Are green buildings economically sustainable? a LCC approach

Abstract

In the context of Sri Lanka, the number of green certified buildings is still at a minimal level and the reason could be attributed to green building investors who continue to perceive that green buildings are costly and the initial cost premium ranges from 20 to 25% and fail to appreciate the subsequent benefits in terms of running costs. However, in the global context, researchers have indicated that green building construction cost varies largely between -15 to 21% while only a little information is available on the status of operation and maintenance costs reduction. As part of the larger study which investigates the impact of sustainable features on life cycle cost of green buildings, this paper presents a comparison on life cycle cost of green certified industrial manufacturing building with that of a conventional building to establish the economic sustainability of green buildings. Quantitative data on the construction and running costs of green and conventional buildings were collected and analysed using Net Present Value. The analysis shows that the construction cost of green industrial manufacturing building is 28% higher than that of a conventional building while the reduction in running costs is 39%. Overall the green buildings offer an economic benefit of 50% savings over its life time. It is expected that the outcome of this research would contribute to the organisational learning of green built environment and thereby uplift the sustainable construction.