FEATURE
SECTION
Good, better, best
Small cost
to be green
Recent local research supports international findings that building
green doesn’t necessarily cost more. Industry perceptions, however, still
overestimate the real cost difference.
BY ROHAN BUSH, DIRECTOR OF KNOWLEDGE AND LEADERSHIP, NEW ZEALAND GREEN BUILDING COUNCIL (NZGBC)
ARE GREEN BUILDINGS INHERENTLY MORE EXPEN-
inherently more expensive. Drawing on
mean that, even where there’s a cost
SIVE to construct? Do they command a
data from several studies between 2000
premium, this is offset by lower energy
premium in rental returns and asset value?
and 2012, the report maps green design and
and operational costs – particularly when
And do they deliver tangible benefits for
construction costs in a range from 0.4% less
buildings incorporate high-performance
occupants?
than conventional building to 12.5% more.
façades and energy-efficient systems.
For the majority of green certified buildings,
Industry misconception
What research shows
the cost premium is less than 4%.
An interesting facet of the study is the
There are numerous international studies
As industry matures, costs decline
perception gap. While the actual cost
on different aspects of the business case for
The higher the environmental certification,
premium for most certified green build-
green buildings. A recent report from the
the higher upfront capital costs tend to
ings is 0–4%, industry perceives the cost
World Green Building Council, The busi-
be – although there are increasing examples
differential to be as high as 29% (based on
ness case for green building – a review of the
of buildings that achieve both high certifica-
design stage estimates and surveys).
costs and benefits for developers, investors
tion, and come in at less cost than more
This could be due to a low awareness of
and occupants, synthesises the latest, most
modest projects. Costs are also shown to
the decreasing costs or it may come down
relevant research into one study.
be declining as the global industry matures.
to the fact that high-profile showpiece
In September, the key findings were
The report concludes that building green
green buildings often feature highly visible,
presented to industry experts in Auckland.
doesn’t necessarily cost more, ‘particularly
costly finishes or architectural features that
With commercial development such a hot
when cost strategies, programme manage-
don’t actually add to their environmental
topic in both Christchurch and Auckland,
ment and environmental strategies are
performance.
it’s good timing to reflect on our progress
integrated into the development process
in sustainable building.
right from the start’.
Findings mirrored in New Zealand
Cost premium generally under 4%
Less expensive to operate
Does New Zealand reflect the same patterns
One of the key preconceptions challenged
Importantly, the research also shows that
in green building? Is there an inherent cost
by this study is that building green is
decreased energy and operational costs
premium to building green?
68 — Build 139 — December 2013/January 2014
A study by Rochelle Ade and Michael
a wide variation, particularly among 5 and
The first stage of their work involved
Rehm, Construction costs comparison between
6 Green Star buildings, where one cost 35%
qualitative interviews with 15 industry
green and conventional office buildings,
less than the modelled cost and another
professionals. None of them thought Green
suggests that, in line with the international
was 96% higher.
Star-rated buildings would cost the same
research, there is no systematic cost differ-
Ade and Rehm conclude that ‘on the
or less than a conventional building, with
ence between green and conventional
whole, green buildings are not inherently
estimated premiums ranging from 1% to
construction in New Zealand.
more expensive due to their provision of
more than 10% depending on the level of
Ade and Rehm’s research is the first
sustainable materials and systems… they
certification.
empirical study to analyse detailed cost plan
can, in fact, be considerably less expensive,
The authors stress that more research is
data to quantify the impact of green building
particularly when mechanical systems can
needed. It would be particularly interesting
on construction costs in this country. They
be minimised or omitted’.
to understand more about industry percep-
examined the costs of 17 certified Green Star
This indicates that, as in other markets,
tions, what the influences are and how
buildings, ranging from 4 to 6 Green Stars,
our sustainable building industry has
these can be better aligned with actual
comparing them with the modelled costs of
matured, and there are skilled practitioners
cost data.
conventional construction.
delivering healthier, more efficient build-
While green buildings were on average
more costly to construct than conventional
For more
NZGBC recently released 3the
ings for no more cost than a conventional
Research Roadmap for a Sustainable Built
build.
Environment, with the support of BRANZ.
buildings, the difference wasn’t statistically
Download the roadmap from www.nzgbc.org.nz.
significant, and seven buildings out of the
Similar misconceptions
Download the World Green Building Council
cohort were less costly. Two of these were
Ade and Rehm also report some interesting
report mentioned from www.worldgbc.org/
more than 20% less expensive. There was
findings in regards to industry perceptions.
business-case.
Build 139 — December 2013/January 2014 — 69