The recently released Arcadis International Construction Costs 2024 report indicates that one of the factors leading to higher construction costs is the market for low carbon buildings. What does this mean for the cost of building ownership?
We can compare the high performance low-carbon building market to the adoption of electric vehicles and the resulting business model flip. We pay more for an electric vehicle up front but have very few maintenance costs and a third of the “fuel” costs throughout the life of the vehicle. This has reduced the total cost of ownership and has the potential to diminish the auto maintenance industry significantly, making room for the vehicles themselves to rise in cost.
Low carbon buildings are similar. They offer very low operations costs, both for maintenance and fuel (energy and water), so buyers’ tolerance for higher first costs rise. This long view benefits the owner, and now the construction industry, because we are reducing the total cost of building ownership and shifting the costs to different parts of the budget.
Low carbon buildings don’t need to cost more unless they are highly specialized facilities such as datacenters and laboratories, as mentioned in the ICC report. Regardless of a building’s purpose, we can limit or even avoid a rise in first costs for these high-performance buildings by following a few smart practices:
Set building performance expectations and targets early and embed them in every decision – and that can mean before property acquisition. For example, if I know that a client wants a net zero building, we’re going to look for a location that offers the infrastructure and policies that allow for net metering and even large scale, on-site renewable energy installations. We may look for waste heat or cooling nearby, or maybe conductive geology as a ground source for thermal exchange. We will certainly look for low-carbon commuter options like cycling paths and good public transportation. Geospatial mapping can be tuned to pinpoint ideal locations for particular types of high-performance buildings and facilities based on owner goals and maximum cost efficiencies. Early, integrative building performance decisions are always cheaper than “add-on” sustainability features. Eleventh hour sustainability measures are expensive.
Embrace and leverage the iterative design process. Good design is not a linear process. Design a high performance, effectively oriented, thoughtfully formed building, and conceptually analyze building performance at every significant decision point. Make design adjustments early, before investing time into design development, and then run another iteration of the analyses—energy, water, daylighting, natural ventilation—whatever features the building needs for optimized use and performance. Today’s design tools (e.g. Autodesk products) allow all these factors to be assessed quickly within a design workflow without committing to a fully developed technical model. When the building design has solidified and has potential to achieve performance goals, conduct more robust energy, water, daylighting and ventilation modeling to confirm early analyses and right size equipment and plan for renewable energy generation, now optimized for significantly reduced consumption.
Track operational performance and ongoing costs and assure the building is doing what it was designed to do. For example, if we buy a dishwasher and it leaves half the dishes dirty, we do something about it—we check for problems, maybe the manufacturer recalibrates the sprayer, etc. If we do that for a small investment, it is imperative to do the same kind of follow up on a major investment. This includes building testing and commissioning during construction and then recommissioning at regular intervals. Think of it as getting the building systems serviced. It’s part of ownership. In addition, track the utilities. Know what’s going into the building, so that you have more control over what’s going out of your operational budget. I’m a big fan of Energy Star Portfolio Manager (it’s free—do it) for tracking energy and water consumption, benchmarking commercial buildings against similar ones, working as a hub for other diagnostic tools, and sometimes setting the owner up for funding and awards.
Do low carbon buildings cost more? Sometimes they can, often due to poor planning or complex building types with intensive operations. But most of the time they don’t need to cost more. An informed owner and an experienced design team can avoid the cost pitfalls of stick-on efficiency measures and focus on addressing the construction market cost factors that are truly outside of their control.
