Page 184 - Green Building Through Integrated Design

160 INTEGRATED PROJECT MANAGEMENT—COST/BENEFIT ANALYSIS OF GREEN BUILDINGS

When the team finds credits that align with the owner’s Triple Bottom Line Goals,
then they can evaluate the level of certification to which the project will aspire. The
life-cycle benefits of building green depend a great deal on the inflation of the opera-
tional cost factors. Operational costs such as energy, water, and maintenance are trend-
ing higher each year. Some operational costs are increasing fast, some as high as
10 percent or more per year. When analyzing the life-cycle benefits of building green,
these factors should be taken into account.
We will now evaluate a complete example LEED project. We have evaluated all four
levels of certification to produce this data. Soft and hard costs have been calculated
just as in the previous examples. Also, life-cycle benefits were calculated for all four
levels of certification, for an analysis period of 10 years. The impact of inflation
(above nominal rates of 3 percent) on the benefits was also evaluated and is shown for
a 0 percent (Fig. 8.9) and 5 percent rate (Fig. 8.10). These examples highlight the
importance of factoring in the inflation rates for operational costs when evaluating
green building options, since many green building measures involve adding costs
upfront to receive a stream of benefits later (such as savings in energy and water costs).
In Table 8.11, you can see the net benefits increase at each higher level of certifica-
tion. Ironically, the Silver and Gold certification levels yield a faster payoff than just
plain Certified, breaking even in the second year. Even the Platinum certified building
in this analysis breaks even in the third year, without assuming any inflation of energy
or water costs, for example.

Figure 8.9 LEED sample project cumulative cash flow (0% benefit inflation).
Paul Shahriari, GreenMind Inc.