Cost of LEED Buildings in India: 6 Ways to Control Costs

Post date: Feb 10, 2013 4:12:52 PM

Madalam asks: Sir, i am a civil engineer working in State Bank Of Hyderabad. We are proposing to construct a new head office complex (project) at Hyderabad with 2 lakh built up area in 5 acres of open plot. It is commercial building for head office departments of state bank of Hyderabad with mixture of various types of offices like --Bank branches and ATMs (15% area ), corporate training units(15%), supporting back office departments in corporate office (40%), guest house (10%) , recreation facilities (10%) and parking garages etc (10%). now my question is -- What is the estimated cost of construction(for all civil works excluding interior works) per sft of green building of platinum rated)? what is the cost/sft of construction of same project in case of gold rated building? What are the differences in parameters of platinum and gold rated buildings? For approving the project in principle, top management of the bank needs this information? Detailed answers are requested?

Advice provided by: Yusuf Turab, Y T Enterprises

Dear Madalam,

Many thanks for your question and congratulations on the initiative taken by your bank.

First of all I would advice you to refrain from making proposals based on sq ft costs as they are very relative and can never be the same from project to project. There are many different strategies that can be employed in making a building green and complying with the targeted LEED credits and each one requires a separate cost benefit analysis. So it is almost impossible to come up with sq ft costs.

I have provided some general information on the cost of getting a LEED India NC certification and I suggest you prepare a proposal for your managers based on this information as opposed to sq ft costs of a green building which is unlikely to be accurate.


LEED Certification in India

Earning a LEED certification for a project involves several different types of costs, and you have to consider each separately to get an accurate picture.

1. LEED Certification Fees

The most direct cost is also the smallest: the fees you pay to the Indian Green Building Council (IGBC) to register and then to certify your project. These are roughly Rs.350,000 to Rs.500,000 for a New Construction.

- Parking areas need not be considered as part of the built-up area.

- Fee is inclusive of service tax.

- Registration and Certification fee are non-refundable.

- Membership discounts can be availed only if the project owner is a member of IGBC

2. Cost of Documentation: Time and Effort

Next up the cost pyramid is the time and effort that someone has to put into compiling and submitting the LEED documentation and generally managing the compliance process. This requires the establishment of a tracking and reporting system (often performed by a LEED consultant, rather than the design and construction team itself) and the tracking down of information that otherwise is not standard practice in specifying or sourcing systems and materials.

This cost could be for an outside consultant hired just for that task, someone on the staff of the design firm, the contractor, or the owner. This is a big project for someone not familiar with the rating system, and I recommend hiring a third party consultant who has figured out the process and created or purchased effective tracking systems.

A LEED consultant will base their fees on the number of hours expected to complete the project. Based on past experiences an average of 400 - 500 work hours was required in order to complete all of the LEED documentation necessary for certification. A very low quote may mean that the consultant has underestimated the time needed to complete the job. A very high quote could mean they don’t have systems and processes in place to execute the job efficiently or they’ve added a contingency to allow for a lack of green experience on the design team.

It helps if the rest of the contractors and designers are familiar with LEED and each one doesn’t need too much coaching to provide their pieces of the documentation. It also depends how many credits you’re going after, and, to some extent, which ones. A few hundred hours to pull everything together for a big complicated project is not out of the ordinary; simple and small projects should take less time and effort.

3. Cost of Extra Research and Design

At the third level, your baseline starts to become very relevant.

If your baseline represents the costs to have a design team create a variant on their last few non-LEED projects, then designing to meet LEED standards will take some extra effort. But these added costs shouldn’t be attributed just to LEED—they are the costs of getting a better building.

To realize any high-performing building the team has to develop a range of scenarios, run simulations to determine how they will perform and prepare cost estimates to price them out. They also have to investigate alternative products and materials and explore the feasibility of new technologies. All these steps take time and effort—how much depends a lot on how experienced the team is and how aggressive the performance goals are for the project.

Using the base design, the design team should run multiple simulations trying different ECMs (Energy Conservation Measures) and suggest certain changes to the design (e.g. finding the right balance between introducing day light to save on the lighting load and introducing too much day light causing heat gain and putting additional load on the cooling system). This can be a time consuming process specially doing a cost benefit analysis of each of the ECMs and calculating the payback period. Only some ECMs may have incremental cost attached to them, consider a 3 year payback to be good and anything above 7 years is usually not recommended.

It needs to be appreciated that this service is not directly linked with the LEED facilitation and in some cases may be charged separately depending on the complexity and quality of the base design.

4. LEED Commissioning and Modeling Costs

LEED introduces a few requirements that add costs if they are not already part of the scope of the project. The most obvious of these is commissioning.

Commissioning involves an outside team of individuals that is not part of the design and construction team. In general, the cost of commissioning new buildings can come up to 0.5 percent of the total construction cost for relatively simple projects such as office buildings like yours.

Commissioning may seem like a big investment, but it’s cheap compared to the cost of call-backs, fixes, and inefficiencies that are likely if you don’t do it. For this reason, many large owners, including some departments of the Government of India, require commissioning for all of their projects, so for them it is not an added cost.

Energy modeling is trickier. While energy modeling should be used to inform the design process for every building, they are most useful during early design phases (as mentioned in the previous point). The models that have to be run for LEED documentation, on the other hand, are an added step, done late in the design process and often with different parameters.

The LEED-specific model does represent an added cost that starts at Rs 2,00,000–4,00,000, depending on the complexity of the project. For small projects it is possible to earn a few LEED energy points using the prescriptive path without doing such a model. Energy modeling is the most important part of the LEED facilitation process as it is the best way to demonstrate energy efficiency in a building. It is also the most complicated and is prone to errors.

The above four categories contain most of the soft costs, which are effectively the overhead costs of the LEED process. While these costs do not yield any direct benefits, they represent the price that must be paid to get into the LEED system and to fulfil its requirements.

Measurement and Verification Plan

Another LEED-specific action—tied to an optional credit, EAc5 in LEED-NC—is to create a measurement and verification (M&V) plan and install monitoring devices needed to track performance. If you wouldn’t be doing this, then the monitoring equipment and writing and implementing the M&V plan require cost premiums. Like commissioning and energy modeling, M&V brings benefits—it’s the only way to know if your high-performance building is really performing as designed. I recommend hiring experienced energy auditors to carry out the M&V work.

5. The Cost of Construction

Finally, we get to the top of our inverted pyramid, and what might be the biggest part of the cost picture: the hard costs of construction and the cost of greening the building.

This cost represents the premium over traditional construction that a green building would have embedded in its construction costs. The elements of these costs vary as widely as the LEED certification criteria. They may include additional site work and structures; additional infrastructure costs related to transportation; different heating, cooling, and ventilation systems; roofing; lighting; water use; recycling services at the site; and sourcing specific construction materials (from regional sources, recycled content, or certified forests).

If the design team is experienced and the goals aren’t too aggressive, there may be no overall added cost because every cost premium has been offset with savings somewhere else. (For example, a smaller HVAC system resulting from a more efficient building envelope).

We know this is possible because lots of projects achieve LEED certification on budgets that were set before LEED was introduced as a requirement. However, various case studies have targeted a typical premium for LEED projects at 2%–15% in India, with the high end including a lot of on-site renewable energy generation.

Managing Costs of Construction

To manage those costs you have to know, at least roughly, the price of a range of specific measures. It helps to know the following for example (this is only a small list for your reference):

  • Demand-controlled ventilation adds about R.s.50/cfm to the cost of a standard ventilation system
  • Bike racks will cost about Rs.300 per full time occupant.
  • Showers and changing rooms will cost about $400 per full time occupant.
  • Cool roof paint can cost up to Rs.30 per sq ft excluding labour cost
  • High performance glass is at least Rs.30 per sq ft costlier than regular plain glass.
  • Solar energy systems can cost close to Rs.1,50,000 per KW capacity
  • Branded Eco-friendly furniture has at least a 15% premium attached to it.
  • There is a cost attached to training contractors and workers to ensure they track waste generated on site.

LEED Cost Management and Conclusions

We know that these extra costs can be contained to a large extent at the design stage by following the six (6) basic principles as listed below:

1) Nail down and document the functional requirements of the building early. Make room for early input from the mechanical, electrical, and LEED consultants even before the site plan is prepared.

2) Make sure everyone on the design team understands their responsibilities with respect to the LEED process and is committed to an Integrated Design Process.

3) Insist on very systematic and professional management at the design stage as well as the construction stage. Online collaboration and project management tools are an excellent aid.

4) Keep the mechanical / electrical systems as simple as possible.

5) Avoid complex technologies that have little chance of being operated correctly once the building is occupied.

6) Keep the owner engaged and informed, understanding the nature and impact of decisions being made to achieve competing goals.

More effort on the design will lead to fewer problems and lower costs overall. Buildings at the higher end of the cost scale will be those that didn’t follow these fundamentals of green building design.

With our focus on costs, it is easy to lose sight of the fact that many of the investments made to earn points under the LEED system or to green a building pay for themselves over time.

We have not analyzed the benefits of LEED as part of our scope, but we believe it is important to balance the discussion of costs with an understanding of the benefits.

These building improvements are also credited with enhanced working conditions and productivity for building occupants. Promoters of green buildings attribute massive benefits to projected reductions in sick time and improved productivity resulting from better office conditions such as lighting and air quality. A green building certification like LEED India can also offer the building owner and his business excellent opportunities to market the building for its quality and efficiency along with its reduced carbon footprint.

If Bank of Hydrabad wants to show its customers that it is an environmentally conscious bank, then a LEED India Certification might be a good place to start.