What are the Costs to LEED and Green Building?

In Davis Langdon’s 2007 study, they found that many people still continue to see sustainable design as a separate feature, which leads to the notion that green design is something that gets added to a project, which makes them think that there must be added costs.

Sustainable design shouldn’t be seen as an add-on to a building. Whether you are constructing a new building or renovating an existing one, sustainable design is just a combination of choices from a vast amount of building construction or operational options. Just as there are low-cost and high-cost non-green buildings, there are low-cost and high-cost green buildings.

When viewed like this, it’s no wonder why studies have found that there are no significant difference in cost between green buildings and conventional buildings.

This post will answer three questions on this topic: 1. What are the costs to building green? 2. What are the costs to LEED certification? 3. How much do you save on a green building?

What are the costs to building green?

The Davis Langdon’s 2007 study analyzed a total of 221 buildings. Eighty-three buildings were selected that were designed with a goal of meeting some level of the USGBC’s LEED certification. The other 138 projects were buildings of similar program types that did not have a goal of sustainable design. The cost per square foot was compared between all the projects.

Their findings were that the cost per square foot for buildings seeking LEED certification falls into the existing range of costs for buildings of similar program type.

A majority of the buildings studied were able to achieve LEED certification without any additional funding. Others that required additional funding were used for specific sustainable features, such as the installation of a photovoltaic system. With these specific sustainable features, initial costs may be high compared to conventional buildings, but it is more than compensated for over the lifetime of the building in financial returns such as savings in utility bills, increased property values, and increased employee productivity.

What are the costs to LEED certification?

There are initial registration and review fees involved in getting a building LEED certified (more information can be found at GBCI’s website). These are the fees currently posted on their site as of November 16, 2011.

For Existing Buildings:

	Project Gross Floor Area in Sq Ft (excluding all parking areas)			Expedited Review
	Less than 50,000	50,000- 500,000	More than 500,000
Initial Certification	Flat rate	Per Sq Ft	Flat rate
Registration
USGBC members	$900			N/A
Non-members	$1,200
Review
USGBC members	$1,500	$0.03/sf	$15,000	$10,000 surcharge
Non-members	$2,000	$0.04/sf	$20,000

For New Construction:

 

	Project Gross Floor Area in Sq Ft (excluding all parking areas)			Expedited Review
	Less than 50,000	50,000- 500,000	More than 500,000
Registration
USGBC members	$900			N/A
Non-members	$1,200
Standard Review	Flat rate	Per Sq Ft	Flat rate
Design & Construction Review
USGBC members	$2,250	$0.045/sf	$22,500	$10,000 surcharge
Non-members	$2,750	$0.055/sf	$27,500

Becoming a member also comes with its own fees. More information about that can be found on USGBC’s website.

Getting your building LEED certified does not have to be a large expense if you don’t want it to be. LEED is great in that way because it lets you choose which credits to pursue. This way you can avoid the big-ticket options and stay within your budget. If you are trying to achieve a LEED certification for your building, consider LEED for Existing Buildings: Operations and Maintenance (LEED EB O&M).

Green-buildings.com summarizes a study done by Leonardo Academy where they found that “The average cost per square foot to achieve LEED EB O&M was $1.61.” Among those surveyed,  the majority considered many of the LEED Prerequisites and LEED Credits to be “Low or No Cost”.

For example, some of the prerequisites for EB O&M involve putting up a sign showing the smoking policy of the building, or putting together a policy with your staff on sustainable practices of your building. Many of which can be done without much costs.

How much do you save on a green building?

With green buildings, there may be some high initial costs to such features as: photovoltaic installations, lighting retrofits, HVAC retrofits, or purchases of energy efficient office equipment. These features also come with short paybacks, savings on utility bills, lower operational and maintenance costs, and enhanced occupant health and productivity; all of which are quick returns on your investment.

Local rebates and incentives also help cut those high initial costs if your building qualifies. This means even more savings.

In Capital E’s 2003 report, it found that “minimal increases in upfront costs of about 2% to support green design would, on average, result in life cycle savings of 20% of total construction costs”. In other words, paying a little more now, means tremendous savings over your building’s lifetime.

To read more about the above studies on the financials of green building click on the following:

Davis Langdon’s “The Cost of Green Revisited”

Capital E’s “The Costs and Financial Benefits of Green Buildings”