Using Life-Cycle Costing to Evaluate A Green Building Project and Building Materials
Life-Cycle Costing is
an accounting and management process that has been used in business for
some time to evaluate capital expenditures and projects. This tool can
be useful in evaluating the true cost and payoff of a business decision
over the life of a project. In this example of LCC use, we consider the
Life-Cycle Cost of a green building project and various building
materials.
According to LifeCycleCosting.org, LCC is "a methodology to evaluate
the
economic performance of investments in building and building systems."
The process of Life Cycle Costing has been around in business for some
time as a tool to evaluate capital expenditures and projects. It is a
process of accounting that considers costs associated with initial
monetary investment, operation costs, maintenance and repair costs,
replacement cost, and the residual value of a given building, project,
development, or equipment installation.
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As applied to green building materials, LCC is useful in evaluating
both
the initial monetary expense of a material, but also the initial
embodied energy costs, the durability of the material, the potential
energy savings over the lifespan of the material or installation, the
improvement in environmental quality, and the effects of the material
on
building occupants. In addition, the potential for re-use or recycling
of the material can be evaluated as a part of the LCC evaluation.
As an example of Life-Cycle Costing analysis of a hypothetical single
family residence situation, let's look at a planned home that is to use
heavy timber-frame construction and straw bale infill.
To fully appreciate the costs of using timber frame using LCC, the
initial costs of the raw materials used in a timber frame structure
must
be evaluated (high cost) as must the fact that a large amount of heavy
timber (often older growth trees) must be harvested for a single home.
In addition, the embodied energy associated with harvesting, milling,
and transporting heavy timber building members is high.
On the other hand, the timber frame design has the potential to greatly
outlast the useful life of many other potential framing materials. And,
once the useful life of a timber frame building has been reached, the
building members have a high possibility of re-use in another building
with minimal additional energy investment.
Likewise, straw bale infill of the building walls will have a minimal
initial cost in materials. The straw bale material is essentially a
waste product and therefore is resource efficient. Embodied energy
involved in harvesting, and transport is similar or less than other
building materials. In addition, a straw bale building does not require
additional foam, fiberglass, or cellulose insulation and the interior
air quality of a straw bale home is typically excellent.
On the negative side of the equation, straw bale building is extremely
labor intensive, usually requires large amounts of high embodied energy
Portland cement in the stucco and plaster wall treatments, and requires
additional labor in electrical and plumbing work.
Still, over the life of a typical residential structure, straw bale
walls will have the potential to save enormous amounts of energy and
money in heating and cooling efficiency. The question then for this
example green building project using timber-frame and straw bales, is
whether or not the initial monetary cost, energy cost, and labor cost
of
the project, when factored against the energy and monetary savings over
the lifespan of the building, makes sense.
If LCC evaluation were to be used more widely across the building
industry, many common building materials would likely be found grossly
lacking. Sheet vinyl flooring, as an example, would likely be found to
be a poor value in terms of energy, environmental, and building air
quality costs over the useful lifespan of the product and the poor
likelihood of reuse or recycling. Similarly, vinyl siding, most
carpeting, and high Volatile Organic Compound paints would be found to
have a poor Life-Cycle Costing evaluation.
The challenge for the green builder or green developer will be to get
the consumer to look beyond the initial cash outlay cost of a
product or method and to see the longer-term equation. This is
hampered largely by the tendency of the American populous to change
residences often. Many homeowners will not be interested in the
financial incentives
of making a building decision that has a five or ten year payoff, even
if the savings is substantial, when
they have no intention of staying in a home for that amount of time.
Clearly, a larger view of our ethical responsibility to one another and
to future generations must come into play in green building marketing
efforts.
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