of the design process, particularly as it’s minimally different than what they would have done anyway.  It is when work already designed must be reverse-engineered that costs increase.

An internationally recognized specialist in issues related to green design, William (Bill) Reed, AIA, LEED™ AP is vice president of the strategic environmental planning firm, Natural Logic.  He consults to and is a former board member of the U.S. Green Building Council and the national executive committee of the AIA Committee on the Environment.  Mr. Reed is involved in education and research on the subject of whole system (integrated) design, emphasizing beneficial alternatives to conventional design, construction and management of our environment.  He is committed to designing buildings and management systems that not only improve, but also regenerate natural environmental health, along with the social, economic and spiritual fabric of our communities.  

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