The Financially Optimum Level for a Green Office Building: LEED v4 vs LEED 2009

Abstract

The concern of environmental and energy issues has been highly increased. The Leadership in Energy and Environmental Design (LEED) certification is updated from LEED 2009 to LEED v.4 with stronger demand on energy, material, and water performances of buildings. These affects the building construction cost for getting the green building levels, namely certified, silver, gold and platinum. Investing at the financially optimum level is the most significant issue for the enterprises aiming for LEED certification. A comparison of the building construction cost to attain credits between LEED 2009 and LEED v.4 are studied. A 5-storey office building with an area of 958.92 m2 is selected as a case study. In the analysis, the similar measures were used for both LEED versions. The priority for selecting the measures ranging from the measures that do not require investment but provide saving to the measures that require investment but no saving in return. The results show that when applying both versions of LEED, the gold level provides the shortest payback period. However, the highest internal rates of return occur at different level. For LEED 2009, the certified level shows the highest internal rate of return at 10.07%. The platinum level provides the highest internal rate of return at 8.32%, when applying the measures according to LEED v.4. The sensitivity analysis shows that the net present values are negative for all certification levels of LEED 2009 and LEED v.4, when the discount rates are higher than 10% and 9%, respectively.