Fact Check: Does LEED Really Cost More?

Your Certification Strategy Is Key to Managing Costs

Fact Check: Does LEED Really Cost More?


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We conduct a deep dive into the costs associated with obtaining a LEED certification and show you our recommended top 6 ways you can lower your LEED costs to meet your budgetary needs.
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Let us first state the obvious: Yes, it costs money to achieve LEED certification for a building - just like it costs money to achieve any other sustainable building certification. We often hear blanket statements such as it will cost just 10% more to achieve LEED Silver. We often see "base building" costs for HVAC attributed to LEED in project estimates and cry foul when we do. In this blog, we fact-check the costs and provide a process of understanding how to articulate the value LEED certification can bring to your project.

Overview of Costs for LEED

To begin, there are registration and review fees for each project based on the rating system and the building’s square feet. A 1,500 SF project will pay the same in certification fees as a 50,000 SF building due to minimum review fees. Buildings above 50,000 square feet will be billed according to the per-SF fee for the certification process selected. At the low-end, a 50,000 square feet or smaller building will pay $4,920 for LEED BD+C certification fees (new or major renovation) and $2,850 for LEED O+M (existing buildings), with LEED ID+C (commercial interiors) coming in between. And of course, like all things in the sustainable building rating system world, the fees are subject to change. 

But beyond the registration and review fees, there are also other mandatory costs embedded in pursuing LEED certification, including required energy efficiency documentation and commissioning for new construction and renovation projects (BD+C). O+M for existing buildings requires an energy audit.

There are also soft costs associated with LEED documentation development and project management for all LEED project types. These professional services are priced by the provider and can vary. Yet, there are benefits that come from these requirements beyond the “LEED plaque” — energy models are required for many financial incentives or finance vehicles. Energy models can also help teams make decisions resulting in substantial operational savings and carbon savings. Commissioning catches flaws in the construction and design of energy-using systems (lighting, HVAC, hot water, etc.) and provides a mechanism to check the performance of those systems after construction. Commissioning is a risk mitigation strategy, which is why building codes require it and insurance policies reward it. 

There are costs to achieving LEED Certification (or any sustainable building certification), however, these costs come with a wide range of benefits for owners, occupants, contractors, and of course the planet. So not to worry - there are ways to minimize LEED costs and to help, we review our top 6 recommended steps to help you lower them for new construction and renovation projects. We also explore the costs for LEED Operations & Maintenance, which applies to buildings in operation for more than one year.

1) Clarifying the Added Cost for LEED

 

The first step in evaluating costs is clearly understanding what is in the base design and what is added specifically to meet certification strategy goals. For example, your building is likely going to include an HVAC system. Maybe you select a more efficient system as part of your certification strategy after reviewing the preliminary energy model results and seeing the operational benefits of alternative designs and the positive impact on LEED points. The differential for LEED is the additional cost of these efficiency improvements.

bicycle storageThis example applies to other commonly cited costs such as the Bicycle Facilities credit – including a few bike racks in the design may have been included in the base site design, but providing cover for long-term bike parking was not. The extra number of racks required for credit compliance and the covered system’s “additional cost” is attributed to LEED. Credit synergies are often found in design decisions. Keeping with the bike rack example, some choose to repurpose a shipping container to serve as long-term covered bicycle parking. Repurposed shipping containers are a bonus to a project because they will also count as reused material for the Sourcing of Raw Materials credit. 

Though it’s somewhat obvious, it is important to remember that a project’s added cost for LEED does not include the potential cost to achieve credits that are ultimately not pursued. For example, in a recent project we worked on, a builder included $800,000 in the estimates for renewable energy systems. Renewable energy was not needed to achieve the project goal of LEED Silver and was not a real consideration for the project. Making sure the estimates reflect the LEED Strategy is important so as not to overstate the costs. 

Within the last few years, more projects are exploring carbon neutrality and designing for minimum emissions impact. INTRO Cleveland’s Harbor Bay Ventures opted to pay for a building life-cycle analysis to understand the embodied carbon of its mass timber structure vs. comparable steel and concrete. The professional services required to conduct the life-cycle analysis were a LEED cost, but the mass timber was not – that was part of the base design. Two of the three points were an added bonus, where one credit point was awarded just for completing the analysis.  

2) Doing the Math Early Saves Money

When we consult with our client teams, we push (maybe nag) the design teams to run applicable LEED credit calculations early in design. What is the required number of parking spaces per code and what is the over/under based on design? Exactly how many SF of pedestrian hardscape is in the design? Exactly how many SF of restored habitat is included in the site? These simple calculations are among those that clarify which credits are achievable via the base design, site design, and project location versus those that require added construction costs.

For example, clarifying pedestrian hardscape areas early on can help estimate added costs for light-colored pavers, which help the project’s ability to treat stormwater on-site. It may or may not also contribute to a lower heat island effect, creating synergies between credits. 

water saving urinalsAnother LEED calculation that can be run early is the Indoor Water Use calculator -- the only information needed is the estimated occupancy (full-time employees, visitors, residents), general flush and flow rate goals (or preferences), and the general restroom layout (for example, will urinals be included in the project?). Once this information is known, the Indoor Water Use calculator can help the teams select specific flush and flow rates to meet LEED goals. From there, teams can create flush and flow rate specifications.

3) Location Matters 

Whether your project is in a dense urban area or is being developed on a large suburban or rural greenfield site, the location of your project can earn LEED points with no additional costs. Projects in urban locations can earn up to 11 points by being close to mass transit, restaurants, shops, parks, schools, and businesses and by having limited parking (Surrounding Density & Diverse Uses, Access to Quality Transit and Reduced Parking Footprint credits).

Rural and suburban projects are often not able to benefit from these credits but have more capability to pursue the Open Space, Protect and Restore Habitat, and Rainwater Management credits — some of which may already be included in the base design of the project. The sooner the project understands what may come more easily for it without “spending money”, the less money the project will spend. 

4) Brainstorming Sustainability (and LEED Points) 

Ultimately, a project will find itself brainstorming sustainable design options. And those options may or may not lead to LEED points. For example, the permeable paving that is central to an outdoor respite area may contribute to a lower heat island and help with stormwater mitigation, but it may not be big enough to cross the required credit thresholds. When owners know the benefit of certain design elements or have firm design criteria that support sustainable performance, it is easier to know when a choice will add cost for LEED.  

There is generally a point in the project where trade-offs are discussed. These trade-offs include comparisons of first costs to operating costs. A summary of prerequisites and credits that may have measurable soft costs and hard costs (in addition to potential design costs) are summarized below: 

  • Fundamental Commissioning and Verification & Enhanced Commissioning 
  • Minimum Energy Performance & Optimize Energy Performance 
  • Minimum IAQ Performance 
  • Bicycle Facilities 
  • Green Vehicles 
  • Protect or Restore Habitat 
  • Rainwater Management 
  • Heat Island Reduction 
  • Water Metering 
  • Advanced Energy Metering 
  • Demand Response 
  • Renewable Energy Production 
  • Green Power and Carbon Offsets 
  • Building Life-Cycle Impact Reduction 
  • Enhanced Indoor Air Quality Strategies 
  • Indoor Air Quality Assessment 
  • Thermal Comfort 
  • Interior Lighting 
  • Daylight 
  • Quality Views 
  • Acoustic Performance 

*Note: this list reflects the v4 BD+C rating system and is not inclusive of all potential costs. 

5) Timing is Everything 

Not only is it important to start early making LEED calculations, but it is also important to know what decisions can be made later in a project. When focused on managing a certification with a tight budget, a project may elect to wait until the construction phase to determine if it will act upon some strategies, such as signing up for the utility’s demand response program or installing covered bike-rack parking. co2 monitorSome projects find it easier to achieve certification goals by pushing some costs to the operating budget. For example, adding stand-alone CO2 and VOC monitors in key conference rooms may contribute to two points for enhanced indoor air quality and can be added late in construction or even after occupancy. Task lighting and desk fans that contribute to thermal comfort and lighting controls also can be added after construction is completed. 

Timing the certification strategy is also helpful for non-profits who may still be raising money for the project as it moves from design to construction – key elements can be segregated based on the ability to raise funds. For example, going to market with naming rights for a visible solar canopy may be a great way to raise the funds to purchase the solar – and push the project from Silver to Gold. Donors love putting their names on design elements that matter most. The decision to install solar canopies honoring Donor #1 can easily be added to a project later (so long as the early designs included the necessary infrastructure). 

6) Creating a Cost-Effective LEED Strategy 

We've said it before, and we'll say it again: starting early helps - especially when it comes to developing a cost-effective LEED strategy! It will help shape the design to meet an owner’s goals and will reduce costly change orders or redesign. A clearly articulated Owner’s Project Requirement with specific performance metrics helps the architects and engineers design a building that will perform to its goals. A late-in-CD inquiry about “the cost to achieve Net Zero” is going to lead directly to the discussion about adding costs and design changes. A project that starts with the goal of achieving Net Zero will be estimated accordingly. A project that carries Net Zero as a goal will not have added costs for energy conservation measures and will maximize its LEED points in the Energy & Atmosphere category. A project attempting to evaluate Net Zero on a building originally designed to code will focus on the costs for the points earned from individual elements contributing to a more efficient design. A Net Zero building will achieve many more LEED points than a building designed to be 5% better than code (the minimum required efficiency for a new LEEDv4 BD+C project). 

Another example we often see of decisions that affect the LEED strategy revolves around the 10-foot-long requirements for walk-off mats at all entrances for the Enhanced Indoor Air Quality Strategies credit. Projects that don’t design vestibules large enough for 10-foot-long walk-off mats will be faced with high costs and ripple-effect design or construction implications should that credit be needed to meet LEED goals. Projects that plan for this credit early face nominal costs for throw-down mats or carpet tile. 

As the bicycle storage example shows us, one decision can be a boost for others. There are several optional LEED credits, some with multiple compliance pathways. Emerald works to demystify and organize the costs going into each LEED level with our Credit Prioritization matrix, which also highlights synergies. This matrix details the costs that go into LEED prerequisites as well as each level of LEED. The cost of LEED is controllable and can be maximized to support broader project goals, especially when starting the LEED discussion early. 

The Cost of LEED for Operations + Maintenance

A building pursuing LEED O+M certification will have different decisions to make about costs than one that is a new construction, renovation, or commercial interior project. The LEED O+M rating system is primarily about actual building performance of at least 12 months and requires a renewal every three years. The majority of points are generated from performance data in categories of energy, water, waste, transportation, and occupant comfort. For example:

  • A building with efficient HVAC systems and upgraded lighting will perform better than others.
  • A project with regular occupants who walk, take public transportation, carpool, or drive EVs or hybrids will score better than one with gas-loving vehicle drivers.

But there are also optional credits. Once a building understands the points it will earn from performance, it can choose to invest in optional credits that may carry costs such as conducting optional air or water tests. Or, it may choose to change suppliers for cleaning products and ongoing consumables (paper, paper clips, pens, cups, etc.) that meet credit optional requirements. Our client, the Children’s Museum of Cleveland, which achieved LEED Platinum O+M, praises the sustainably-sourced green cleaning products they switched to that actually saved the museum money — and earned them a point for the Green Cleaning credit! Or, a project may opt to implement a significant capital improvement project such as new air handlers, and wait for the performance to improve, thus raising its score. 

Get a Handle On the Costs Of Your Project

We are often asked to tell project teams what percentage of their budget they should allocate for LEED or provide a hard number with the total ‘LEED Costs’. In our opinion, that is an uninformed way of approaching costs. The key is to align investments with the project goals, the owner’s project requirements, and timelines. Focusing on no-cost credits, answering easy questions early, and taking the time to evaluate design options always results in a lower-cost LEED certification process.  

Ask us for help. With over 21 million SF of sustainably certified space under our belt, it’s clear we’ve helped clients find a cost-effective path to achieving their goals. 

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