LEED Not Right for Everyone

The U.S. Green Building Council has done an admirable job bringing environmentally friendly design and construction into the main stream.  Due in part to the efforts of USGBC, “Green” (voted most overused word in 2008) is now a well-used adjective, rarely used to describe someone’s eyes, but more often used to describe someone’s recycling habits.  Green is not going away.   And that’s good!

It is believed that the American public reached the tipping point in 2009 with regards to their opinion on green.  A GfK Roper Consulting Report found that three-quarters of consumers believe every large company should be required to prepare an annual report on its impact on the environment.  The same study found that a large majority of consumers say a company’s environmental practices are important in making key decisions, including the products they purchase, where they shop, where they work and where they invest their money.  Four in ten Americans are willing to pay for a product that is perceived to be better for the environment.  Source:  2007 GfK Roper Green Gauge® Report.

The USGBC (no, it’s not an arm of the United States government as its name might suggest) has become a leader in green design mostly through it’s L.E.E.D. (Leadership in Energy and Environmental Design) program, an intense certification process where buildings are submitted for review and awarded points based on various environmental criteria.  The more points awarded, the higher the level of certification, from “Certified” (lowest), “Silver”, “Gold”, and “Platinum” (highest). The USGBC certification has become a symbol of achievement and a source of pride for owners and architects alike.  It represents the successful completion of a long, arduous process that does not come cheaply.  The plaque on the wall can:

  • Attract knowledgeable tenants/buyers
  • Increase a building’s value
  • Bring much-needed publicity to a project, although this is decreasing with the increase in number of LEED projects.
  • Paint the producer in a favorable light.

Those are not bad reasons to pursue LEED certification.  In my opinion, these are the ONLY reasons that make economic sense, however.

The problems that my clients have with USGBC and its LEED program deal with their cost-to-benefit analysis.  The LEED certification process costs money – a LOT of money, relatively speaking.

By way of example, let’s take a 20,000 sq. ft. speculative office building:

  • USGBC Project registration fee:  $900 for members, $1200 for non-members
  • USGBC Design & Construction Review:  $2250 for members, $2750 for non-members (add $10,000 for expedited review)
  • USGBC Credit Appeal:  If you want to appeal a denial of a particular credit – $500 each.
  • A/E Coordination:  In speaking with many Architects and Engineers, they have stated that they have to charge increased fees to deal with the mountain of paperwork involved with the “back-and-forth” with USGBC, detailing recycled materials documentation, sources of material production, etc.  On our example 20,000 sq. ft. building, that can add $5,000-10,000.
  • Commissioning:  The cost for an independent, 3rd party to review documents, perform system testing, and prepare reports can cost $0.50-$1.50 per square foot, and add $15,000 to $20,000 to a 20,000 sq. ft. office building.  (Admittedly, Commissioning is a necessary, but often omitted service, and one not uniquely appropriate for LEED projects.  Commissioning can help give the Owner a sense that all building systems are performing as specified:  HVA C equipment, the building envelope, electrical systems, etc.) 
  • Once leased, each subsequent office suite fitup would be certified separately, each with their own LEED application fees, certification fees, etc.

So, even if you forget about Commissioning, USGBC LEED projects can cost up to $15,000 to 25,000 (and up) more than a project designed the exact same way, but without the certification process.  Now, when looked at as an overall percentage of construction cost, LEED certification is a miniscule cost:  1/2 of a percent.  That is not a bad deal if you are doing it for marketing purposes.  In our experience, when everything else is equal, LEED certification can tip the scales in one building’s favor over another.  But, the vast majority of tenants are not willing to pay extra for the LEED certification at this time.

Options?  Other green programs exist that can have similar marketing potential but also have other benefits that USGBC’s LEED program does not.

For instance, U.S. Environmental Protection Agency’s Energy Star program is a well-known program in the construction and real estate communities.  It is based on superior energy performance criteria, acknowledging that maximizing energy efficiency is one of the best ways to protect the environment.  Energy Star is a FREE program, as it is government-sponsored.  It is also possible to obtain favorable home mortgage arrangements based on a project’s Energy Star status.  More detail regarding the differences between LEED and Energy Star can be found here.

Green Globes is another alternative to LEED.  In the U.S., Green Globes is run by the Green Building Initiative.  Green Globes is a software-based, online tool for certifying green buildings.  It appears to be much more user-friendly than LEED, and at significantly lower cost.  An informative blog documenting the differences can be read here.

Many more options exist, but are certainly lesser-known than those mentioned above.

USGBC’s LEED program is certainly the most popular program in the United States right now, and is getting the majority of the press.  The LEED program makes the most sense for building owners IF the primary reason for achieving some level of certification is for marketing purposes.  However, it is still the most expensive and most complicated process, in my opinion.  Ultimately, none of these programs are perfect, none guarantee a high performance building, but ALL can be utilized to take the ever-important steps to designing and constructing a sustainable building.


One thought on “LEED Not Right for Everyone

  1. Pingback: Personally Speaking « My Green Ass. Blog

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