Productivity Gains

In the service economy, productivity gains for healthier indoor spaces are worth anywhere from 1 to 5 percent of employee costs, or about $3.00 to $30.00 per square foot of leasable or usable space. This estimate uses average employee costs of $300 to $600 per square foot per year (based on $60,000 average annual salary and benefits and 100 square feet to 200 square feet per person).5 With energy costs typically less than $3.00 per square foot per year, it appears that productivity gains from green buildings could easily equal or exceed the entire energy cost of operating a building.

Figure 6.3 shows that median productivity gains from high-performance lighting are 3.2 percent in 11 studies analyzed by Carnegie-Mellon University in Pittsburgh, or about $1 to $2 per square foot per year, an amount nearly equal to the cost of energy.1 This benefit is in addition to a reported average savings of 18 percent on total energy bills from proper lighting. For corporate and institutional owners and occupiers of buildings, that is too much benefit to ignore during the design process.

*Natural Resources Defense Council [online] www.nrdc.org/cities/building/nnytax.asp[0], accessed March 6, 2007.

*Personal communication, Lynn Simon, Simon & Associates, February 2, 2007. Also see US Department of Energy [online], www.eere.energy.gov/states/news_detail.cfm/news_id=9149, accessed March 6, 2007 and http://www.leg.state.nv.us/22ndSpecial/bills/AB/AB3_EN.pdf, accessed March 6, 2007.

*U.S. Department of Energy [online], www.energy.gov/taxbreaks.htm, accessed March 6, 2007. ┬žEleven case studies have shown that innovative daylighting systems can pay for themselves in less than 1 year due to energy and productivity benefits. Vivian Loftness et al., Building Investment Decision Support (BIDS) (Pittsburgh: Center for Building Performance and Diagnostics, Carnegie Mellon University, n.d.), available at http://cbpd.arc.cmu.edu/ebids, accessed March 6, 2007.

"Carnegie Mellon University, http://cbpd.arc.cmu.edu/ebids/images/group/cases/lighting.pdf, accessed March 6, 2007.

Investment Green Buildings

Figure 6.3

STUDY 2 STUDY 3 STUDY 4 STUDY 5

Productivity gains from lighting improvements.

Center for Building Performance and Diagnostics, Carnegie Mellon University. EBIDS: Energy Building Investment Decision Support Tool.

Figure 6.3

STUDY 2 STUDY 3 STUDY 4 STUDY 5

Productivity gains from lighting improvements.

Center for Building Performance and Diagnostics, Carnegie Mellon University. EBIDS: Energy Building Investment Decision Support Tool.

Look at it this way: If a building owner could get a 10 percent improvement in productivity from a green building, or about $30 to $60 per square foot increase in annual output, it would almost always pay for that company to build a new building and have employees to work there. In other words, the productivity increase could pay for the entire building! Even a 5 percent improvement in productivity would pay for half or more of the rent or cost of the new green building. What, then, is the business case for a "brown building," a standard building without these benefits?

In 2003, a detailed study of 33 LEED-certified green buildings provided a 20-year "net present value" calculation for the various categories of green building benefits.* In that study, productivity and health gains provided more than two-thirds of the total benefits of green buildings in this analysis. Energy and maintenance savings provided an additional 20 percent to 25 percent of total benefits.1. The concept of using net present value (the discounted value of all project cash flows) has greatest relevance for long-term owner-occupiers of buildings, such as government agencies, large corporations, universities, schools, and nonprofits that are likely to enjoy the full benefits over time.

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Renewable Energy Eco Friendly

Renewable Energy Eco Friendly

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable.

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