Blue is the New Green:An Economic Analysis

of Water/Energy-Friendly Building

By Margo Farnsworth, Senior Research Consultant, Cumberland River Compact and Jeff Gowdy, Economist

Water Challenges: Siltation, our #1 pollutant

Water supply

Growth & competing interests

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The Cumberland River Compact is a nonconfrontational education organization

Working to enhance water quality in the Cumberland River and its tributaries through education and by g ypromoting cooperation among citizens, businesses and agencies in Kentucky and Tennessee.

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Watersheds Program

• Stakeholder Process• 7 of 14 Subwatershed7 of 14 Subwatershed

organizations established • Cumberland Basin Council

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To enhance and restore the small streams of the Mid-Cumberland watershed through community-

basededucation and restoration projects

Rain barrels to i d

education and restoration projects.

Green

Infrastructure

rain gardens

Infrastructure

Restoration & water education

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The bottom line of Green is Black!

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Local Officials CurriculumLocal Officials Curriculum

Educates/works with local officials, employees & Educates/works with local officials, employees & communities on enhancing water quality through direct communities on enhancing water quality through direct

action and creating supportive policiesaction and creating supportive policiesaction and creating supportive policiesaction and creating supportive policies

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“BOB’s” Goals: To enhance water “BOB’s” Goals: To enhance water quality by:quality by:q y yq y y

--Working with developersWorking with developers

--Demonstrating sustainable building Demonstrating sustainable building designdesigndesign design

--Improving land use practicesImproving land use practicesImproving land use practicesImproving land use practices

--Implementing stream rehabilitation Implementing stream rehabilitation projectsprojects

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Building Outside the Box Program

What would a “win” look like? .

• Protect water quality & supply• Protect water quality & supply

• Create healthy living conditions

• Be economically productive

• Be scalable

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To protect water quality & supply Mimic natural hydrologyMimic natural hydrology

•To lessen negative effects of flood/drought cycleg g y•To maximize filtration of stormwater•To maximize infiltration of stormwaterTo maximize infiltration of stormwater•To maximize aesthetics•To save/make yourselfTo save/make yourself and/or your clients money.

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Don’t Build a Smart House on a Dumb Site

Bio-Retention Option

To create healthy living conditions

Pay attention to air qualityto air quality & reduce stormwater runoff

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To be economically productive

Allow for the Continuum of Care©

Various local programs

EarthCraft NAHB LEED Water SenseEnergyStar

RestorativePractices

Individual cutting edge technologies andIndividual cutting edge technologies and techniques can be inserted all along the Continuum

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Morgan Park Place Economic Analysis

•Effect on water quality & efficiency/supply•Economic impacts

40 U it•40 Units

•Standard Vs. Sustainable

•Occupancy ≈ 2 people

•Water price per gallon at the•Water price per gallon at the time of the study $0.0025

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Eight Activities were analyzed:

1 Irrigation Systems1. Irrigation Systems

2.Landscaping & Water Runoff Control

3.Sediment Control

4 Stormwater Control4.Stormwater Control

5.Kitchen Equipment

6.Laundry Equipment

7 Plumbing (Water Heater)7.Plumbing (Water Heater)

8.Efficient Energy Sources (Higher SEER HVAC)

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Six-Step Process

• Initial questionnaire• Follow up for additional contacts• Outside research on industry and government

standards and statistics• Comparisons between “standard” and “sustainable”

practices• Calculating pay-back rates• Seeking peer review by professionals in the

d l b idevelopment business

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Drip Irrigation With Rain & Moisture Sensors

•Price Premium: $5 994 $4 800 t t l $29 85 it$5,994 - $4,800 total or $29.85 per unit

•Cost Savings per unit: $1,277.87 total or $31.95 per yr after 0.9 years

•Water Savings: (for consumptive use)511,146 gallons per year

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Water Runoff/Landscaping Controls

• Price Premium:$82,000 – 75,440 total or $164.00 per unit

• Cost Savings per unit:$1,095 total or $27.38 per unit after 6 years

• Water Savings (for consumptive use)438,000 gallons per year (+ 0 synthetic runoff) , g p y ( y )

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Kitchen Equipment• Price Premium:• Price Premium:

$36,080 - 28,800 total or $182.00 per unit

• Cost Savings per unit:$16 97 electricit / ater total per nit after$16.97 electricity/water total per unit after

10.7 years

• Water Savings from ↓ energy = 111,000 gallonsW t S i f ↓ t 17 200 llWater Savings from ↓ water = 17,200 gallonsTotal Water savings = 128,200 gallons per year

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Efficient Energy Sources

• Price Premium:$24,000 difference or $600.00 per unit

• Cost Savings per unit:$6,840 total or $171.00 per unit after 4 years

• Water Savings (for non-consumptive use)438,000 gallons, g

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No. Aspect Uniqueness Standard Choice Onsite Cost Standard Cost

Premium Paid

Payback Period

Cost Savings after Payback

Period

Water Supply Savings

(gals/year)

Water Quality Gains

(gals/year)

1 I i ti S t D i b d B d t S t $5 994 $4 800 $1 194 0 9 $ 31 95 511 146 N1 Irrigation System Drip-based Broadcast System $5,994 $4,800 $1,194 0.9 years $ 31.95 per year per condo

511,146 None

2 Erosion Control Vegetation and Landscaping

Rocks & debris remain, no compost,

no compost teas

$82,000 $75,440 $6,560 6 years $27.38 per year per condo

438,000 Zero synthetic Fertilizer

runoff

3 Sediment Control Full Compliance (proper

installation)

Potential Non-Compliance (from

improper installation)

$4,800 $7,225 ($2,425) N/a ($60.63 decrease in purchase

price)

None N/a

4 Stormwater Control

Rain Gardens, Gravel Pits,

Detention Ponds $19,300 $21,987 ($2,687) N/a ($67.18 cost decrease in

None 80-90% reduction in

Pervious Pavement

purchase price) silt particulate runoff

5 Profile Dishwashers Energy Efficiency

Not Energy Efficient $902/unit $720/unit $7,280 10.7 years $16.97 per year per condo

128,200 None

6 Frontload Washing Water and Topload Washing $899/unit $300/unit $23,960 12 years $74.92 per year 703,400 None6 Frontload Washing machines

Water and Energy

Efficiency

Topload Washing machines

$899/unit $300/unit $23,960 12 years $74.92 per year per condo

703,400 None

7 Tankless On Demand Water

Heather

Energy Efficiency

Electric Water Heather

$875/unit $380/unit $ 19,800 6.4 years $76.80 per year per condo

622,620 None

8 Higher SEER HVAC SEER 16 rating SEER 13 rating N/a N/a $24,000 3.5 years $171 per year per condo

551,000 None

Totals: $77,682 4.87 years Dependent upon year

2,954,366

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Net Return for Consumer after 20 years = $5,285

Payback on Investment

$8,000

gs

$5,000

$6,000

$7,000

ost S

avin

g

Premium Paid

$2,000

$3,000

$4,000

miu

m v

. Co Premium Paid

Total Cost Savings

$0

$1,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Year

Prem

Year

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LID Economics

At Morgan Park Place . . .• Premium paid was passed on

B ’ thl h fl t i di t l• Buyers’ monthly cash flow went up immediately• Water and energy savings were immediate

P b k ft 4 87 > $399 ll• Payback after 4.87 years -> $399 annually• LID = Sales for developers

The site will conserve over 2.9 million gallons of water… and the gdirt stayed in-state which makes everybody happy!

24Source: National Geographic

Thank you to Jeff Gowdy, EPA, Lawrence Brothers LLC, WWF TVA and all our partners!WWF, TVA and all our partners!

References available at:References available at: http://www.cumberlandrivercompact.org/events_news.shtml

For more information:Margo Farnsworth, Senior Research ConsultantMargo Farnsworth, Senior Research Consultant

Cumberland River Compact(615) 382-4443 (direct)

www.cumberlandrivercompact.org

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