Crunching the Numbers: A Conceptual Cost Estimating System for LEED Facilities
How to estimate the cost of a LEED facility, determine the affordable certification level, identify the most cost-effective credits, and calculate paybacks—in two seconds.
Ever since a sustainable design team first discussed the U.S. Green Building Council’s (USGBC’s) LEED (Leadership in Energy and Environmental Design) certification system with their first potential “green” client, the question that has been on every client’s lips has been, “How much will it cost?”
Usually, the design team will say something like, “Well, the up-front costs for a high-performance office building average about 1% to 2% of the overall budget, but you’ll save money, in the long run, on operation and maintenance—perhaps 20% over the building's lifetime …”
And the client replies, “Sounds good; but how much will my project cost and how much will I save?”
Recently, a system has been developed to conceptually estimate the costs and savings associated with designing and building a LEED facility: construction cost; savings; payback period; design fees; LEED submittal design costs; and total credit cost for each LEED certification level—Certified, Silver, Gold and Platinum. Moreover, the system completes the calculations in less than two seconds.
Development of EarlyEco
After designing a number of LEED sustainable buildings, the authors sought a systematic way to estimate costs early in the design process to enable the design team to identify the most cost-effective and sustainable LEED credits for any given project. However, LEED credits vary significantly in relative costs, and the challenge is compounded by both the sheer numbers—and possible combinations—of LEED credit/options, building types, sites and client budgets.
To the authors' knowledge, analyses of the cost of LEED-certifiable construction have focused on retrospective studies of completed buildings or comparative modeling of hypothetical buildings rather than on prospective conceptual cost estimating of an actual project.
Thus, the authors’ solution was to develop a database using an Excel spreadsheet and then customize versions for different building types. The process for using the system could then be further quickly customized for each site. The firm’s proprietary software estimating system, eSpec, was used to develop a base building conceptual cost model for a non-LEED building from 25 attributes. A second system, EarlyEco, was then developed to analyze the cost of LEED line items. EarlyEco input parameters are only 28 currently. Finally, an output spreadsheet was developed that collects and analyzes the data from the first two systems and provides the report for the design team.
The current EarlyEco system has been customized for numerous building types; the latest is a version for research laboratory design.
A spreadsheet is used to organize the LEED design attributes, including costs and savings.
In developing the database for each one of the LEED credits, the key attribute is cost per square foot. The firm’s existing project estimating database was helpful in developing the cost per square foot of each LEED line item, and these figures continue to be updated and refined as additional data from completed projects become part of the data base.
In addition, the authors consulted with laboratory consultants, mechanical, plumbing, electrical, civil engineers, interior designers and landscape architects to verify cost per square foot figures, as well as the basis for estimating costs of professional fees.
Refinement and testing
As the system was developed, various sources were consulted and each line item was repeatedly analyzed to ensure that the costs were realistic and defendable. Not only were the costs developed for each credit, the costs were also developed for each option under each credit. The process required the skills of a master conceptual cost estimator, not just a good cost estimator.
EarlyEco was then beta tested on a few projects to refine both the costs and the sustainable design process and procedures. The testing process confirmed that the system can be used to make decisions in a logical, linear fashion starting with known parameters.
Sustainable design team goals
It is essential to begin every LEED project with sustainable client goals, since the particular goals determine the design process. If a goal is to complete a Certified LEED facility on a tight budget, then, obviously, the team should not investigate those LEED credits that are the most expensive. LEED credits vary from a net $10,000 savings to $250,000. If, on the other hand, the design team is working with a client whose goal is to obtain the highest LEED rating possible, then, theoretically, the design team will investigate all possible LEED credits to identify the maximum number of LEED credits that can be achieved. The LEED Accredited Professional, working with the design team, identifies the goals and the design process to achieve those goals.
Early informed decisions
Using EarlyEco, it is possible to use the LEED credit costs and sustainability index to make informed decisions that are both cost-effective and sustainable very early in the design process. The following process has been found to work well:
- Develop the client’s sustainable goals.
- Define the process to achieve those goals.
- Define the 20 key EarlyEco building input attributes.
- Input key attributes into the EarlyEco system.
- Perform EarlyEco computer run.
- Chief cost estimator and LEED Accredited Professional review credits to customize the data to the site parameters and unique site costs.
- Obtain revised computer run and present to client team/design team.
- Working together, client team/design team refines the information and agrees on LEED credits and costs.
- Perform final EarlyEco computer run with final credits and costs.
- Obtain final approval by client.
- Expand EarlyEco spreadsheet to calculate total consultant fees.
- Complete final sustainable contract or contract amendments for fees.
Refining design and cost estimate
The design process continues through schematic design, design development, and construction documents. During the process the design is refined and the LEED cost information is developed into a refined statement of probable cost. It is prudent to anticipate some difficulties during the design process and LEED submittal process and, therefore, to include a contingency of at least two extra LEED credits to ensure that the desired LEED certification level can be achieved.
It is also essential to keep the design team focused on only the sustainable products that support the agreed-upon LEED credit solution. Otherwise, the project may be over budget, containing more sustainable elements than agreed to or conceptually estimated.
A case in point
To gain a better understanding of the output of EarlyEco, consider the recent project for a laboratory project, the LEED Certification level is still undetermined.
A few explanations and caveats are in order:
The unit cost per square foot, as stated above, is generated using a set of formulas that define this specific building. It is not applicable to other buildings with other site and building conditions. This number can be manually changed when reviewed by the chief cost estimator and the LEED Accredited Professional when they jointly review the printout line item by line item.
Approximate relative first costs show savings are noted in parentheses.
In the column under annual savings for the energy & atmosphere credits optimize energy performance, note that savings and costs vary, usually in direct proportion to one another. Similarly, the simple payback (in years) varies by credit. The objective is to select credits that are low cost, have fast payback and have low cost per sustainable unit. EarlyEco enables the designer to do this early in the design process.
Finally, the sustainable index is a measure of relative sustainability. This number is subjective, representing this firm’s judgment of the relative sustainability of each credit. The higher the sustainable index number (from 1 to 10), the more sustainable is the credit. Cost per sustainable unit is obtained by dividing the square foot cost by the sustainable unit index. This will tell the project design team the relative cost per sustainable unit for each credit. The objective is to select wisely to achieve effective sustainability for the most reasonable cost.
The base document for developing EarlyEco was the LEED for New Construction rating system v. 2.2, however the information that is contained the article has the proposed LEED for Laboratory credits shown in bold. The LEED for Laboratories has not yet been approved; when it comes out these credits may have to be adjusted as per the final parameters in the final LEED for Laboratories. The number of credits may also have to be adjusted.
The team’s conclusions
In this case, the design team thought that it was also important to use this generalized information to further understand the relative cost between Certified, Silver, Gold, and Platinum accreditation levels. The lowest-cost credits with the fastest payback were used to generate the following figures:
- Certified Level (26 – 32 points): Credits pursued 28; total lowest additional cost (approximately); $1,699,670 (3.01% of the cost of the facility); $11,182 average cost per credit; annual savings per year $438,511.; 3.88 years payback; cost per square foot $11.29; 20 years savings $8,770,220 and inflation rated $14,499,784.
- Silver Level (33 – 38 points): Credits pursued 35; total lowest additional cost (approximately) $2,472,297 (4.38 % of the cost of the facility); $13,081 average cost per credit; annual savings per year $484,099; 5.11 years payback; cost per square foot $16.42; 20 years savings $9,681,972 and inflation rated $16,007,183.
- Gold Level (39-51 points): Credits pursued 41; total lowest additional cost (approximately) $3,635,902. (6.45% of the cost of the facility); $16,232 average cost per credit; annual savings per year $572,940; 6.35 years payback; cost per square foot $24.15; 20 years savings $11,458,798 and inflation rated $18,944,805.
- Platinum Level (52 – 69 points): Credits pursued 54; total lowest additional cost (approximately) $6,309,105 (11.19% of the cost of the facility); $21,030 average cost per credit; annual savings per year $786,159; 8.03 years payback; cost per square foot $41.90; 20 year savings $15,723,180 and inflation rated $25,995,098.
Remember, figures for other projects will vary since these are generalized costs where the lowest credit costs were used. Project parameters might be such that some of the lower cost credits are not applicable to that project. The project costs will probably be slightly higher that the ranges shown above.
The bottom line
When clients ask, “How much will it cost?” they deserve the best answer that we, as design professionals, can give them. Years of experience have been distilled into a tool that conceptually estimates the costs and savings associated with designing and building a LEED facility. And, thanks to the wonders of modern software tools and computing power, it can crunch the numbers in less than two seconds.
MHTN Architects, Inc. Salt Lake City, Utah, 800-342-8991 ,
Published in R & D magazine: Vol. 50, No. 1, February, 2008, p.26-27.