The Cost Implications of LEED

A Presentation By

Hanscomb Faithful & GouldSeptember 29th – 2005

Ms. Carin Rautenbach – Vice President, LEED APMs. Minna Gerard – Senior Estimator, LEED AP

John Merkler AIA

Our presentation today Understanding Cost Constraints

Where the data comes from Life Cycle vs First Cost

LEED Point Analysis

Sharing our Lessons Learned

Questions and Answers

Sharing Best Practices from Audience Members

What is the Cost of Green Building?

1. Initial Cost, i.e. Construction Cost

2. Life Cycle Cost, which covers not

only construction cost but also

operation and maintenance cost

during the building’s usable life.

LEED Project Locations

Where does the data come from?

Hanscomb Faithful & Gould’s

nationwide database

GSA’s database of recent work

State of California Study – 2003

Supplemental data

LEED Rating System Four (4) levels of Certification

LEED Certified 26 - 32 points

Silver Level 33 - 38 points

Gold Level 39 - 51 points

Platinum Level 52+ points (69

possible)

LEED Rating System

Major Categories Prerequisites

Maximum Points

Sustainable sites 1 14

Water Efficiency 5

Energy and Atmosphere 3 17

Material and Resources 1 13

Indoor Environmental Quality 2 15

Innovation and Design Process 5

Attainable Points Distribution

Life Cycle Cost Saving for LEED Projects

Energy & Lighting Efficiency

Water Efficiency

Materials Efficiency

Employee Productivity

Employee Health

Construction & Debris Recycling

Sensitivity to Life Cycle Cost

Energy

(2%)

Educational Staffing (31%)

Support Staffing (11%)

Furnishings / Fitout (4%)Fees (1%)

Construction Contingency

1%Other Project Costs

School Allotment (1%)

Textbooks

(1%)

Benefits Overhead (14%)

Other Support Costs (2%)

Major CapitalReplacements

Maintenance (3%)

Transportation (5%)Construction (18%)

(1%)

(1%)

(5 %)

The Study – The Costs and Financial Benefits of Green Building

Commissioned by California’s Sustainable Building Task Force

Led by Greg Kats, Capital E with Contributions from California Department of General Services and Lawrence Berkeley National Laboratory

Findings Green Buildings have an average 0 to 2%

increase in first cost over their conventional counterparts, but over 20 years, they will recoup 20% of construction costs —more than ten (10) times the original investment in green building features.

The Study – The Costs and Financial Benefits of Green Building

Financial Benefits of Green Buildings per ft2

CATEGORIES of VALUES 20-year NPV

Energy value $5.79

Emission value $1.18

Water value $0.51

Waste value (construction only) 1-year $0.03

Commissioning O&M value $8.47

Productivity and Health Value (Certified and Silver)

$36.89

Productivity and Health Value (Gold and Platinum)

$55.33

Less Green Cost Premium ($4.00)

Total 20-year NPV (Certified and Silver) $48.87

Total 20-year NPV (Gold and Platinum) $67.31

The Study – The Costs and Financial Benefits of Green Building

Contributors to increased value Percentage Breakdown of Green Building - Financial

Benefits LEED Certified & Silver Buildings

Productivity &

Health

70%

Reduced O&M

16%

Waste

0%

Energy

11%Water

1%

Emissions

2%

Capital Cost for Building Green First cost vary significantly

Nature, location, size of projects

Timing to introduce LEED goal

Level of LEED certification desired

Process used to select LEED credits

Local and regional design standards, including

codes and initiatives

Experience of design team

Experience of contractors

Rebate and incentive programs

Is there any Premium Cost for Building Green?

Historical Information Our Findings LEED Certified Building fall into the same

range of cost as Building not LEED certified

It is possible to achieve Design Team and Owner’s goals by making value decisions without adding to the budget.

Each Building is UniqueNo one-size-fits-all Answer

Trends Cost ($) for building green

decreases as

Consultants and contractors gain more experience

Newer, cheaper and better availability of green materials

More local policy incentives

Ref. Points Description Cost Implication ($)

SSp1 Erosion & Sedimentation Control

No or minimum additional cost, typical to project requirements

SSc1* Site Selection High credit attainment %

SSc2 Urban Development Density

SSc3 Brownfield Development

Cost can be significant

SSc4.1*

Alternative Transport Public Transportation Access

SSc4.2*

Alternative Transport 5% Bicycle Storage & Change/Shower Room

Relatively inexpensive

Points Analysis Sustainable Sites (SS) *(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

SSc4.3 Alternative Transport Alternative Fuel Refueling

Cost depends on types of fuel etc., may become obsolete.

SSc4.4*

Alternative Transport Parking Capacity Reduction, Vanpools

Minimum cost

SSc5.1 Reduced Disturbance Protect / Restore Open Space

Minimum cost; Expensive if underground parking is used

SSc5.2*

Reduced Site Disturbance Development footprint

Minimum cost or not achievable at all

Points Analysis Sustainable Sites (SS) *(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

SSc6.1 Stormwater Management no net increase in Rate & Quantity of Stormwater run off

Cost depends on method smaller footprint, pervious paving, relatively inexpensive or even save money green roof, more expensive( up to $100 / square foot)

SSc6.2 Stormwater Management Treatment - remove TSS and TP contaminants

Swales – minimum cost impact;Retention / Detention Ponds - more expensive; Stormwater Collection Tank - costly

SSc7.1*

Landscaping actions to reduce heat island effect Non-roof

Relatively low cost for adding shade trees etc.

Points Analysis Sustainable Sites (SS) *(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

SSc7.2*

Landscaping actions to reduce heat island effect, Roof

Energy Star compliant roofing – relatively inexpensiveGreen roof – can be costly

SSc8* Light Pollution Reduction by eliminating light trespass from site

Some premium cost – external lighting, added cost for sensor or light shades

Points Analysis Sustainable Sites (SS) *(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

WEc1.1* Water Efficient Landscaping less potable use

High efficiency irrigation and indigenous plants, minimum cost; rain water collection system can be more expensive

WEc1.2* Water Efficient Landscaping, no irrigation

Use reclaimed water supplied by local water district – low cost

WEc2 Innovative Wastewater Technology

Low flow or waterless sanitary fixtures – premium cost

WEc3.1* 20% Water Use Reduction

Sensors to plumbing fixture – premium cost

WEc3.2 *

30% Water Use Reduction

Waterless sanitary fixtures & reclaimed water system, either on site or through local water district

Points Analysis Water Efficiency (WE) *(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

EAp1 System Commissioning 0.1-1.0% of total construction cost

EAp2 Minimum Energy Performance per ASHRAE/IESNA 90.1-1999

EAp3 CFC Reduction in HVAC&R

No additional cost, standard practice

EAc1.1-5*

Optimize Energy Performance 20 - 60% new 10 - 50% Existing Building

Cost varies – energy efficient lighting fixtures & HVAC equipment; efficient control system; low - E glazing; shading devices; soft cost for energy modeling

Points Analysis Energy & Atmosphere (EA)*(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

EAc2.1-3

Renewable Energy 5 - 20% of total building use

PV panel: 1KW - $8,000 - 8,500

EAc3* Additional Commissioning including during design process

Reasonable additional cost compared to system commissioning pre-requisite

EAc4 Ozone Depletion, no HCFC’s or Halons (including at Central plant)

No additional cost, standard practice for new construction

EAc5 System Measurement & Verification for accountability / optimization

Can be costly

EAc6 Green Power, 2-year utility contract to buy energy from renewable sources

Reasonable cost based on annual energy usage; operation cost rather than first cost

Points Analysis Energy & Atmosphere (EA)*(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

MRp1 Recyclable Collection / Storage

Reasonable cost

MRc1.1-2 Maintain 75 - 100% of Existing Structure

For renovation projects only, might affect achieving energy use reduction

MRc1.3 Reuse, maintain 100% shell, 50% non-shell

MRc2.1-2 *

Construction Waste Management, Divert 50-75%, measured by weight

Cost varies depending on project location and waste recycling program

MRc3.1-2 Resource Re-use, Specify 5 -10% salvaged / refurbished, by cost.

May not achieve due to the high percentage, cost impact normally minimum

Points Analysis Materials & Resources (MR)*(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

MRc4.1-2 *

25-50% total materials have Recycled Content post consumer/post industrial - by cost

High level of attainment on certified projects.

Possible initial material cost premium.

MRc5.1 * 20% total materials are Manufactured Regionally measured by cost

High level of attainment on certified projects.

Possible material cost premium due to limited resources.

MRc5.2 * 50% of above Regional Materials were locally sourced / harvested

High level of attainment on certified projects.

Possible material cost premium due to limited resources.

Points Analysis Materials & Resources (MR)*(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

MRc6 Rapidly Renewable Materials - 5% of total materials measured by cost

Few achieved this on certified project. Difficult to get percentage requirements

MRc7 50% of wood-based materials to be from FSC-Certified wood

More expensive than non-certified wood. 5 - 18% higher.

Points Analysis Materials & Resources (MR)*(yellow categories) / most

achieved points

Ref. Points Description Cost Implication ($)

EQp1 Minimum IAQ Performance per ASHRAE 62-1999

No additional cost

EQp2 Environmental Tobacco Smoke Control

No (prohibition) or additional cost (designated smoking room), standard practice in CA

EQc1* Carbon Dioxide Monitoring

Premium cost for sensors

EQc2 Ventilation Effectiveness per ASHRAE 129-1997

EQc3.1 *

IAQ Plan During Construction

Additional cost for temporary storage, replace filter, dehumidification equipment

Points Analysis Indoor Environmental Quality (EQ)

*(yellow categories) / most achieved points

Ref. Points Description Cost Implication ($)

EQc3.2 *

IAQ Plan Before Occupancy

2 - week flush out needs to be integrated into the construction schedule, additional cost

EQc4.1 *

Low-Emitting Adhesive Sealant

No or minimum cost High level of attainment

EQc4.2 *

Low-Emitting Materials Paints

No or minimum cost High level of attainment

EQc4.3 *

Low-Emitting Materials, Carpets

No or minimum costHigh level of attainment

EQc4.4 Low-E Composite Wood Minimum cost

EQc5 * Indoor Chemical /Pollutant Control

Minimum cost

Points Analysis Indoor Environmental Quality (EQ)

*(yellow categories) / most achieved points

Ref. Points Description Cost Implication ($)

EQc6.1 Controllability, Perimeter

Operable windows / traditional air-conditioning (AC) system

EQc6.2 Controllability, Non-Perimeter

Difficult to attain credit /raised flooring system

EQc7.1 *

Thermal Comfort Compliance

Design issue

EQc7.2 *

Thermal Comfort, Permanent Monitoring

Some added cost

EQc8.1 Daylight, 75% Design issue

EQc8.2 *

Daylight and Views, 90%

Design issue

Points Analysis Indoor Environmental Quality (EQ)

*(yellow categories) / most achieved points

Ref. Points Description Cost Implication ($)

IDc.1 * Innovation in Design Varies

IDc.2 * Innovation in Design

IDc.3 * Innovation in Design

IDc.4 Innovation in Design

IDc.5 * LEED Accredited Professional None

Points Analysis Innovation and Design Process

*(yellow categories) / most achieved points

Other Cost Factors to Consider Documentation cost ($) during Design

and Construction Extra Design Fees Rebate Programs

Solar incentive program by LADWP Local Green Building Incentives

such as expedited permitting, low inspection

fees, tax credit, and Savings by Design Program

Experienced Design Team Fees (Source: GSA)

New Courthouse

Certified Silver Gold1A 2A 3A 4A 5A 6A

Design Fee Premium $88.1 $93.3 $88.1 $116.5 $116.5 $160.5LEED Documentation & Certification $24.3 $24.3 $26.0 $26.0 $29.5 $29.5

Soft Cost Totals $112.4 $117.6 $114.1 $142.5 $146.0 $190.0Cost Impact ($/GSF) $0.43 $0.45 $0.44 $0.54 $0.56 $0.73

Office Modernization

Certified Silver Gold1A 2A 3A 4A 5A 6A

Design Fee Premium $78.0 $80.0 $87.7 $103.1 $147.0 $143.4LEED Documentation & Certification $28.7 $28.7 $30.4 $30.4 $33.9 $33.9

Soft Cost Totals $106.7 $108.7 $118.1 $133.5 $180.9 $177.3Cost Impact ($/GSF) $0.35 $0.35 $0.38 $0.44 $0.59 $0.58

Savings by Design Program is

Founded by California Utility Customers Administered by Pacific Gas and Electric (P G&E),

San Diego Gas and Electric, Southern California Edison Company and Southern California Gas Company.

Whole Building approach Systems approach

Daylight saving Interior lighting system Heating, ventilation, and air conditioning (HVAC)

system Service Hot Water Other Systems

Savings by Design

Incentives Maximum incentive for the Owner is

$150,000 under the whole building approach

$75,000 under the systems approach

Maximum incentive for the Design Team is $50,000

Cost Implications of LEED

Understanding Cost Constraints

LEED Point Analysis

Sharing our Lessons Learned

Questions and Answers

Sharing Best Practices from Audience Members

Thank you for attending