Why Green Buildings are Worth It 0


It is the question asked for so many times when talking about green building. Does it pay off to make your building green (or at least greener)?

What Makes Up a Green Building?

According to The US Environmental Protection Agency (US EPA), green (or sustainable) building is the practice of creating and using healthier and more resource-efficient models of construction, renovation, operation, maintenance, and demolition. While there is no federal green building program to standardize this practice, LEED (Leadership in Energy and Environmental Design) has become the standard in the United States and is globally recognized. LEED certification addresses the needs of a green building and its lifecycle from initial design and conception to its maintenance. A building is considered green building by obtaining and maintaining the certification.

Is It More Expensive to Build and Operate a Green Building?

As green building practices are becoming more mainstream, the common belief that green buildings cost more than the conventional ones still persists. This case is only true if the green building design is not incorporated from the beginning. A recent study published by World Green Building Council states that when adopted since the early planning stage, green building premiums can go as low as 0.4 percent on top of the construction cost. These premiums however will pay for themselves overtime.

Kats (2003) did a study on 33 LEED-certified projects in the United States and found that a 2% upfront investment on top of the construction costs will yield over ten times in savings based on a 20-year lifecycle. It also points out that green building have been shown to save money through reduced consumption of energy and water and lower long-term operations and maintenance costs. Those savings typically will exceed premiums associated with their design and construction within a reasonable payback period. In addition to reduced operating costs, green buildings offer indirect benefits related to costs for refurbishments and reconfiguration of space.

Case in point: Ernst & Young

The international accounting firm, Ernst & Young, in one of New York City’s largest LED lightings retrofit, recently replaced old lights in its 32-floor office space in its Times Square corporate Headquarters. The project covered new and more efficient custom fixtures, occupancy sensors, and controls to manage lighting use, and installation throughout the building’s offices, conference rooms, and common spaces. The simple retrofit will save the company $1 million each year by cutting the previous lighting energy and maintenance costs by 50%. The company also saw a 13% reduction in its upfront costs thanks to utility rebates and it will also cut its energy use by 54% or about 2.9 million kWh per year.

The project did not focus on energy alone, but also the space with the lighting was matched to the aesthetics of the building with care was taken to make sure that appropriate lightings were used in appropriate areas. The result? An improvement in quality of light for the building’s more than 5,500 workers. The installation only took one night shift to complete.

The Market Value

Driven by higher rental rates, lower operating costs, and higher occupancy rates, green buildings are able to attract more tenants and command higher rents and sale prices. In markets where green buildings are more mainstream, less green buildings tend to command lower rental rates, and operate on higher operating costs. A good example for this statement is LEED Platinum-certified, One Bryant Park in New York City which commands one of the highest rents in the city.

Workplace Productivity and Health Benefits

A Net Present Value analysis on the operational costs vs productivity and health benefits on LEED certified buildings shows that personnel working in those buildings enjoy 10-25% better mental and memory function, 6-12% faster in call processing, and experienced 8.5% shorter hospital stays. Considering the fact that a good 85% portion of companies’ HR budget are spent on salaries and health benefits, the added value of working in green buildings is certainly very appealing to companies and their employees. After all, happier worker brings more productivity and better operations.

This article is originally posted on CleanEdison Blog

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