Cost/Benefit Analysis of LEED-NC & LEED-EB

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Cost/Benefit Analysis of LEED-NC & LEED-EB

  1. 1. Cost/Benefit Analysis of LEED-NC & LEED-EB
  2. 2. Why are High-Performance Buildings Important? <ul><li>It is an ethical and practical response to issues of environmental impact and resource consumption </li></ul><ul><li>Make economic sense on a life-cycle cost (LCC) basis </li></ul><ul><li>Health of occupants </li></ul>
  3. 3. What is LEED-NC <ul><li>LEED-NC assess commercial and institutional projects, including office buildings, high-rise residential buildings, government buildings, recreational facilities, manufacturing plants and laboratories (LEED-NC website) </li></ul>
  4. 4. What is LEED-EB <ul><li>LEED for Existing Buildings addresses whole-building cleaning and maintenance issues (including chemical use), recycling programs, exterior maintenance programs, and systems upgrades (LEED-EB website) </li></ul>
  5. 5. LCA vs. LCC <ul><li>Life-cycle assessment (LCA): method for determining the environmental and resource impacts of a material, a product, or even a whole building over its entire life. </li></ul><ul><li>Life-cycle costing (LCC): a cost/benefit analysis performed each year of the building’s probable life to determine if a greater initial cost will yield a significantly lower operational cost over time. </li></ul>
  6. 6. Net Present Value Initial Project Cost, Year 0 Savings Year 1 Savings Year 2 Savings Year n Net Present Value $ YR1 $ YR 2 $ YR N
  7. 7. Financial Analysis Inputs <ul><li>Average of 2% premium on cost of construction nationwide for LEED silver </li></ul><ul><li>Measures hard costs </li></ul><ul><ul><li>Hard costs much easier to quantify (i.e. energy savings) </li></ul></ul><ul><ul><li>Soft costs more difficult (i.e. employee health) </li></ul></ul><ul><li>Discount rate is subjective </li></ul><ul><ul><li>Cap. Rate </li></ul></ul><ul><li>Time period used is 20 years </li></ul>
  8. 8. Case Study: Joe Serenca Jr. California EPA Headquarters Building, Sacramento, California.
  9. 9. Concluding Thoughts <ul><li>LEED has many criticisms </li></ul><ul><ul><li>High rate of failure </li></ul></ul><ul><ul><li>Point system is unbalanced </li></ul></ul><ul><ul><li>Hard to breakthrough initial cost </li></ul></ul><ul><ul><li>High expense for the stamp </li></ul></ul><ul><li>LEED has exponential growth at an average rate of 120% per year </li></ul><ul><li>LEED 3.0 implemented in January of 2009 </li></ul>

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