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“Green Building Premium” Is Often A Myth

Originally published on Sefaira
By Carl Sterner

The Myth of the Green Premium

Conventional wisdom holds that high-performance buildings cost more than their inefficient counterparts — therefore only green-minded clients, or those with a long-term stake in a building, would be interested in pursuing performance goals.

But what if the “green premium” is a myth? What if high performance can be delivered with no cost increase, or with attractive returns? Here are just a few examples that are beginning to prove that high-performing buildings can compete on cost, be sound investments, and even come with no cost premium at all. Even better, the recipe for these results turns out to be remarkably consistent.

Jess S. Jackson Sustainable Winery Building

This winery building in Davis, California, by Siegel & Strain Architects and Pankow Builders, received LEED Platinum certification and is targeting Net Zero Energy Building Certification through the Living Building Challenge. The building uses tried-and-true principles of passive design to dramatically reduce reliance on mechanical systems in Davis’s cooling-driven climate: a tight, well-insulated envelope, significant thermal mass, generous shading, and night flush ventilation.

According to Jim Coyle, Senior Project Manager at Pankow, the design team came in as the lowest bidder as well as the most ambitious in terms of sustainability. Furthermore, Pankow says that the project was delivered 11% below the original budget, even with significant improvements not originally in scope — proving that bright green projects can also compete on cost.

Empire State Building

empire state building

The iconic Empire State Building in New York recently underwent significant retrofits, which are projected to reduce the building’s energy use by 38% and achieve a 3-year payback. GreenBiz reports that since the retrofit, the building has exceeded its guaranteed energy savings by 5% in 2011 and 4% in 2012.

These energy savings were achieved through a package of improvements, including more efficient lighting systems, improved windows (each window was individually re-built into super-windows on site), radiator insulation, and improved air handling. Together, these enabled the team to avoid an expansion of the building’s chiller plant — saving $17.3 million in expected capital costs. These savings helped to pay for a significant portion of the efficiency upgrades.

The Rocky Mountain Institute — one of the partners responsible for the retrofits, along with Johnson Controls and Jones Lang LaSalle — reports that the building owners see the approach as simply good business:

“First and foremost, making the Empire State Building energy efficient was a sound business decision that saves millions of dollars each year,” said Anthony Malkin of the Empire State Building Company. “Building owners and operators who are looking to cut costs while improving the value of their buildings can use energy efficiency to accomplish these goals. We now have a proven model that works.”

424 Melrose Street

424 Melrose is a 24-unit apartment building in Brooklyn, New York. According to architect Chris Benedict, the building is on track to receive Passive House certification — which boasts 90% reduction in energy use compared to typical buildings. Benedict says that 424 Melrose has come in at the same per-square-foot cost as a typical multi-family residence in New York — in other words, no cost premium at all.

By making the building envelope super-efficient (good windows, high insulation levels, and air tightness), the design team was able to reduce the size of the mechanical systems dramatically, which reduced capital cost. The team is essentially moving cost from mechanical equipment to the building envelope — breaking even from a cost perspective while achieving breakthrough performance.

The Secret Sauce

Despite the differences in building type, scale, and financing, each of these projects utilized a similar set of strategies to deliver outstanding performance at low cost.

  • Use whole building energy analysis as a design tool to find opportunities and assess potential savings holistically. Each project incorporated energy analysis early and often to drive design decisions and assess cost-effectiveness of different options. Whole building analysis can show the multiple benefits of single strategies. For instance, improving lighting both reduces electricity consumption and reduces cooling loads, because inefficient lights dump more heat into the building. Whole building analysis can also demonstrate the combined effects of multiple strategies, helping designers find the combinations that unlock most savings at least cost.

  • Focus on passive strategies first, then efficient systems. In other words, first reduce the buildings loads, then find the best way to meet the remaining needs. Generally the largest loads are heating and cooling, followed by internal loads from lighting and equipment. (Again, whole building energy modeling can provide the needed intelligence for a specific design.) Many of these loads can be reduced cost-effectively through good design: elements such as well-placed windows, shading, natural ventilation, and other measures that are often integral to the design and aesthetic of the building.

  • Leverage efficiency to save on mechanical systems. By finding an effective combination of passive design strategies, each of these buildings was able to reduce the required size of mechanical systems, saving capital cost compared to a conventional base case. In some cases these savings can be enough to pay for all of the other strategies. Analysis tools like Sefaira make this step easy by enabling architects to look at heating and cooling capacity (alongside other outputs) from the earliest stages of design.

The good news is this: the design strategies employed are often simple and cost-effective, and many will be familiar to architects. The addition of energy analysis allows design teams to clearly quantify the benefits of these strategies across the entire building, and focus on the strategies that deliver the best results.

Image: Empire State Building via pisaphotography /

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