Global Warming Causes

Analysis Of A Complete Project

When the team analyzes credits or solutions, there are many synergies that should be reviewed. Many credits and solutions on LEED projects are directly related to other elements within the project. These opportunities provide the team to really accelerate the benefit curves for projects and reduce the life-cycle paybacks of many items.

Figure 8.8

---SKYLIGHTS & FLOORPLATE

Cumulative cash flow EQ Credit 8.1: daylight and views—

Figure 8.8

---SKYLIGHTS & FLOORPLATE

Cumulative cash flow EQ Credit 8.1: daylight and views—

TABLE 8.9 INDOOR ENVIRONMENTAL QUALITY: CREDIT 8 DAYLIGHT & VIEWS

		LEED CREDIT	LEED CREDIT
		SOLUTION #1	SOLUTION #2 NORTH
		INTERIOR AND	FACING SKYLIGHTS
	NON-LEED	EXTERIOR LIGHT	AND FLOOR PLATE
	BUILDING	SHELVES	RECONFIGURATION
Soft Cost	None	Additional daylight	Additional daylight
Impacts		modeling $10,000	modeling $20,000
Hard Cost	None	1. Exterior daylighting	1. North facing skylights and
Impacts		shelves $80,000	light wells $120,000
		2. Interior daylighting	2. Floorplate reconfiguration
		shelves $60,000	with additional exterior
		3. Reduced	skin $120,000
		lighting density	3. Reduced lighting
		savings $40,000	density savings $60,000
Life-Cycle	None	1. Energy cost reduction	1. Energy cost reduction
Benefits		$15,000/year	$15,000/year
		2. Productivity/retention/	2. Productivity/
		absenteeism	retention/absenteeism
		enhancement	enhancement
		$100,000/year	$100,000/year

TABLE 8.10 EVA BENEFITS
CATEGORY/CREDIT	PLANET	PROFIT	PEOPLE
SUSTAINABLE SITES
Stormwater Design	Yes	Yes	Yes
Heat Island Effect	Yes	Yes	Yes
WATER EFFICIENCY
Water Efficiency Landscaping	Yes	Yes	Yes
Water Use Reduction	Yes	Yes	Yes
ENERGY & ATMOSPHERE
Optimize Energy Performance	Yes	Yes	Yes
On-Site Renewable Technologies	Yes	Yes	Yes
INDOOR ENVIRONMENTAL QUALITY
Construction IAQ Management	Yes	Yes	Yes
Daylight & Views—Daylight	Yes	Yes	Yes

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 operational cost factors. Operational costs such as energy, water, and maintenance are trending 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 certification. 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).

Figure 8.10 LEED sample project cumulative cash flow (5% benefit inflation).

Paul Shahriari, GreenMind Inc.

Figure 8.10 LEED sample project cumulative cash flow (5% benefit inflation).

Paul Shahriari, GreenMind Inc.

TABLE 8.11 CUMULATIVE CASH FLOW—0% INFLATION ON BENEFITS (ENERGY COSTS, WATER COSTS, OPERATIONS AND MAINTENANCE, AND SO ON)

LENGTH OF ANALYSIS	CERTIFIED	SILVER	GOLD	PLATINUM
Year 0	$70,500.00	$100,500.00	$145,500.00	$215,500.00
Year 1	$36,250.00	$40,250.00	$72,250.00	$132.250.00
Year 2	$2,000.00	$20,000.00	$1,000.00	$49,000.00
Year 3	$32,250.00	$80,250.00	$74,250.00	$34,250.00
Year 4	$66,500.00	$140,500.00	$147,500.00	$117,500.00
Year 5	$100,750.00	$200,750.00	$220,750.00	$200,750.00
Year 6	$135,000.00	$261,000.00	$294,000.00	$284,000.00
Year 7	$169,250.00	$321,250.00	$367,250.00	$367,250.00
Year 8	$203,500.00	$381,500.00	$440,500.00	$450,500.00
Year 9	$237,750.00	$441,750.00	$513,750.00	$533,750.00
Year 10	$272,000.00	$502,000.00	$587,000.00	$617,000.00

TABLE 8.12 CUMULATIVE CASH FLOW TABLE — 5% INFLATION ON BENEFITS (ENERGY COSTS, WATER COSTS, OPERATIONS AND MAINTENANCE, AND SO ON)

LENGTH

TABLE 8.12 CUMULATIVE CASH FLOW TABLE — 5% INFLATION ON BENEFITS (ENERGY COSTS, WATER COSTS, OPERATIONS AND MAINTENANCE, AND SO ON)

LENGTH

OF ANALYSIS	CERTIFIED	SILVER	GOLD	PLATINUM
0	$70,500.00	$100,500.00	$145,500.00	$215,500.00
1	$36,250.00	$40,250.00	$72,250.00	$132,250.00
2	$287.50	$23,012.50	$4,662.50	$44,837.50
3	$37,473.13	$89,438.13	$85,420.83	$46,945.63
4	$77,121.78	$159,185.03	$170,216.66	$143,317.91
5	$118,752.87	$232,419.28	$259,252.49	$244,508.80
6	$162,465.51	$309,315.25	$352,740.11	$350,759.24
7	$208,363.79	$390,056.01	$450,902.12	$462,422.20
8	$256,556.98	$474,833.81	$553,972.23	$79,463.31
9	$307,159.83	$563,850.50	$662,195.84	$702,461.48
10	$360,292.82	$658,318.03	$775,830.63	$831,609.55

When we assume an increase of 5 percent annually on the benefits side, the breakeven years stay the same, but the Gold project, for example, has 30 percent greater benefits over the 10-year planning horizon (Table 8.12). For an institution or large corporation that has a long-term owner-operator perspective, assessing costs and benefits over a 10-year planning horizon is not unusual. When the benefits are known or can be estimated easily, then the issue is not "should we do this," but "how are we going to pay for it?" In other words, the decisions are financial and not economic in nature, because the economic value is quite clear.