Why It Makes Financial Sense to Build Green

Whilst it would be easy for me to say that green building always pays when you consider the wider benefits it can sometimes seem hard to justify the additional up-front costs. Certainly ensuring that a building comes in on budget and is not a financial burden is likely to be top of the list. Payback calculations across the whole spectrum will be vital in justifying a green building.

Energy Prices are Rising
Energy Prices are Rising

Payback periods can be long term on some renewable energy systems. However it is important to recognize the rapidly changing environmental and economic climate where energy prices are rapidly increasing and future supplies are uncertain. What seems uneconomical today could well prove an attractive investment for tomorrow. Interestingly a study carried out in the UK showed that the extra cost of building to sustainable code level 3 is 5%. In other words code level 3 buildings are nearly at parity (only 5% extra cost).

Two recent studies in Oregon USA have demonstrated that a 30% sold price premium for green certified homes over those without such a certification and homes with a relatively new 3100 watt solar PV system in California can be sold for an average sales price premium of $17,000 more than a normal home. Our own market research amongst overseas buyers in Spain suggests that people are prepared to pay between 20 and 30% more for an energy efficient building.

These kind of figures could be replicable in Europe especially as we approach 2019 which is when all new buildings have to be zero carbon. The difference in value between an energy efficient home and a conventional home could well increase.

It might be smart to think about that now and protect the value of your investment.

Green Doesn’t Mean Expensive
Green doesn’t have to mean expensive. This is a common misconception. Green can also mean resource efficient: efficient in construction and efficient in use. Climate change is a reality and we now live in a society that is increasingly aware of environmental issues so greening a building is seen as adding real asset value and future proofing it for the uncertain more fuel scarce times ahead.

It’s important when designing a green building that the design is considered holistically. With any building it makes no sense to value engineer every item against the sustainable options. For instance a little investment in say better insulated and energy efficient windows will mean a saving elsewhere such as a reduced heating requirement.

Teamwork – the key to cost efficiency
To keep costs down it is important that all members of the team, the architects and professional team, the builders and the engineers are all aware of the energy efficient commitment from the earliest possible opportunity in the project. That way everyone knows what is expected, efficiency should increase, ideas are pooled, and costs contained. By considering the whole building as a system and by facilitating teamwork between members of the design and build team early in the project value can be engineered into the project as a result of the synergies that arise when all members of the team work to a common goal.

This contrasts with the conventional procedure whereby the architect works on the specification alone and only when they have finished do they submit it to a builder and an engineer who, without knowing why things have been designed as they have is expected to offer a competitive quote. This explains why designs often have to be re-done to fit a budget, why they take so long and why the finished build doesn’t fulfill the energy efficient expectations when completed.

Compete on Quality Not On Price
It’s important to understand that energy efficient buildings by and large do not compete on price especially in Spain where you can build to the minimum standards required by law sometimes for as little as €800 / m2. Energy efficient buildings compete on quality. Just like with cars the cheapest possible means of getting from A to B is not the only criteria for a buy decision. An energy efficient home is a well thought out, well build home. It’s a quality home and the chief pay-off is a comfortable healthy living environment that makes you feel good.

Author: John Wolfendale
Bio: John is a founder of Eco Vida and is passionate about bringing modern design and construction practices to Spain. He believes a home which is warm in winter and cool in summer is largely a matter of design and selective use of materials. He is British and a Chartered Surveyor with 18 years experience living and working in Spain.