Green Spotlight on The Cost and Value of LEED® Certification

Cornerstone speaks with Alan Traugott

Q:  Why do soft costs attributable to LEED certification vary so much?

A:  Because the costs are dependent on the nature of the project, the experience of the team, the design approach, and the level of LEED certification under consideration.  The green building process requires additional effort on the part of all of those involved, including the owner, particularly in the early stages.  It requires more rigorous methods; extra meetings, decisions, and design/LEED certification documentation; computer models; and research into products and technologies.  The additional costs associated with a green design approach can be in the range of 10% to 20% of typical fees.  As project teams become more experienced and competitive, the expense of these services decreases.

Commissioning, which is required by LEED, is a process that includes design review and detailed system startup and procedure testing to ensure that the building performs as intended.  Its cost can range from 0.5% to 3% of the project, depending on the level undertaken and the structure’s size.  Typically, commissioning provides a payback between two to three years—and sometimes even several months—in utility cost savings and reduced startup and maintenance expenses.

A:  Overall, does it really cost more to build a green building?

Q:  While this is the common perception, it is not always the case and, as with the first answer, “it depends . . .”  Integrated design is the key to constructing a building that not only delivers environmental performance but also potentially maintains the same budget.  Such a process views the building as a “structure of architectural and engineering systems” that complement one another to achieve the best performance.  Unless green strategies are incorporated at the beginning of a project, they almost always results in additional first costs.  Higher expenses can also result from the fact that the building industry is in the early stages of learning about green.

On the flip side, there are considerably more green products available today than there were five to ten years ago.  These have been tested over time and there are increasingly more choices, which leads to more competitive pricing.  In addition, as more construction firms and contractors become experienced in green, extra costs for their expertise will decline.

Although it is not always possible to achieve—based on specific project circumstances—it should be among the goals of the team to develop a well-integrated design that achieves a LEED certification with an aggressive approach towards maintaining the bottom line.  In other words, incorporate as much “green” as possible into the project budget.  Cost estimates should be developed from the onset of the project and continually reviewed.  As a general rule—and again depending on the level of LEED certification being sought, the experience of the team, and the opportunity to do a really well-integrated design—construction costs for a green building should only be net zero to maybe five percent above traditional costs.

Q:  What is the economic argument for an owner to consider pursuing LEED certification?

A:  For an investment in additional design services—I already mentioned the relatively short payback period for commissioning—the owner should receive a better performing building, with reduced operating and maintenance costs over its lifetime.  The building should also provide greater long-term value in respect to its usefulness and, for its occupants, increased productivity and health benefits.  Most discussions about cost typically don’t include a definitive discourse on the corresponding benefits, which are usually thought of as anecdotal and hard to quantify.  There are currently multiple efforts underway to get hard data on savings related to reduced absenteeism and healthcare/insurance costs, employee turnover and recruitment.  There are existing studies showing a correlation between good daylighting and improved student test scores, patient recovery rates, and so on.  The two essential components for better productivity, health, and performance are good ventilation (and all that goes along with it, such as filtration, avoidance of pollutants, outdoor air quantity, ventilation effectiveness) and daylighting.

While also not easily measurable, the owner of a green building helps reduce negative environmental impacts.  As more and more such structures are built, infrastructure and social costs will be decreased.  For now, these investment returns represent environmental stewardship, good citizenship, and a significant public relations value.

Alan Traugott, a Green Building Alliance board member, is a principal with CJL Engineering.  Prior to moving to Pittsburgh, he worked for the global engineering firm Flack + Kurtz for 24 years, where he developed the computer energy and systems model for the 8.5-million-square-foot World Financial Center complex in New York City and led the development of the company’s green practice.  He is a founding member of the U.S. Green Building Council and was an advisor for the development of LEED, the New York State Green Building Tax Credit Bill, NYC’s High Performance Building Design Guidelines and the U.S. Department of Energy’s Sustainable Building Technical Manual.

No comments yet.

Leave a Reply