The Cost of LEED—An Analysis of the Construction Costs of LEED and Non-LEED Banks

Mapp, Chad; Nobe, MaryEllen C.; Dunbar, Brian

doi:10.1080/10835547.2011.12091824

Cited by 49 publications

(14 citation statements)

References 2 publications

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“…The strength of AE in terms of large project data optimization is unparalleled (Element Energy and Langdon, 2011; Khoshbakht et al , 2016). AE provides a robust methodology suitable to closing the gap in qualitative (Hwang et al , 2017) and quantitative-case study (Mapp et al , 2011; Rehm et al , 2013; Gabay et al , 2014).…”

Section: Literature Reviewmentioning

confidence: 99%

Green cost premium for attaining energy-efficiency rating in Nigeria's hot-humid residential buildings

Ekung

Odesola

Adewuyi

2021

IJBPA

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PurposeThe dearth of green standards (GS) in sub-Saharan Africa is alarming and the green cost premiums (GCP) in seeking certification in emerging markets are scanty. This paper studied the Building Energy-Efficiency Code of Nigeria (BEEC) and estimated the potential GCPs associated with the various energy-efficiency ratings.Design/methodology/approachThe study retrofitted 150 conventional residential bungalow and maisonette buildings using BEEC's energy-efficiency interventions and performed analytical estimating of the retrofitted designs. The mean cost premium associated with each energy-efficiency intervention is presented as well as their financial benefits and payback periods. The benefits are achievable financial-savings due to a reduction in energy consumption and savings in electricity payment estimated from the average energy demands of each building. An independent t-test was further conducted to determine the cost differential between energy-efficient design (ED) and conventional design over a five-year period.FindingsThe potential GCPs and their payback periods are actually less than feared. The study showed that less than 5% and 21% extra funding would be required to achieve 1 to 4-Star and 5-Star energy-efficiency ratings involving passive design interventions and photovoltaic systems. Passive and active design interventions produced a financial savings of $8.08/m2 in electricity payment and $2.84/m2 per annum in energy consumption reduction. The financial-savings ($10.92/m2) was objective to pay-off the GCPs in less than four years. The independent t-test analysis showed the cost of ED is more economical after four years into the project lifecycle.Originality/valueThe research provides cost benchmarks for navigating cost planning and budgetary decisions during ED implementation and births a departure point for advancing energy-efficient construction in developing markets from the rational economic decision perspective.

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Section: Literature Reviewmentioning

confidence: 99%

Green cost premium for attaining energy-efficiency rating in Nigeria's hot-humid residential buildings

Ekung

Odesola

Adewuyi

2021

IJBPA

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“…Cost premium of green buildings The higher upfront costs of the green building relative to conventional buildings are considered a barrier to widespread green buildings diffusion (H€ akkinen and Belloni, 2011;Madew, 2006;Yudelson, 2016). The literature on cost premiums of green buildings provides differing views; some literature argues that cost of green and conventional buildings are almost the same (Mapp et al, 2010;Matthiessen and Morris, 2004;. Kats (2003), compared the cost of 33 LEED-certified buildings with their conventional building design and the cost premium, on an average, came out to be 1.84%.…”

Section: Financial Benefits Of Corporate Green Buildingsmentioning

confidence: 99%

Investment appraisal and financial benefits of corporate green buildings: a developing economy case study

Verma

Mandal

Robinson

et al. 2021

BEPAM

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PurposeThis case study aims to appraise the financial benefits of green building construction in developing countries. The case study presents, green building's positive net present value (NPV) investment in real terms and potentially enhanced stock market returns at the firm level compared to competitors.Design/methodology/approachThe case study examines secondary data on a green building certification and longitudinal operation costs to estimate green building investments' financial benefits. The case study also compares the stock market performance of green building portfolio company with non-green building competitors of similar size and industry.FindingsThe case study finds out that the real return rate on green building investment is higher than the weighted average cost of capital (WACC) of the company with an inflation-adjusted payback period of fewer than ten years. Findings compare favourably to the extant literature which was mostly in developed economies. The paper further highlights that stock market performance for a green building focused company shows improved returns to shareholders relative to non-green competitors.Research limitations/implicationsThe results are specific to the time and building researched; green buildings costs have reduced over time, and a new study may show improved case study findings. The case study results on stock market performance are indicative and may need further research for evaluation.Practical implicationsThe case study presents a model for critical appraisal of green buildings investment. The paper further indicates that green building investment may lead to operational savings and superior stock performance compared to competitors.Originality/valueThe paper presents a green building investment appraisal model which might be useful for the industry and academia. Developing countries have limited literature on green buildings' financial benefits; this case study quantifies the financial benefits and compares them with the available literature related to developed economies’ green buildings.

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“…Against the reported high-cost premiums, ordinary certification is achievable at zero extra cost (Ekung, 2019;Sun et al, 2019). The costs could be cheaper or equal to the costs of an alternate construction approach (Sherwin, 2006;Mapp et al, 2011;Dobson et al, 2013). Lower cost premium (1-5%) also exist subject to the level of certification (Kats et al, 2003;Hwang et al, 2017).…”

Section: Cost Misperceptions and Their Factual Positionsmentioning

confidence: 99%

Demystifying cost misperception as a challenge to green building adoption in Nigeria

Ekung

Odesola

Opoku

2021

JEDT

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Purpose The pertinent information about green buildings (GB) is laden with cost misperceptions (CM) that are paraded into adoption decisions without factual clarifications. The unsupported beliefs are fundamental to the disparaging low adoption of related technologies globally. The purpose of this paper is to explore the causes of CMs among construction stakeholders and why is it difficult to discredit this information? Design/methodology/approach The research adopted two-tier approaches involving a Delphi study and a questionnaire survey. Construction stakeholders and GB experts, totalling 415 were surveyed, while 12 professionals participated in the Delphi study. This study analysed data from 254 valid responses using Factor Analysis, Fussy Set Theory and Kruskal Wallis test to explain why CMs are prevalent. Findings The causes of CMs converge towards seven principal factors including low knowledge of GB practices, non-familiarity with performance metrics, inadequate evidence, poor-risk perceptions and reliance on the costs of exemplar projects. The results were explained using gaps in cost management, knowledge and sustainability accounting to show the critical improvements that can benefit GB adoption. Practical implications CMs are not abstract but develop from patterns that can be detected and understood within a specific context. Growing GB projects within a region would improve cost information, sustainability accounting, cost management and quality of evidence. GB cost information paraded into adoption decision processes are overestimated and overvalued beliefs of their financial implications. Tackling the important sources of CMs in the study is appropriate to improve rational decision-making aiding GB adoption. Originality/value This study untied causes of negative dispositions towards the cost of GB that distort stakeholders’ adoption decisions.

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The Cost of LEED—An Analysis of the Construction Costs of LEED and Non-LEED Banks

Cited by 49 publications

References 2 publications

Green cost premium for attaining energy-efficiency rating in Nigeria's hot-humid residential buildings

Green cost premium for attaining energy-efficiency rating in Nigeria's hot-humid residential buildings

Investment appraisal and financial benefits of corporate green buildings: a developing economy case study

Demystifying cost misperception as a challenge to green building adoption in Nigeria

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