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Cost of Green Building in India: What is the Payback Period?

posted 10 Feb 2013, 08:19 by Yusuf Turab
Surendran asks: I am a student doing final year architecture in India, I am interested in practising sustainable architecture. i would like to know about the details of the extra cost incurred and the pay back period for residential projects. is there any minimum built-up area so that the sustainability can be practised in residential level?

Advice provided by: Yusuf Turab, Y T Enterprises

Hi Surendran, thank you for your question. “What is the cost of green building?” is one of the most common questions asked of green building professionals.

First of all, congratulations on making the smart decision of pursuing green architecture. I think that this term is more accurate than “sustainable architecture”. A building requires a great deal of materials and processes to meet it’s most basic function, which is human comfort. No building can truly be sustainable unless we go back to the Stone Age.

The idea of green building is to limit the impact on the environment without compromising human comfort. Green building aims to achieve more with less, which is what makes this sector so interesting. I have been consulting for just over a year now and it is very satisfying to see that some of our ideas make a meaningful difference.

The Growth of Green Building

I recently received the following statistics from a World Green Building Council mailer. It says, "In 2003, only 24% of construction firms worldwide were significantly involved with green building. In 2013, 94% of the firms are expected to be significantly involved with green building; more than half of the firms will be largely or exclusively dedicated to green building”.

While this is great for the sector, it also means that there will be increased competition, copying, green washing and lack of differentiation in projects. Therefore, one’s success in the industry will depend on how one can differentiate him or herself and the pace at which he or she innovates.

The report has many other interesting statistics that indicate trends in the green building sector. For the convenience of readers, I have made the report available here for download under “Statistics on Green Buildings”.

Costs and Payback Period of Green Buildings

Since this question is asked often, most green building professionals will simply state that most green buildings have an added cost of 5% - 15% (compared to a conventional building) and that the payback period is usually 3 - 5 years.

While this is true in many cases, I personally believe the cost of going green is relative and cannot be accurately quantified. I know developers and building owners who always use high performance building design and materials, efficient lighting and HVAC, wastewater treatment, rain water harvesting, waste management and other green building materials and techniques. They simply believe that it’s common sense to build that way. For such builders, the cost of going green is minimal or nonexistent, since they would have spent this additional amount anyway.

That being said, many developers do not automatically incorporate green building strategies. The following list indicates some of the features and building practices that might require an investment that is significantly greater than those for conventional buildings practices in India:

Cost of Green Building in India

Renewable energy: Costs can vary between Rs. (Indian rupees) 150 - 250 thousand per KW capacity.
Additional design time: This can vary, but the design time might be significantly greater if the project team chooses building simulation to achieve building efficiency.
Building envelope: The building envelope includes materials such as high performance glazing and windows, insulation, green roofs and shading devices.
Building materials: Incorporating environmentally conscious materials can sometimes be tedious and costly. The project team should try to use the most efficient lighting, low flow bathroom fixtures and other materials that are salvaged, recycled or rapidly renewable.
Green building certification: Many green buildings are certified. Most green building rating systems and certifications require a fee and an additional consultant.
Water management: A truly green building will have a rainwater harvesting system. Most green building projects also include a decentralized wastewater treatment system.
High performance HVAC and controls: An air conditioning system with a high coefficient of performance (COP) will cost more upfront, but the payback is usually fast enough to easily justify purchasing the system. While there are low cost technologies available for this, very few people seem to be aware of their existence.
Worker training: Workers will need training so that they minimize damage to the site during construction. They will also need to be informed about construction waste management practices and other pollution control measures.
Operation and maintenance: The building owner will need to ensure that the building continues to be green after it is commissioned. This requires practices such as waste management, building performance measurement and reporting, eco-friendly cleaning practices and landscape maintenance.

This list is based on my personal experience and I am sure there are many points that I’ve missed. I chose not to mention green building practices that do not increase costs significantly. Readers can add to this list the comments section below.

If the project is aiming for a green building certification, there might be other non-environmental expenses such as disabled friendly facilities, basic facilities for workers and commissioning for MEP systems. I only call these “expenses” because they are not standard practices in India (though they really should be).

With this focus on costs, it is easy to lose sight of the fact that many of the additional investments in green buildings pay for themselves over time. Almost all the above features and practices pay for themselves well within 5 years. The exception is renewable energy installations, which might take between 12 - 15 years to pay back. It is important to balance the discussion of costs with an understanding of the benefits.

Green buildings have also been shown to improve worker productivity due to better office conditions, such as controllable lighting and better air quality. Additionally, the building owner can market the green building for its quality, efficiency and minimal carbon footprint.