Editor's Note: To learn more about the financial implications of LEED buildings, be sure to check out VERGE@Greenbuild, November 12-13.
Owners considering LEED certification for their buildings often ask what level of financial return they can expect for their investment in green products and services.
This starts with a measurement of costs. Owners should be certain their LEED consultant is able to audit their buildings and accurately calculate the cost of obtaining various levels of LEED, including both the implementation of improvements and the cost of the certification process itself.
Estimating the financial gain is a trickier process, as market variables and qualitative benefits enter the equation. But the challenge of calculating return on investment (ROI) is lessened somewhat by the steady stream of reports analyzing the cost of LEED in new and existing buildings -- and the financial payback.
The cost of LEED
The most commonly cited studies on the incremental cost of LEED come from international construction company Davis Langdon, which compared fit-outs and renovations in LEED and non-LEED buildings. Overall, fit-outs and renovations of LEED-certified buildings carried a premium of 1.84 percent, or slightly more than $18,400 per $1 million of construction cost. The incremental cost averaged 2.11 percent in LEED Silver buildings, and just 1.82 percent in LEED Gold buildings.
Why would Silver certification cost more than Gold? Davis Langdon theorized that some owners pursuing Silver certification may have implemented expensive technology, while those reaching for Gold may have taken greater advantage of passive design opportunities.
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Measure the ROI, help us make
Measure the ROI, help us make the work more efficiency!
We built a Net Zero Estate,
We built a Net Zero Estate, awaiting Leed Platinum certification. We intend to prove you can achieve building a large estate while being green. Solar, Geo-Thermal, rain water recovery system, LED lighting, computer control everything......and many more. We lost many points by not being near a bus stop or in an urban setting.....etc. Otherwise, would surpass platinum. This is not a project for all home builders, however, all the mega mansions must be remodeled and rebuild at some point. We hope to inspire those home owners……
We built a Net Zero Estate,
We built a Net Zero Estate, awaiting Leed Platinum certification. We intend to prove you can achieve building a large estate while being green. Solar, Geo-Thermal, rain water recovery system, LED lighting, computer control everything......and many more. We lost many points by not being near a bus stop or in an urban setting.....etc. Otherwise, would surpass platinum. This is not a project for all home builders, however, all the mega mansions must be remodeled and rebuild at some point. We hope to inspire those home owners……
Some of the data he is
Some of the data he is referring to is in the 2011 Green Building Market and Impact Report http://www.greenbiz.com/research/report/2011/11/07/green-building-market...
The CoStar group did a study a few years back on real estate values of green building which compared rents and selling prices of regular, Energy Star and LEED Certified buildings.
http://www.costar.com/uploadedFiles/Partners/CoStar-Green-Study.pdf
In 2003 the Capital E Group published a study on green buildings owned by California which breaks down the ROI of green building. When it came out the findings surprised people. It is available on the USGBC web site http://www.usgbc.org/Docs/News/News477.pdf
I second Karla's comment -
I second Karla's comment - references to the published studies would be very valuable.
Thanks for this article - any
Thanks for this article - any chance you could link to the studies you reference? I'd really appreciate it. It's always helpful to know the details including building type covered, year study completed, etc.
The lower price of building
The lower price of building LEED Gold versus LEED Silver has to do with the synergies involved in integrated design. Raising the cost of insulation is inexpensive, and leads to savings in HVAC costs which are expensive. Similarly solar shading on the south side is not cheap, but the savings in HVAC equipment and operation costs more than pay back the investment.