Is LEED Certified Construction Management Worth the Investment?

Nearly every major city or province is investigating the possibilities of renewable energy, as attested in a recent post about the Bala Falls Hydro Project in Ontario. Green building projects are on the rise in North America, with many new building achieving LEED certification at some cost to builders and homeowners. While everyone can agree that we need to conserve the earth’s dwindling resources, not everyone is pleased about those upfront costs, as Noelle Hirsch writes in today’s post. Noelle writes for http://www.constructionmanagement.net/, an online resource about all things construction.  Check out her guest post below

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By: Noelle Hirsch

There are two competing interests in construction management today: first, to overcome the slumping market and sell buildings; and second, to build with energy-saving and eco-conscious features in mind. Ideally, these two should go hand in hand, and in many cases they do. It can be tempting, though, for construction managers to seek cost-saving shortcuts for purposes of funding or expedience. Designing a building to be “green,” and seeking green certifications, is a costly and time-consuming process, which has many wondering whether the investment is worth it. In most cases, buildings built to green standards save a lot of money in energy costs over the years. The payback window can be long—20 to 30 years in some cases—but for permanent structures like houses, government offices, and schools, those savings can really add up.

Reduced energy consumption is one of the primary goals of the United States Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification program. Construction teams who build structures to LEED certifications are eligible for inspection by USGBC officials, which culminates in an award corresponding to one of LEED’s five tiered levels: certified, bronze, silver, gold, or platinum. There are many different criteria for building teams to meet. Some are simple fixes, like using energy-efficient appliances or motion-sensing faucets and low-flow toilets. Others, like geothermal heating and cooling units and construction designed to maximize natural light and air flow, are more complex. All relate in some form or another to energy conservation, however, which can mean big cost savings for building owners and tenants.

Energy expenditures tend to be huge in the United States. Inefficient building is mostly to blame. Poor insulation, unnecessarily wasted water, and lights left burning strong waste significant sums each year. Ernst & Young, a financial services company, recently shaved $1 million off its annual electricity bill simply by replacing all of light bulbs in its Times Square offices with efficient models, and installing light sensors in public spaces. “The retrofit is one of the largest LED lighting retrofits yet in New York City. It will cut Ernst & Young’s lighting-related energy and maintenance costs in half,” SmartPlanet reported in 2012.

While the cost savings were substantial, the retrofit was not cheap. After rebates and grant awards were factored in, Ernst & Young spent $2 million upfront for the changes. If energy efficiency keeps up, the changes will of course pay for themselves. Many skeptics of the green program wonder if there is not too big a focus on the bottom line, however.

Henry Gifford, a New York-based energy efficiency expert, has openly criticized the LEED certification program’s focus on energy saving potential, rather than energy saving actuality. “It's impossible to go out and buy a building with a guarantee for how much energy it won't use,” Gifford told National Public Radio’s All Things Considered. “What really needs to happen is the transformation of the owners and the operators of the buildings to ensure that the building is being operated properly,” he said. “I like to say you can get the same gas mileage out of a Prius that you get from a Hummer if you drive it incorrectly.”

One thing seems clear, though: building owners who are committed to keeping their costs low can usually succeed, either with LEED or other small energy-saving measures. As was the case with Ernst & Young, a number of grants and subsidies are usually also available, which can help keep the upfront investment manageable. Many states and localities offer tax breaks for green building initiatives, for instance. Reductions or waivers for city inspection fees are available in some places, as well.

The federal government, usually through the Department of Energy, the Environmental Protection Agency, and the Department of Health and Human Services, also offers grant money to help builders and designers offset the costs of planned green improvements or additions. Applying for these grants and understanding the parameters often takes a lot of time and planning upfront. This means that construction and design teams usually need to budget not just finances, but also time for their projects.

“Going Green” is fast becoming a way of life for many in the construction industry. Seeking certification is usually about more than just earning a fancy credential—it is about long-term savings and reduction in energy consumption. This takes planning, saving, and doing, but is worth it for most in the long run.