The Cost of Green Building


How much more will it cost is always the first question from someone new to the field. The answer will always be: “It depends”. A comparable question is “how much does a car cost?” Is it a Kia or a Mercedes? What year is it?

Green homes built over the last 15 years have proven that it doesn’t’ have to cost more to build green. The major variables are typically; what is the experience of the architect/builder, how early in the design process were green building features incorporated, what is the source of the green materials, and how green or energy efficient doesthe design team want the home to be?

The learning curve for architects and builders is the greatest variable. Experience has shown that the first green home a builder builds is the most expensive often 3-5% higher than conventional construction costs. Trade contractors often increase their prices for unfamiliar products or approaches. Their second house is 2-3% more because the learning curve has informed their process. The third house is often back to the cost of conventional homes they built in the past. Part of this learning curve is to incorporate green design early in the process. To make the home as energy efficient and cost effective as possible the house needs to be sited so that the majority of windows face south. Passive solar heating can reduce heating bills by 30-50% with little or no additional cost.

Some green materials may not be available in the region immediately. Shipping costs can make non-local materials much more expensive than traditional products. Typically, however, as green building programs are adopted in local markets around the country, lumber yards and green building product suppliers come into the area to meet the new demand. With greater volume of use the prices go down.

How green or energy efficient the house is, dictates increases in first costs. When energy improvements are involved, costs are really investments. Money spent on energy improvements reduce monthly utility bills. This yields a return on investment for those improvements. For example, if the energy improvements add $5000 to the initial cost of the house and the owners get a 30 year mortgage at 5%, the monthly increase in the mortgage payment is $26.84. If those improvements reduce monthly bills by $28.00, the owner accrues a monthly return on investment from the first month. The faster energy prices rise the greater the ROI. It is a pretty safe bet that energy prices will continue to rise over the life of the home making energy investments in a home one of the best investments you can make today.