Rosetta Stone

October 13, 2020

Economics + Operational Cost

Talking Points • Research Brief • Collection Database

Summary

Operational expenses are the out-of-pocket cost for maintaining and running a space (Katz 2020). For a typical private sector office building include cleaning, utilities, fixed costs, parking, road and grounds, repair and maintenance, and real estate taxes (BOMA 2018). For a typical company, operational costs account for 6% to 15% of total business expenses (Attema 2018).

Keywords

Economics, Operational Cost, High Performance Design, Goal Setting, Climate Responsive Design

High Performance Design Impacts on Operational Costs

  • High performance design features can significantly reduce utility costs through energy and water efficiency and save on average 14% in operational costs over five years for new construction and 13% over five years for green retrofits and renovations (Dodge 2018).
  • Savings in operating costs increase market value of project (Eichholtz 2010) and can be thought of as an on-going revenue stream over the lifetime of the project (Burpee 2009).

Goal Setting

  • The process for realizing energy cost savings begins early in the design phase, where building owners, architects, engineers, and consultants set energy goals and work collaboratively to integrate building systems effectively (Bhavsar 2020).
  • Assessing sustainably through an established framework can be an effective exercise during goal setting and can lead to reduction in energy consumption (Raouf 2018).

Integrating Passive and Climate Responsive Design

  • Operational cost reduction in high performance buildings is a result of an integrated design approach that incorporates passive and climate responsive design, daylighting design, and further reduction of loads through equipment efficiency and occupant behavior (Lechner 2014).
  • The following strategies work together to lower operational costs in high performance buildings:
      • Preventing heat gains on windows through envelope shading strategies, such as external shading or electrochromic glass – significantly cuts down on energy use and peak cooling load (Chen 2015)
      • Designing to increase natural daylighting – can reduce electric light use significantly (Dean 2016)
      • Decouple heating/cooling from ventilation – using a dedicated outdoor air system can reduce mechanical cost 23% annually (http://doas-radiant.psu.edu/)
      • Use passive cooling techniques such as night flushing thermal mass – night flushing can reduce cooling energy consumption between 12-54% (Gratia 2004, Schulze 2013, Imessad 2014).
      • Operate building under a mix-mode ventilation sequence – mixed-mode ventilation can reduce energy consumption up to 31% (Daaboul 2018).

Key References

Review Articles
  • Attema, Jeremy, Fowell, S.J., Macko, M.J., & Neilson, W.C. “The Financial Case for High Performance Buildings.” San Francisco: Stok LLC. (2018).
  • Berardi, Umberto. “Sustainability assessment in the construction sector: rating systems and rated buildings.” Sustainable Development 20, no. 6 (2012): 411-424.
  • Burpee, Heather, M. Hatten, J. Loveland, and Stan Price. “High performance hospital partnerships: reaching the 2030 challenge and improving the health and healing environment.” In ASHE Conference on Health Facility Planning, Design and Construction (PDC). Phoenix, AZ. 2009.
  • Chen, Xi. “A comprehensive review on passive design approaches in green building rating tools.” Renewable and Sustainable Energy Reviews 50 (2015): 1425-1436.
  • Dean, Edward. Zero Net Energy Case Study Buildings. Volume 2. 2016. Pacific Gas and Electric Company
  • Dean, Edward. Zero Net Energy Case Study Buildings. Volume 3. 2018. Pacific Gas and Electric Company
  • Karr, M. “Ground-Source Variable Refrigerant Flow Heat Pumps: A Solution for Affordable Housing, Assisted Living, Hotels and Dorms.” Washington State University Extension Energy Program (2011): 1-7.
  • Prill, R. “Measuring Carbon Dioxide Inside Buildings–Why is it Important.” Energy Proram, WSU, Washington, USA (2013).
  • Raouf, Ayman MI, and Sami G. Al-Ghamdi. “Building information modelling and green buildings: challenges and opportunities.” Architectural Engineering and Design Management 15, no. 1 (2019): 1-28.
  • WGBC (World Green Building Council). The Business Case for Health and Wellbeing in Green Building. 2018.
  • WGBC (World Green Building Council). The Business Case for Green Buildings: A Review of the Costs and Benefts for Developers, Investors and Occupants. 2013.
Primary Research
  • Bhavsar, Rutul. “Mohawk College’s Net Zero Energy And Zero Carbon Building – A living lab for high efficiency and renewable energy technologies in buildings.” Journal of Green Building 15, no. 1 (2020): 185-214.
  • Daaboul, Jessica. “Mixed-mode ventilation and air conditioning as alternative for energy savings: a case study in Beirut current and future climate.” Energy Efficiency 11, no. 1 (2018): 13-30.
  • Eichholtz, Piet, Nils Kok, and John M. Quigley. “Doing well by doing good? Green office buildings.” American Economic Review 100, no. 5 (2010): 2492-2509.
  • Fowler, Kimberly M, et. al. Re-assessing green building performance: A post occupancy evaluation of 22 GSA buildings. No. PNNL-19369. Pacific Northwest National Lab, Richland, WA, 2010.
  • Imessad, K., L. “Impact of passive cooling techniques on energy demand for residential buildings in a Mediterranean climate.” Renewable energy 71 (2014): 589-597.
  • Lee, M. C., K. W. Mui, L. T. Wong, W. Y. Chan, E. W. M. Lee, and C. T. Cheung. “Student learning performance and indoor environmental quality (IEQ) in air-conditioned university teaching rooms.” Building and Environment 49 (2012): 238-244.
  • Schulze, Tobias, and Ursula Eicker. “Controlled natural ventilation for energy effcient buildings.” Energy and Buildings 56 (2013): 221-232.
  • Taemthong, Wannawit. “An analysis of green building costs using a minimum cost concept.” Journal of Green Building 14, no. 1 (2019): 53-78.
  • Wang, Weimin. “Energy Savings and Economics of Advanced Control Strategies for Packaged Air-Conditioning Units with Gas Heat.” No. PNNL-20955. Pacific Northwest National Lab.(PNNL), Richland, WA (United States), 2011.
Print Media
  • Grondzik, Walter T., and Alison G. Kwok. Mechanical and electrical equipment for buildings. John Wiley & Sons, 2014.
  • Lechner, Norbert. Heating, cooling, lighting: Sustainable design methods for architects. John Wiley & Sons, 2014.