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Green & Sustainable Construction

Budgeting & Financing Green Construction

Budgeting & Financing Green Construction

Green buildings present the same budgeting challenges that conventional buildings do, but with some added twists. For example, since sustainability is a main objective, how do you decide which sustainable features should get special consideration? A popular approach is to get the most “bang for the buck” by incorporating as many low- or no-cost green measures as possible or, for LEED® projects, to earn the most credits at the lowest cost. Sometimes, however, in order to highlight a particular green feature, a bit of “conspicuous conservation” may be employed—even if it’s not the most cost effective strategy. Also, there’s the question of which rating system, if any, will be used, and what rating level should be the goal? Funding and financing are often tied to specific rating systems and levels, so this will factor into the choice. The challenge is to find a balance between lower initial costs vs. long-term savings, all the while striving for the greenest building and staying within the budget. After all, what good is a green building if it can’t be built?

Estimators are well suited for being part of a green project team. Building involves architects, engineers, and other skilled professionals—all vital to the process—but when it comes to determining cost, the task falls not to architects, engineers, economists, or accountants, but to estimators. This often requires the estimators to work with other building professionals in order to distill all the facets of building down to the bottom line. With green building, the group of professionals is expanded, and the scope goes beyond human capital, to include earth capital as well.

Estimators should be brought into the design process as early as possible to help the designers decide which green strategies (or LEED points) are most cost effective. The cost of mechanical, plumbing, and site work systems tends to be influenced more by green attributes than other building components. Some material and product selections start much sooner than they would with conventional buildings, to assure that the sustainable preference for using locally sourced materials is met. Therefore, the estimator will be called in to obtain actual quotes sooner. As a consequence, cost estimates on green buildings are often more detailed and accurate earlier on in the process than with conventional buildings.

When working on LEED projects, cost estimates are required in order to determine eligibility for specific credits. To earn credit in the Material Reuse category, a percentage is required to document the amount of salvaged, refurbished, or reused materials. To find the percentage, the cost of the reused materials is divided by the cost of all the materials on the project. The quotient will determine if that requirement is met for the credit. The quotient method is used to determine if the requirements for other LEED credits have been met, as well.

For Recycled Content credits, a percentage of recycled content (postconsumer recycled content plus one-half of the pre-consumer content) is required, based on the cost of the total of the materials in the project. The recycled content value of a material assembly, however, is determined by weight. The recycled fraction of the assembly is multiplied by the cost of the assembly to determine the recycled content value. Post-consumer material is defined as waste material generated by households or by commercial, industrial, and institutional facilities in their role as end-users of the product, which can no longer be used for its intended purpose. Pre-consumer material is defined as material diverted from the waste stream during the manufacturing process. Excluded is reutilization of materials such as rework, regrind, or scrap generated in a process and capable of being reclaimed within the same process that generated it.

In the Regional Materials section, a percentage of building materials or products extracted, harvested, or recovered, as well as manufactured, within 500 miles of the project site (based on cost) is required for these credits. If only a fraction of a product or material is extracted, harvested, recovered, or manufactured locally, then only that percentage (by weight) will contribute to the regional value. In the Rapidly Renewable Materials section, credits require a percentage of the total value of all building materials and products used in the project, based on cost, be derived from rapidly renewable materials (made from plants that are typically harvested within a ten-year cycle or shorter). Under the Certified Wood section, a percentage of wood-based materials and products in wood building components must be certified in accordance with the Forest Stewardship Council’s (FSC) principles and criteria. These components include, but are not limited to, structural and general dimensional framing, flooring, subflooring, wood doors, and finishes. The specific percentages required for these credits depend on the LEED system and rating level that is being sought. Mechanical, electrical, plumbing components, specialty items, and equipment are not included in the calculations, and only materials permanently installed in the project are included. Furniture may be included, depending on the LEED rating system used and the level sought.

Excerpted from Green Building: Project Planning & Cost Estimating, available through RSMeans.


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