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Green Remodeling and Sustainable Design: The Economic Challenges

Architects have been traditionally reluctant to invest in green sustainable design because green construction adds an approximate 10 percent to the upfront cost of new buildings and any cost savings is long-term and, therefore, doesn’t benefit the builder.

However, there are also a number of economic challenges that are preventing builders from insisting that their homes are the product of green remodeling or sustainable design: green construction takes more time, costs more in upfront costs and the prices are relatively unstable.

Green Remodeling Takes More Time

An important economic consideration to the homeowner is time. A construction delay because of green specifications can be costly to everyone involved, while contractual and processing delays could become more common as green building requirements become more specific, as documented in a Singapore case study’s conclusion in the Journal of Professional Issues in Engineering Education & Practice.

A lack of funds to complete green remodeling in homes and offices is another barrier that both private and governmental sectors face. Many small businesses have high interest rates in relation to business improvements, so those businesses face a barrier in justifying improvements to their building when profits may not be realized. Even though governmental organizations do not face high interest rates, they still face additional barriers to borrowing for improvements according to a 2005 study published in the ASHRAE Journal.

LEED Design Standards a Start

Contrary to the United States, members of the European Union are required to have all new construction meet certain requirements pertaining to energy consumption, with a focus on green energy usage, according to Nicolai Ouroussoff of The New York Times (“Why are they greener than we are?“). The federal government has yet to establish any construction standards in terms of energy efficiency.

Adhering to the LEED standards is voluntary, which puts the responsibility to “go green” on builders and clients. Ouroussoff debates if LEED is as broad and impacting as it could be, as some of the building requirements are relatively easy and quick to achieve.

Sustainable Design and the Price of Energy

Another economic barrier to green remodeling projects is the volatile prices of traditional forms of energy. When energy is cheap and abundant, the payback period for sustainable technology becomes longer and the rate of return decreases, making the choice to implement green technology more difficult.

A slowing economy can also be a barrier to sustainable green design. The ASHRAE Journal report shows that because the payback period for the savings that green energy technology can bring is not instant, consumers in the building sector are not always willing to invest significant funds toward green remodeling when their business may not be operating in the future due to a poor economy.

With energy-efficiency programs from utility companies that are funded by rate payers, some of the upfront costs of installing green energy technology in residential buildings is supplied by the rate payers, making it possible for the changes to occur by lessening the immediate costs to the utility company. An economic downturn lessens the amount of funds these rate payers are willing to supply, according to an analyst published in The Electricity Journal. However, strategies to mitigate sustainable green building challenges are being actively developed now.

References:

  • Lam, P.T.I., Chan, E.H.W., Chau, C.K., Poon, C.S., & Chun, K.P. (2009). “Integrating green specifications in construction and overcoming barriers in their use.” Journal of Professional Issues in Engineering Education & Practice, Volume 135, No. 4, pages 142-152.
  • Lawrence, T.M., Mullen, J.D., Noonan, D.S., & Enck, J. (2005). “Overcoming barriers to efficiency.” ASHRAE Journal, Volume 47, No. 9, pages 40-47.
  • Barbose, G., Goldman C., & Schlegel J. (2009). “The shifting landscape of ratepayer-funded energy efficiency in the U.S. The Electricity Journal, Volume 22, No. 8, pages 29-44.

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