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Feasibility Analysis for Green Home Construction in Florida - A Case Study

Permanent Link: http://ufdc.ufl.edu/UFE0041647/00001

Material Information

Title: Feasibility Analysis for Green Home Construction in Florida - A Case Study
Physical Description: 1 online resource (118 p.)
Language: english
Creator: Albanese, Anthony
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2010

Subjects

Subjects / Keywords: Building Construction -- Dissertations, Academic -- UF
Genre: Building Construction thesis, M.S.B.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Green building in the residential sector has potential to improve the value of the housing market by making homes more affordable and giving industry professionals a competitive edge. Homeowner s may find that building a green home is a worthy investment in today s economic climate of unstable energy prices, home values, and investment opportunities. Home developers and contractors may find that building green homes makes business sense by gaining a competitive edge and market differentiation. The major hindrance of mainstreaming green building can be attributed to the lack of accurate and thorough financial and economic information available. The arguable misconception that green buildings cost more to construct and maintain, coupled with the ambiguity of current data regarding life cycle costing, have turned many developers and contractors away from green building, thus falling back on conventional code compliant means and methods. The study s objective is to demonstrate that green building in the residential sector is a lucrative business direction for developers and contractors, as well as a wise investment for homeowners. To support this theory, the researcher performed a case study on an actual custom home that is to be built in South Florida, and analyzed the 11 potential for green strategy implementation based on performance, cost-effectiveness, and consumer demand. The holistic green home strategy focused on energy efficiency, renewable energy, water conservation, green materials and resources, site and landscaping, and indoor environmental quality. The researcher then performed a comparative economic, energy, and value analysis on the conventional custom home and the upgraded green home. The researcher determined the green cost premium, energy savings, life cycle cost benefits, builder s profit, and the green upgrade payback period for the green home. The results of this case study support the theory that green home building is a beneficial investment for both homeowners and homebuilders.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Anthony Albanese.
Thesis: Thesis (M.S.B.C.)--University of Florida, 2010.
Local: Adviser: Ries, Robert J.
Local: Co-adviser: Issa, R. Raymond.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2010
System ID: UFE0041647:00001

Permanent Link: http://ufdc.ufl.edu/UFE0041647/00001

Material Information

Title: Feasibility Analysis for Green Home Construction in Florida - A Case Study
Physical Description: 1 online resource (118 p.)
Language: english
Creator: Albanese, Anthony
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2010

Subjects

Subjects / Keywords: Building Construction -- Dissertations, Academic -- UF
Genre: Building Construction thesis, M.S.B.C.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Green building in the residential sector has potential to improve the value of the housing market by making homes more affordable and giving industry professionals a competitive edge. Homeowner s may find that building a green home is a worthy investment in today s economic climate of unstable energy prices, home values, and investment opportunities. Home developers and contractors may find that building green homes makes business sense by gaining a competitive edge and market differentiation. The major hindrance of mainstreaming green building can be attributed to the lack of accurate and thorough financial and economic information available. The arguable misconception that green buildings cost more to construct and maintain, coupled with the ambiguity of current data regarding life cycle costing, have turned many developers and contractors away from green building, thus falling back on conventional code compliant means and methods. The study s objective is to demonstrate that green building in the residential sector is a lucrative business direction for developers and contractors, as well as a wise investment for homeowners. To support this theory, the researcher performed a case study on an actual custom home that is to be built in South Florida, and analyzed the 11 potential for green strategy implementation based on performance, cost-effectiveness, and consumer demand. The holistic green home strategy focused on energy efficiency, renewable energy, water conservation, green materials and resources, site and landscaping, and indoor environmental quality. The researcher then performed a comparative economic, energy, and value analysis on the conventional custom home and the upgraded green home. The researcher determined the green cost premium, energy savings, life cycle cost benefits, builder s profit, and the green upgrade payback period for the green home. The results of this case study support the theory that green home building is a beneficial investment for both homeowners and homebuilders.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Anthony Albanese.
Thesis: Thesis (M.S.B.C.)--University of Florida, 2010.
Local: Adviser: Ries, Robert J.
Local: Co-adviser: Issa, R. Raymond.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2010
System ID: UFE0041647:00001


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1 FEASIBILITY ANALYSIS FOR GREEN HOME CONSTRUCTION IN FLORIDA A CASE STUDY By ANTHONY ALBANESE A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORID A IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUILDING CONSTRUCTION UNIVERSITY OF FLORIDA 2010

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2 2010 Anthony Albanese

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3 To my family: Mom, Dad, and Nick for your enduring inspiration, love, and support throughout my life

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4 ACKNOWLEDGMENTS I would like to thank my thesis committee, Drs. Ries, Issa, and Sullivan, for their inspiration, enthusiasm and s upport in the development of this thesis. The knowledge and guidance I received under their watch has inspired my interest in sustainable construction, and has equipped me with the tools necessary to begin my career in the construction industry. I would like to thank the industry professionals who provided me with insight, perspective, and data in the developm ent of this thesis. I would like to thank my father for inspiring my interest in t he built environment and for providing me with a life of opportunity and happiness. I would like to thank my mother for showing me that any obstacle in life can be overcome through perseverance and love. Finally, I would like to thank the friends t hat I have made throughout my ti me at the University of Florida, who provided intell ectual insight and support in the achievement of this milestone.

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5 TABLE OF CONTENTS page ACKNOWLEDG MENTS .................................................................................................. 4LIST OF TABLES ............................................................................................................ 7LIST OF FIGURES .......................................................................................................... 8LIST OF ABBR EVIATIONS ........................................................................................... 10ABSTRACT ................................................................................................................... 11 CHA PTER 1 INTRODUC TION .................................................................................................... 13Statement of Problem ............................................................................................. 15Object ive ................................................................................................................. 162 LITERATURE REVIEW .......................................................................................... 17The Green Home Bu ilding Ma rket .......................................................................... 17Green Econom ics ................................................................................................... 20Green Building Cost Benefit An alysis ............................................................... 20Home Ownership Econom ics ........................................................................... 25Green Home Buildin g Strat egy ............................................................................... 29Design and Or ientat ion ..................................................................................... 30Site and La ndscape .......................................................................................... 32Energy E fficiency .............................................................................................. 33Renewable Energy ........................................................................................... 39Water Conservation .......................................................................................... 41Materials and Resources .................................................................................. 42Indoor Environment al Qua lity ........................................................................... 43Florida Green Buil ding Coalition ............................................................................. 44Government Green Building Ince ntives in S outh Flor ida ........................................ 47Green Home Mortgages ......................................................................................... 493 RESEARCH ME THODOLOGY ............................................................................... 524 RESULTS AND ANALYSIS .................................................................................... 54Custom Home Information ...................................................................................... 54Green Systems Strategy ......................................................................................... 60Heating, Ventilation, and Ai r Conditioni ng System ........................................... 61Water H eating .................................................................................................. 62Windows and Doors ......................................................................................... 63

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6 Lighting ............................................................................................................. 65Roof S ystem ..................................................................................................... 65Photovoltaic System ......................................................................................... 68Insulati on .......................................................................................................... 69Water Conservation .......................................................................................... 71Landscape and I rrigation .................................................................................. 72Appliances and Electroni cs .............................................................................. 74Interior and Exterior Finishes ............................................................................ 74Indoor Environment al Qua lity ........................................................................... 76Total Cost Comparison ........................................................................................... 77Energy M odeling ..................................................................................................... 81Florida Green Building Coalit ion Home Certification ............................................... 82Green Custom Home Life Cycle A nalysis ............................................................. 1055 CONCLUSIONS, CONTRIBUTIONS, AND RECOMMENDATIONS FOR FURTHER STUDY ............................................................................................... 112Conclusi ons .......................................................................................................... 112Contribut ions ......................................................................................................... 113Recommendations fo r Further Study .................................................................... 114LIST OF RE FERENCES ............................................................................................. 115BIOGRAPHICAL SKETCH .......................................................................................... 118

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7 LIST OF TABLES Table page 2-1 Savings for LEED certified and silver buildings (per sq ft) .................................. 222-2 Florida Green Building Coalition checklist summary ........................................... 464-1 Heating, ventilating, and air condi tioning options for custom re sidence ............. 614-2 Window and door pack ages for cust om hom e .................................................... 644-3 Plumbing fixture upgr ade cost br eakdown .......................................................... 734-4 Total cost comparison of base and cust om home .............................................. 784-5 Green scope of work br eakdown ........................................................................ 804-6 Monthly cost comparison same mort gage ..................................................... 1074-7 Monthly cost comparison gr een mort gage ..................................................... 1074-8 Life cycle analysis with Energy Efficient Mortgage ........................................... 1094-9 Life cycle analysis without Energy Effici ent Mortgage ...................................... 110

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8 LIST OF FIGURES Figure page 2-1 Triggers impacting the expansion of gr een build ing ........................................... 192-2 Obstacles impacting the expansion of green building ......................................... 202-3 Percentage breakdown of green building financ ial benefits ................................ 232-4 Utility bill, mortgage payment, and homeowner income from 1996-2006 ........... 284-1 Custom home fi rst floo r plan ............................................................................... 564-2 Custom home se cond floor plan ......................................................................... 574-3 Custom home east an d west el evation ............................................................... 584-4 Custom home north a nd south elev ations .......................................................... 594-5 Eagle Green energy saving roof ......................................................................... 674-6 Photovoltaic system cost and payba ck analysi s ................................................. 704-7 Energy Gauge building i nput summary fo r base home ....................................... 834-8 Annual energy summa ry for bas e home ............................................................. 884-9 Home Energy Rater System index for base home .............................................. 894-10 Energy Gauge building i nput summary fo r green home ..................................... 904-11 Annual energy summa ry for gr een hom e ........................................................... 954-12 Home Energy Rater S ystem index fo r green home ............................................ 964-13 Florida Green Building Coalition green custom home point summary ................ 974-14 Florida Green Building Coaliti on energy categor y checklist ................................ 984-15 Florida Green Building Coalit ion water categor y checklist .................................. 994-16 Florida Green Building Coalition lot choice cat egory checklist ......................... 1004-17 Florida Green Building Coalit ion site categor y checklist ................................... 1014-18 Florida Green Building Coalition health categor y checklist ............................... 1024-19 Florida Green Building Coalition materials cat egory che cklist .......................... 103

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9 4-20 Florida Green Building Coalition disa ster mitigation ca tegory checklist ............ 1044-21 Florida Green Building Coaliti on general categor y checklist ............................. 105

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10 LIST OF ABBREVIATIONS EEM Energy efficient mortgage EIM Energy improvement mortgage FGBC Florida Green Building Coalition FHA Federal Housing Administration FPL Florida Power and Light HERS Home Energy Rating System HVAC Heating, ventilati on, and air Conditioning LCC Life cycle costing analysis LEED Leadership in Energy and Environmental Design NAHB National Association of Homebuilders NFRC National Fenestration Rating Council SEER Seasonal energy efficiency ratio SHGC Solar heat gain coefficient R-Value Measure of thermal resistance

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11 Abstract of Thesis Pres ented to the Graduate School of the University of Florida in Partial Fulf illment of the Requirements for the Degree of Master of Science in Building Construction FEASIBILITY ANALYSIS FOR GREEN HOME CONSTRUCTION IN FLORIDA By Anthony Albanese May 2010 Chair: Robert Ries Cochair: Raymond Issa Major: Building Construction Green building in the residential sector has potential to improve the value of the housing market by making homes more affordable and giving industry professionals a competitive edge. Homeowners may find th at building a green home is a worthy investment in todays economic climate of unstable energy prices, home values, and investment opportunities. Home developers and contractors may find that building green homes makes business sense by gaining a competitive edge and market differentiation. The major hindrance of mainst reaming green building can be attributed to the lack of accurate and thorough financial and economic in formation available. The arguable misconception that green buildings cost more to construct and maintain, coupled with the ambiguity of current data regarding life cycle costing, have turned many developers and contractors away from green building, thus falling back on conventional code compliant means and methods. The studys objective is to demonstrate that green building in the residential sector is a lucrative business direction for developers and contractors, as well as a wise investment for homeowners. To support this theory, the researcher performed a case

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12 study on an actual custom home that is to be built in S outh Florida, and analyzed the potential for green strategy implementation based on performance, cost-effectiveness, and consumer demand. The holistic green home strategy focused on energy efficiency, renewable energy, water conservation, gr een materials and resources, site and landscaping, and indoor environmental qua lity. The researcher then performed a comparative economic, energy, and value a nalysis on the conventional custom home and the upgraded green home. The researcher determined the green cost premium, energy savings, life cycle cost benefits, builders profit, and t he green upgrade payback period for the green home. The results of this case study support the theory that green home building is a beneficia l investment for both hom eowners and homebuilders.

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13 CHAPTER 1 INTRODUCTION The univer sal means for evaluating any proc ess, venture, or system is the analysis of the associated costs and benefits. This fundamental evaluation method can be readily applied to the assessm ent of the environmental a nd economic impacts of the built environment. While the development and construction that has reshaped our earth has provided many benefits to society, the costs to our environment, and therefore ultimately back to society, have come to the forefront of sustainabili ty concerns. It is generally recognized that buildings consume a large portion of water, wood, energy, and other resources used in the economy. To quantify this statement, the built environment accounts for nearly 40% of tota l U.S energy consumption, nearly 70% of electricity consumption, about 36% of the nations total carbon dioxide emissions, and accounts for nearly 150 million tons of total nonindustrial waste generation in the U.S. (USEPA 2004) Not only are these impacts extremely costly to the environment and to society, the conventional built environment that promotes thes e high societal and environmental costs is exceptionally pricey to owners in the form of higher energy costs and increased operation and maintenance cost s. Green building provides not only an ethical and practical response to these issu es of environmental impact and resource consumption, but also an economical alte rnative to the high and wasteful costs associated with the convent ional built environment. While consensus on the environmental and social benefits of green development has been relatively established, the major hindrance of mainstr eaming green building

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14 can be attributed to the lack of accurate and thorough financial and economic information available. (Kats 2003) The arguable misconception that green buildings cost more to construct and maintain coupled with the ambiguity of current data regarding life cycle costing, have turned many developers and contractors away from green building, thus falling back on conventional code compliant means and methods. Budget concern and profit-driven direction t end to dominate the decision making process, frequently causing developers and decision makers to value engineer green building techniques out of the delivery process. While this is a conventional attempt to increase value by means of cost cutting, the im plementation of green building st rategies has the potential to boost the value of real estate above and beyond the cheaper code compliant counterpart, even at the green cost premium. A shift in the per ception of value must be embraced by developers, contractors, owners, and policy ma kers in order to promote the sustainability and harmonization of the built and natural environment. The high-performance green building move ment is considered to be one of the most successful environmental agendas to date, and is the catalyst for the construction industrys progression into providing our society with environmental and economic sustainability. (Kibert 2008) However, full embracement of green construction and development by the industry and society is ye t to be attained, as industry professionals are reluctant to make the tr ansformation to build green. The leading barrier to the mainstreaming of green build ing is the initial cost pr emium, as the innovative technologies and techniques inherent in green buildings cost more than the conventional counterpart. While a green buildi ng may carry a 3-10% cost premium, the green component upgrades provide subst antial monthly energy savings, which

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15 eventually payback the cost of the upgrade and provide future savings beyond. (Kibert 2009) Green buildings must be ev aluated on a life cycle basis rather than total cost in order to demonstrate the benefic ial investment that green bu ildings provide to owners. Simply put, building green saves green in two ways; it saves money and it saves the environment. Less money spent on utility bills translates into less carbon emissions emitted into the atmosphere, thus comp leting the economic c onnection between the built and natural environments. Statement of Problem Homeownership in the United States is tantamount with the achievement of the American dream. In the wake of unprecedent ed economic turmoil, this is a dream that many present and prospective homeowners are finding is slipping away from them. For most people in the United States the purchase of a home is a considerable, if not the largest investment of ones lifetime. Until recently, hom eownership was viewed as a profitable investment that was destined to build equity and reap financial returns at the time of sale. The current state of economic affairs, partially attributable to the collapse of the housing market in 2008, has held dire consequences for many home-owning Americans. Values of homes are dropping substantially, homeowners are finding themselves in foreclosure, and the over supply of vacant housing has nearly halted construction starts for new homes, which transla tes into lost jobs and lost business for developers and contractors. Furthermore, the cost of owning and maintaining a home has increased substantially due to energy infl ation, making homes more unaffordable for current and pros pective homeowners. While these unfortunate trends have bec ome commonplace, another mainstream trend exists in the mounting awareness of current environmental issues and the

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16 accompanying transformation by companies, individuals, and build ings to go green. While green buildings are gaining market s hare in the commercial and public sectors, the residential market is showing slower movement. Green building in the residential market has potential to improve the value of the housing market by making homes more affordable and giving industry professionals a competitive edge. Homeowners may find that building a green home can prove a worthw hile investment in todays economic climate of unstable energy prices, home values, and investment opportunities. Similarly, home developers and contractors may find t hat building green homes makes business sense by giving them a com petitive edge and a specialized product in a market that is saturated with homes and people trying to build them. While the green building movement is gaining momentum, skepticis m remains in the minds of industry professionals and homeowners as to the true economic benefits of building and owning a green home. Objective The studys objective is to demonstrate t hat green building in t he residential sector is a beneficial business direction for devel opers and contractors, as well as a wise investment for homeowners. To support this theory, the researcher performed a case study on an actual custom home that is to be built in S outh Florida, and analyzed the potential for green strategy implementation based on performance, cost-effectiveness, and consumer demand. The holistic green home strategy focused on energy efficiency, renewable energy, water conservation, gr een materials and resources, site and landscaping, and indoor environmental qua lity. The researcher then performed a comparative economic, energy, and value a nalysis on the conventional custom home and the upgraded green certified home. The researcher determined the green cost

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17 premium, energy savings, life cycle cost benefits, builders prof it, and the green upgrade payback period. CHAPTER 2 LITERATURE REVIEW This literature review examines the strategies, motivations, and challenges for green home building in Florida. This will be accomplished through an analysis of the current market for green homes in order to determine the motivations and barriers to mainstreaming green home construction. Next, the economic case for green home construction is developed through a discussi on of homeownership economics, as well as the costs and benefits associated with green buildings. Green strategies for residential implementation are di scussed, as well as their e ffect on the environment and on homeowners capital. The green building assessment system provided by the Florida Green Building Coalition (FGBC) is presented in order to determine the criteria for a certifiable green home. Finally, green building incent ive programs offer ed by the federal and state governments are discussed, as we ll as energy efficient mortgage programs currently offered by lenders. The Green Home Building Market The residential market realized substantia l d eclines in construction starts between the years of 2006 and 2009 due to the collapse of the housing market. Single-family housing starts decreased by nearly 70% during these years, and 2009 saw the lowest volume of construction starts since 1990. (McGraw-Hill 2008) While the overall residential market has experie nced a great decline in cons truction starts, the green home building market is experiencing ex pansion and has achieved a dominant position in the marketplace. According to a survey conducted by McGraw Hill, 70% of

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18 homeowners said they were more likely to buy a green home in a down market, and 40% of builders state that t he down market has made it easi er for them to market and sell green homes. The National Association of Homebuilders (NAHB) estimates that between 5% and 10% of new construction starts in 2010 will be green, which translates to between $19 and $38 billion for the resi dential construction market (NAHB 2010). McGraw Hill Construction estimates that the ov erall green building market opportunity in 2013 will be between $96 and $140 bi llion, with the residentia l market accounting for $40 to $70 billion of this mark et share. (McGraw-Hill 2008) Green building certification programs such as the United States Green Building Councils (USGBC) Leadership in Energy and Environmental Design (LEED), the Florida Green Building Coalition (FGBC), and the National Association of Home Builders (NAHB) have experienced rapid gr owth in the number of homes seeking certification. In 2009, Ener gy Star qualified homes reac hed the one million mark, with 75,000 certified homes constructed in 2009 accounting for nearly 17% of all singlefamily home construction starts (Koch 2009). The NAHB currently has over 600 homes certified by its home assessment system with another 4,500 in the pipeline (NAHB 2010). The USGBCs LEED for Homes certification program currently has 1001 homes certified and over 12,000 homes currently s eeking certification (USGBC 2010). Green homes are gaining market share in Florida, as the FGBC currently has 2,270 homes certified under its assessment system (FGB C 2010). The growing number of homes achieving and seeking green certification is an indication of the mounting market share that green homes are gaining in the marketplace.

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19 The green home building mark ets momentum is partially attributable to the changing perceptions of green building by homebuilders and homeowners. According to a study by McGraw Hill, the highest motiva tion from the homebuild er perspective is creating a better quality product followed by being the right thing to do. The highest motivation from the homebuyer perspective is cost savings from utility bill reductions followed by the financial incentives in the form of tax credits and rebates. The leading barrier to mainstreaming green building from the homebui lder perspective is the consumers willingness to pay, and the leading barrier from the homeowner perspective is the higher first costs. McGraw Hills 2008 Green Home Builder SmartMarket Report reveals industry perceptions as to what triggers and obstacles impact the expansion of green building. Figures 2-1 and 2-2 demonstrat e the findings of this study. (McGraw-Hill 2008) 81%82%83%84%85%86%87%88%89% Percent of Builder Opinion Energy Costs/Utility Rebates Emphasis on Efficiency Superior Performance Consumer Demand Competative Advantage Increased EducationTriggers Impacting the Expansion of Green Building Figure 2-1. Triggers impacting the expansion of green building

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20 0%10%20%30%40%50%60%70%80%90% Percent of Builder Opinion Consumer Willingness to Pay Higher First Cost Overall Economic Conditions Lack of Green Building Education Lack of Green Product Awareness Codes, Ordinances, RegulationsObstacles Impacting the Expansion of Green Building Figure 2-2. Obstacles impacting the expansion of green building Green Economics The financial assessment of green buildings differs from conventional buildings due to the upfront cost premium and the monthly energy and mortgage savings attributable to the green design. The followi ng section demonstrates concepts of green economics through the discussion of the green building co st benefit analysis and homeownership economics. Green Building Cost Benefit Analysis The financial costs and benefits that accompany the implementation of sustainable strategies in construction are key factor s when determining an owners willingness to build green. Implementing green strategies into the built environment that focus on energy efficiency, water conservation, improv ed indoor air quality, as well as materials and resource efficiency will produ ce cost savings in the long term, but at an upfront cost

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21 premium. Like most invest ments, the fundamental techni que for evaluating the cost and benefits associated with green buildings is the life cycle costing analysis. A life cycle cost analysis evaluation compares the initial investment, in this case the green cost premium, to the expected fu ture benefits, such as the savings and benefits from green design, that are received th roughout the buildings life cycle. The financial benefits of green buildings include lower en ergy costs, reduced waste disposal, lower water costs, reduced environmental and emissions co sts, lower build ing operations and maintenance costs, and savings fr om increased productivity and health. Recognizing that the issue of cost is the predomi nate prohibitive factor in the widespread acceptance of gr een building, numerous ef forts have been made to determine more definitively the costs and benefits associated with sustainable buildings. A thorough and reputable study regarding the business case for sustainability was written by Greg Kats in 2003, titled The Costs and Financial Benefits of Green Buildings. Kats incorporates both the life cycle quantitative cost benefits as well as the qualitative productivity and health benefits to deliver a well-rounded and thorough perspective on the costs and benefits of going green. Kats study involves the cost benefit analysis and breakdown for 33 LEED certified buildings, and his findings establish a solid economic case for t he enhanced value of green buildings. Table 2-1 breaks down the financial benefits of building green on a twent y-year net present value basis for LEED Certified and Silver buildi ngs in the United St ates. The breakdown summaries the average costs and benefits for the 33 LEED certified buildings on a cost per square foot basis. (Kats 2003)

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22 Table 2-1. Savings for LEED certif ied and silver buildings (per sq ft) Category 20-year NPV Energy value $5.79 Emissions value $1.18 Water value $0.51 Waste value (construction only) 1 year $0.03 Commissioning operations and maintenance value $8.47 Productivity and health $36.89 Less green cost premium -$4.00 Total 20-year NPV $48.87 The LEED building benefits and savings can be separated into two different benefit types, hard benefits and soft benefits. Hard benefits, which are fairly predictable, include savings in energy, water, electric ity, waste, and other benefits that are easily documented because the owner receives peri odic billing for them. (Kibert 2008) These savings are realized by monthly utility bill reductions due to enhanced energy efficiency, water conservation, and waste reduction. Soft benefits, which are relatively uncertain, include maintenance, occupant comfort and health, worker productivity, and other benefits that can be attribut ed to the improved indoor en vironmental quality (IEQ) inherent in green buildings. The latter of th ese two benefit types is documented as being the overwhelmingly large portion of total perceived benefits, and consequently is the more controversial figure when evaluatin g the life cycle cost benefits and savings associated with green buildings. According to Kats, the benefit breakdown fo r LEED Certified and Silver Buildings is attributable as follows: Productivi ty and health at 70%, reduced operation and maintenance costs at 16%, energy savings at 11%, emissions at 2%, and finally water at 1%. (Kats 2003) While savings and benefit s from reduced energy costs and other

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23 hard costs are based on actual savings from energy efficient buildings, the extreme savings and benefits from the productivity and health factors are based on anecdotal information. Figure 1-1 is a graphical repr esentation of the above data set, and demonstrates that a substantial portion of the financial benefits attributable to sustainable construction come fr om enhanced productivity and health. While the staggering savings and benef its due to increased health and productivity may seem over-extrapolated in Kats benefit breakdow n, he states that these benefits can be viewed as reasonably conservative estimates within a large range of uncertainty. (Kats 2003) This uncer tainty can be enough to turn potential riskaverse developers and investors away from green building, and consequently is the uncertainty that proponents of green building want to eliminate. Percentage Breakdown of Green Building Financial Benefits16% 70% 1% 11% 2% 0% Energy Emissions Water Waste Value Commissioning O&M Value Productivity & Health Figure 2-3. Percentage breakdown of green building financial benefits

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24 There is a connection between high-performance green buildings, increased indoor environmental quality, and its benef icial impacts on occupant health and productivity. Intuitively it is known that our work and living envir onments impact our health and performance, which can suffer when t he built environment fails to support its occupants ability to feel comfortable, stay healthy, and produce. Green buildings promote health and productivity by provid ing healthier work, living, and learning environments, with more natural light and cl eaner air, and contribute to improved occupant health, comfort, and ultimately, pro ductivity. These benefits can be attributed to enhanced indoor environmental quality (I EQ), the link between green buildings and the health and productivity benefits. IEQ takes into consideration a broad range of human health factors including: air quality, lighting, temperat ure, humidity, ventilation, noise, and other factors that affect health and productivity. (Kibert 2008) The emphasis on IEQ has expanded rapidly in the last decade, due to the large exposure of health problems caused by poor indoor environmental quality in conventional code compliant buildings, al so known as Sick Building Syndrome. Buildings that fall victim to SBS are convent ionally built structur es that are poorly ventilated and climate controlled, contain materials that offgas pollutants into the indoor environment, and have few or no operable win dows, among other downfalls. (Kats 2003) Symptoms of sick building syndrome include headache, fatigue, drowsiness, irritation of the eyes, nose, and thr oat, and sinus congestion. These symptoms commonly induce ailments such as asthma and allergies, respiratory track infections, and flu like conditions. The economic im pacts of sick building syndrome can be disastrous. The Environmental Protecti on Agency estimates that over $140 billion

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25 dollars in direct medical costs can be a ttributed to poor indoor environmental quality. (Kibert 2008) The Average American spends near ly 90% of his/her time indoors, and the air quality in these buildings is often ci ted as being far worse than the outside air, sometimes by as much as 10 or even 100 ti mes. (Kats 2003) The substantial amount of time people spend in these unhealthy and unproductive indoor environments can drastically reduce occupant health and productivi ty. While many aspects of conventional buildings can make people sick, conversely, many features of green buildings can protect occupant health and boost productivity. Green building in both the residential and co mmercial sectors provides economic benefits to owners and occupants in the form of energy and water savings, as well as health and productivity benefits though improved i ndoor environmental qu ality. In order to realize these economic and health benefits, owners must be willing to invest upfront for these upgrades which will eventually pay themselves back and provide savings beyond for years to come. Home Ownership Economics For most people in the United States, the purchase of a home is a consider able, if not the largest investment of their lifetime. While home values have historically appreciated with time, the current economic crisis has shown that this investment has been misguided by the proliferation of bad mortgages and owners living in homes they cannot afford. The traditional valuation of a home is based on an upfront cost per square foot basis. The true cost of a home howe ver is not revealed solely in its sticker price, but rather in the e scalating monthly mortgage and utilit y bill payments. Too often are homeowners purchasing decisions made on whether the asset is affordable today, and not whether the asset is affordable for the foreseeable future. As the average cost

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26 of living for Americans continues to escalate, green homes are becoming an attractive choice for owners who wish to make thei r homes more affordable. (Kaufmann 2008) The cost of owning and maintaining a home on a monthly basis has increased considerably, making homes more unaffordable. The Center for Housing Policys 2008 report found that between t he period of 1996 and 2006, homeowners experienced an increase of 64.9% in housing expenses, while homeowners median income had only increased by 36.3%. (Center for Housing Policy 2008) Furthermore, nearly 20% of homeowners spent half of their income on housing costs, which defines a severely costburdened household. This unsustainable grow th has led to homes becoming more unaffordable, and therefore home values acro ss the nation have drastically declined. As of the second quarter of 2009, The S & P/Case-Schiller Home Price Index (HPI) had experienced twelve straight quarters of decli ne, with median home values at their lowest since 2002. (Center for Housing Policy 2008) A shift in the perception of value must be embraced by developers, contractors, owners, and policy ma kers in order to promote the sustainability and affordab ility of the bu ilt environment. The real cost of homeownership consis t of monthly mort gage payments and utility bills, both of which have continued to esca late despite the down state of the economy. While home values are declining, homeowners ar e finding that an opposite trend exists regarding mortgage payments. According to the Center for Housing Policys 2008 report, between the years of 1996 and 2006 the average homeowners mortgage payments have increased by 45.8%, while t he average homeowners income has only increased by 36.3%. (Center for Housing Policy 2008) Additionally, homeowners monthly utility bills have increased by 43. 3% over this ten-year span, further

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27 outweighing the 36.3% increase in income. Over half of these ut ility costs are going toward electricity, and over 5% of homeowners income is going toward monthly utility payment. (Kaufmann 2008) Figure 2-3 demonstr ates this comparison and breaks down the monthly cost of energy sources. While energy prices fluctuate with t he price of crude o il and other economic factors, the general trend is upward. In 2007, energy inflation decreased by 4.04%, but then rose 8.38% between 2008 and 2009 (Energy Information Administration 2010). These inflation rates demonstrate how volati le energy prices can be, especially when much of this energy comes from nonrenewab le sources. Energy efficient homes safeguard homeowners from this volatility and inflation, as these homes can reduce or eliminate the need for energy pr ovided by local utilities. As conventional homes have become more unaffordable due to escalating mortgage payments and energy costs, green hom es are becoming more affordable due to reduced energy consumption and mortgage pay ments. While the upfront cost of a green home carries a price pr emium, the true value of the green home should be evaluated on a monthly cost basis to take into account energy and mortgage payment savings. Innovative features in green homes that enhance energy efficiency will incur an incremental cost, but these upgrades typi cally pay for themselves through monthly energy savings and provide additional savings beyond payback. Savings in mortgage payments has become common as a growing number or lenders and government agencies are now offering green loan packages to borrowers who live in energy efficient homes. This is discussed in depth later in th is Literature Review Value exists in the environmental, energy efficiency, and health benefits inherent in green homes, as the

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28 residential market has shown to pay a premium for the green product. The National Association of Appraisers estimates that for every $1 re duction in annual energy costs achieved through energy efficiency, the mark et value of a home increases by $15 to $25 (Kaufmann 2008). Another study in 2007 by Gree n Builder Media revealed that homebuyers are willing to pay 11% to 25% mo re for green homes (Sekine 2007). The ability of green homes to provide monthly affordability and increased market value will continue to strengthen the ca se for green home production. Figure 2-4. Utility bill, mortgage payment, and homeowner income from 1996-2006

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29 Green Home Building Strategy Green buildings enhance conventional design and construction by implementing innovativ e strategies and technologies t hat reduce energy and water consumption, reduce the impact on the env ironment and natural res ources, and provide the occupants with a healthy living environm ent. In developing a sustainable design strategy for a green building, considerations must be taken to enhance the health of the building, the external environment, and the bui ldings occupants. Strategies that may be implemented include the use of a highl y-efficiency mechanical systems, natural daylighting and passive ventilation, water conservation systems for building use and irrigation, renewable energy production on si te, the use of low-emitting materials to improve the indoor environmental quality, and the use of recycled, reused, and/or renewable materials for construction. Thes e components work in synergy to create a home that is healthy for the building occupants and for the environment. Green project goals should be determined in the conceptual design stage to improve coordination and enhance the synergy of the green feat ures in the home. While teamwork is essential for the successful co mpletion of any construction project, highperformance green buildings require an elev ated collaborative effort among project team members. The integrated design process is implemented early in the conceptual stage to bring project team members up to speed on the objective s of the project, particularly related to sustainability, building efficiency, certification, building health, and resource efficiency. (Kibert 2008) A related process that is unique to the delivery of a high-performance green building is the charrette. The charette is the process by which a variety of stakeholders includi ng the project team, future o ccupants, town officials, and essentially anyone who will be exposed to the pr oject, gather together to establish and

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30 execute the green project goal s. The integrated design pr ocess and the charrette are essential in planning for the design and construction of a high-performance green building, as they develop and enhance t he collaboration of the project team. In order to effectively execute the des ign and construction of a green home, individual systems and strategies must be analyzed to capita lize on the performance of each component and maximize the synergy of a holistic green strategy. Strategies to be implemented include: design and orientatio n, site and landscape, energy efficiency, renewable energy, water conservation, ma terials and resources, and improved indoor environmental quality. The following sections detail the individual strategies and components of a green building. Design and Orientation The design and orientation of the build ing are determined during the conceptual design phase of the project, and serve as fundamental foundatio n for the successful overall green strategy. The goal of this stra tegy is to promote a passive design, which utilizes non-energized design features to control solar heat gain, promote natural daylighting, and improve the thermal comfort and air quality of the living environment. Environmental factors such as the sun, wind, water, temperature, and humidity must be considered, as well as non-environmental fa ctors such as lightin g, privacy, noise, ventilation, and visual aspects. Climatic factor s must also be considered, as the design and orientation vary depending upon the homes geographical r egion and applicable climate. In Florida, the goal of the design and orientation st rategy is to reduce the solar heat gain and maximize the potential for oc ean breezes, thus reducing the mechanical heating and cooling loads. An effective buildi ng design and orientation strategy will work

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31 in synergy with the mechanical features of the home, and will boos t the performance of other green strategies that are implemented. (Kibert 1999) The design and orientation strategy cons iders with the size and shape of the home, the interior layout, and the window an d door fenestration. Buildings should be rectangular in shape, minimize the perimeter or exterior walls, and be oriented on an elongated east-west axis. This allows for la rger north and south facing walls and shorter east and west facing walls, which is ideal fo r reducing solar heat gain from the morning and afternoon soon. This orientation strategy al so provides for the ideal placement of a photovoltaic system on the long south side of the roof. The layout of interior spaces in the home can also affect energy use, li ghting, and thermal comfort. Rooms should be laid out according to the time of day that t hey are used, with the majority of living spaces on the south side of the home. Morning rooms such as breakfast areas should be away from the east to avoid morning sun, while evening rooms such as dinning rooms and evening patios should be away from the west to avoid the afternoon sun. Spaces that require less light such as corridors, l aundry rooms, and garages should be buffers on the north side. (Kibert 1999) The fenestration of windows and doors also plays an integr al part in the design of a green home, due to its effect on solar heat gain, natural daylighting, ventilation, and thermal efficiency. Window fenestration s hould be designed to maximize indirect sunlight for daylighting, as well as provide exterior views. When determining the amount of window area for the home, an appropriate balance between adequate daylighting and solar gain control must be achieved. As a ru le of thumb, one squar e foot of glass area should be utilized for every 100 square foot of living space for adequate natural

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32 daylighting. The majority of windows s hould be on the north and south with minimal windows on the east and west. This strategy wil l maximize the indirect sunlight on the north and south elevations and minimize direct sunlight on the east and west elevations. Window overhangs play an important role in mi nimizing direct sunlight and maximizing indirect sunlight to reduce solar gain and provide natural daylighting. When large windows are desired on the east and west elevations, overhangs are especially effective. A proper design and or ientation strategy that r educes solar gain, provides adequate daylighting, and improves indoor air quality is estimated to reduce energy use by 30%. (Kibert 1999) Site and Landscape Proper site utilization a nd an effective landscaping strategy can reduce the need for landscape irrigation, provide natural shad ing, and facilitate the flow and reclamation of stormwater on site. Consi derations should be taken to pr eserve the natural features of the site to limit ecologi cal disruption and promote sustai nable site utilization. This begins during the construction stage, where a plan should be implemented to minimize loss of soil during construction by employ ing strategies such as temporary and permanent seeding, mulching, earth dikes, si lt fencing, sediment traps and sediment basins. Additionally, considerations should be taken during construction to preserve unbuilt areas of the site by keeping mate rials and equipment off of these areas. (NHMG 2006) According to the FGBC, 50-75% of the pot able water consumption in an average Florida home is for landscape irrigation. Landscaping schemes should be implemented that feature indigenous plant s pecies that are appropriate for the sites microclimate and topography. A landscaping technique known as xeriscaping can be implemented which

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33 utilizes drought tolerant plant species t hat require less water and maintenance for survival. Hardscaped areas of the site such as patios, driveways, and pool decks should utilize permeable material to allow groundwater infiltration to reduce runoff. Landscape schemes can also be designed to provide shadi ng to the south elevation of the home to reduced cooling costs. (FGBC 2008) Rainwater reclamation and harvesting is an effective strategy in reducing water consumption and stormwater runo ff. Floridas average rainfall of 54 inches per year is an excellent source of wate r for landscape irrigation and other non-potable uses such as toilet flushing. Rainwater is generally har vested from a roof surface and flows to a storage tank or cistern via a gutter and downspout system. A landscape scheme that preserves the natural features of the site incorporates xeriscaping strategies, and utilizes a rainwater reclamation system will enhance the sustainability of the site and reduce water consumption. (NHMG 2006) Energy Efficiency In the United States, resident ial energy use accounts for over 20% of the countrys total energy consumption. (EPA a nd DOE 2010) This excessive energy consumption is costly to both the environment in terms of carbon emissions and to homeowners in the form of utility bills, and therefore is a signific ant element of the green building strategy. Green homes provide an effective vehicle for a substantial reduction in our nations energy consumption. Home energy consumpt ion can be greatly reduced by employing such strategies as the use of highly effici ent mechanical systems, constructing a tight thermally resistant building envelope, inco rporating energy efficient lighting and appliances, and reducing phantom loads.

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34 Many of the energy efficient strategies, features, and statistics discussed in this section refer to specifications and savings as defined by Energy Star Energy Star is a joint program of the U.S. Environmental Protection Agen cy and the U.S. Department of Energy, whose goal is to help us all sa ve money and protect the environment through energy efficient products and practices. (EPA and DOE 2010) Building products, appliances, windows, mechanical equipment, and even entire homes themselves can be Energy Star qualified, verifying that these components reduc e energy consumption when compared to the conv entional counterpart. The first step in designing an energy e fficient home is to develop an effective design and orientation strategy that will reduce solar gain, provide natural daylighting, and improve occupant comfort, as discussed in the last section. Once these considerations have been taken, the next step is to provide a thermally efficient building envelope. The building envelope refers to the material medium that separates the exterior environment from interior spaces The three major components of the building envelope are the walls, windows and doors, and the roof system. It is imperative that the building envelope provides a tight ther mally resistant enclosure, controls air infiltration and leakage, and minimizes solar heat gain, all of which will reduce mechanical cooling loads. This is accomplis hed by providing a structurally sound and thermally efficient barrier from the outside el ements, incorporating insulation with a high R-value, and sealing cracks and penetrations to avoid any thermal bridging. (Kibert 2008) An effective wall system will utilize structur ally sound, environmentally friendly, and thermally resistant building materials. While traditional construction materials such as

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35 wood and masonry units can be utilized, inno vate energy efficient wall systems are abundant in the green product marketplace. For example, Structurally Insulated Panels (SIPs) are high-performance pref abricated panels that consist of two layers of structural oriented strand board with an insulating laye r of polystyrene foam in between. For concrete masonry unit (CMU) applications, autoclaved aerated concrete (AAC) is an innovative concrete block that is lighter than conventional CMUs, provides higher insulation value, and is made with fly ash to reduce the environmental impact associated with cement producti on. (Wilson and Piepkorn 2006) When conventional concrete blocks and wood are utilized, efficient insulation with a high R-value should be incorporated to maximize thermal resistance. Expanded Polystyrene, cellulose, and icynene spray foam are very efficient insulators that are made from recycled content, do not off gas into the home, and improve thermal efficiency compared to conventional fiberglass batt insulation. The final factor in the performance of the building envelope is pr oper weatherization and sealing of any penetrations, openings, voids and connections that could compromise the integrity of the envelope. The wall system finish or exteri or paint should be light in color, which will reflect the suns radiation thus reducing cooling loads. (NHMG 2006) Windows and doors provide access, light, pr otection, ventilation and views to the home, but are also large gaps in the thermal efficiency of the wall system. Windows and doors can account for 60% of the energy c onsumed by heating and cooling. (Kibert 1999) It is imperative that windows and doors be selected with specifications that will enhance the thermal efficiency of the envel ope. High performance windows should typically have a low solar heat gain coefficient (SHGC) and a low thermal factor or U-

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36 factor, both of which measure the window as semblys resistance to radiant heat. These factors contribute to letting in visible light for views and daylighting, while limiting solar heat gain. Energy performance in windows can be improved through multiple panes of glass, low conductivity gasses of argon and kr ypton between panes to improve R-value, and low emissive (Low-E) coatings of tin and silver oxide to block radiant heat gain. Window frame materials such as wood, fiberglass, composites, vinyl, and metal, are also a consideration for efficiency and environmental impact, and should be well insulated and tightly sealed. Glass doors should mimic the specifications of the efficient windows discussed. (Wils on and Piepkorn 2006) The final integral component of the buildi ng envelope is the roof system. The roof system must be durable to provide superior pr otection from the elements, especially from hurricanes in Florida, as well as enhance the thermal efficiency of the building envelope. An efficient roof system allows fo r ventilation between the roof tile and deck, which reduces the heat flow into the atti c and therefore into the home. This is accomplished by creating an air current that dr aws in air at the eave and flows out at the ridge underneath the raised roofi ng tiles. Eagle Roofing Products has developed a ventilated roofing system, and clai ms that this system can re sult in 50% heat transfer reduction when compared to an asphalt roof. The roof system should be topped with cool roof tiles, which reflect the suns r adiant heat. Cool roof tiles will minimize the buildings solar heat gain and reduce the heat island effect. Eagle Roofing Products manufactures a variety of attractive cool roof tiles that feature a high Solar Reflectance Index (SRI) value, the measure of a materials solar reflectivity. Cool roof tiles can lower roof surface temperatures by up to 100 F, and can result in energy savings between 10-

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37 30% (Eagle Roofing 2009). A building envel ope that utilizes st ructurally sound and thermally efficient wall, windows and roof system will substantially reduce energy consumption, thus benefiting bot h the environment and the homeowner. After the design of an efficient building envelope, proper selection of the heating, ventilation, and air conditioning (HVAC) equi pment is the next step in reducing home energy consumption. According to Energy Star, the average household spends more than $2,200 a year on energy bills, and nearly half of this goes towards heating and cooling costs. (EPA and DO E 2010) A tight building envelope will reduce the mechanical heating and coolin g loads needed for comfort, and the HVAC system should be properly sized to accommodate this reduction. An oversized system can waste money and materials initially and then will c ontinue to operate wastefully, while under sizing the HVAC system may result in poor efficiency, wasted energy, and compromised comfort. Choosing HVAC equipment with high efficiencies is imperative and is measured by its Seasonal Energy Efficiency Ratio (SEER), which is a measure of how much cooling a system provides over an ent ire cooling season. An HVAC system with a SEER greater than 13 (minimum code compliant efficiency) will provide more cooling with less energy. Ductwork provides air to t he interior spaces but is also a means for efficiency loss, and therefore all ductwor k should be properly sized and sealed with mastic. Furthermore, ductwork should be plac ed in conditioned spac e rather than a hot attic, since the HVAC system must work excessively to compensate for the ductworks hot location. (NAHB 2010) Air filters are the line of defense against the infiltration of contaminants, which can decrease the efficiency of the HVAC syst em and promote air qua lity problems. The

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38 efficiency of an air filter can be measured by its Minimum Efficiency Reporting Value (MERV), and filters with a MERV val ue between seven and thirteen are recommended for residential use. Programmable thermostat s allow occupants to schedule heating and cooling times and temperatures to maximize comfort and reduce energy consumption. Energy Star claims that proper use of a programmable thermostat can save you about $180 every year in energy costs. In summary a properly sized, highly efficient HVAC system with sealed, filtered and conditioned ducts will reduce energy consumption by the homes mechanical system. (EPA and DOE 2010) After mechanical cooling and heating, domes tic water heating is a substantial energy consumer and a significant part of a homeowners monthly utility bill. According to the US Department of Energy, the av erage American household with a typical water heater (gas or electric) spends about 14-25% of its energy costs on heating water alone. (EPA and DOE 2010) The average hous ehold spends between $400 and $600 per year on water heating, making it t he second largest energy expenditure behind heating and cooling. Homes typically use an electric or gas powered hot water storage tank to supply its occupants hot water needs. While more efficient better-insulated tanks are now on the market, Energy Star has initiated a program to qualify water heating technologies that maximize efficiency. Five different types of water heating systems qualify under Energy Star requi rements and include: high-efficiency gas storage, gas condensing, whole-home gas tankle ss systems, solar thermal, and electric heat pumps. Homeowners should evaluate their water heating needs to choose the appropriate technology to maximize effici ency and minimize total cost. (EPA and DOE 2010)

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39 The systems and components inside home that consume energy such as appliances, electronics, and lighting can be effi ciently chosen to reduce consumption. According to Energy Star lighting acc ounts for nearly 20% of the average homes electric bill. (EPA and DOE 2010) Conventional lighting utilizes incandescent light bulbs that consume excessive electrical energy and heat the adjacent ar ea, thus increasing cooling loads. Fluorescent lighting and Light Emitting Diode (LED) light bulbs use 75% less energy than incandescent bulbs, produce li ttle heat, and last up to ten times longer. Household appliances, televisions, computer s, and other electronics that carry the Energy Star logo consume between 20-30% less than conventional products and should be incorporated into the home. Even when these appliances and electronics are turned off, power is still consumed as the dev ice is in standby mode waiting to be turned back on. These phantom loads are hidden consum ers of electricity and are estimated to cost households up to $200 a year. Simple methods such as using a power strip are effective, however more advanced technologies that kill phantom loads as occupants leave the home can also be employed. (EPA and DOE 2010) Renewable Energy Once strategies have been implement ed to reduce energy consumption, measures should be taken to evaluate the homes potential for energy production. A system of Photovoltaic (PV) solar cells, mo re commonly referred to as solar panels, are the most efficient and prevalent for residential applications. Groups of solar cells are assembled to form a PV module and a collection of PV modules make up a PV array, which can be mounted onto the roof of the home for ener gy production. Solar panels utilize free renewable energy from the sun, which is then converted to electricity that can power residential electrical system s and appliances. The potential for the PV

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40 systems energy production is dependent upon t he size and orientation of the system, the geographical location of the hom e, and the quality of installa tion. To maximize solar potential, PV systems should be placed on the south side of the roof with a tilt angle equal to locations latitude. (Kibert 2008) Sizing of the system is dependent upon t he owners desired level of energy production, the amount of space available for the system, and amount of money the owner is willing to spend. Once home ener gy consumption has been reduced through energy efficient strategies, the solar panel system should be designed and sized to offset a certain percentage of this reduced energy consumption. A home that produces as much energy as it consumes is known as a net-zero energy home, however this goal is difficult to attain due to the increased cost and the erratic climatic factors in Florida. Energy use and production is measured in kilo watt-hours (kWh), and the typical home in South Florida utilizes an annual average of 19,891 kWh. (EIA 201 0) In order to achieve a net-zero energy home, a 20 kW system (20, 000 kWh) would need to be installed. The amount of space needed for this system and the cost implications typically make this unattainable, therefore smaller systems such as a 5kW are more commonly utilized to offset a portion of energy use. Available roofing space is also a factor, as each kW takes up approximately 100 square feet of roof space. (Eagle Roofing 2009) Solar panel integration is typically the hi ghest incremental cost of all green home strategies to be implemented, and therefore is a limiting fact or on the size of the system. Solar systems are typically pr iced at approximately $8 per watt, so a 5Kw system would be approximately $40,000. To subsidize this high cost, the federal, state, and many local governments offer tax r ebates and incentives to make PV systems more affordable

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41 by reducing costs up to 70%. Tax incentives, subsidies and rebates that are available to South Florida residents are discussed later in this literature review. Homeowners who decide to invest in solar systems will reap the benefits of reduced or eliminated utility bills, increased home value, and contributing to environmental sustainability by reducing greenhouse gas emissions. (DSIRE 2010) Water Conservation The built environment and the people wh o inhabit it consume an inordinate amount of our rapidly deplet ing water supply. The U.S. Agency for International Development states that 26.4 gallons per per son per day is necessary to maintain a reasonably good quality of life, however, consumption in the United States is nearly quadruple this amount, averaging in at 150 gallons daily per capita. (USEPA 2010) Household water use consists of both indoor and outdoor consumption. Statistics show that 50-75% of the water c onsumption in an average Florida home is for exterior landscape irrigation, and toilets represent the largest source of indoor water use in the home, accounting for up to 30%-40% of water demand. (FGBC 2008) Household water use can be reduced by employing efficient l andscaping and irrigation strategies as well as utilizing plumbing fixtures that reduce water flow. Landscaping and irrigation strategies that utilize native plants and harvest rainwater for irrigation are an effective strategy for reduci ng exterior consumption, as discussed in the Site and Landscaping section. Water consumption inside the home can be reduced through low-flow faucets and showerheads and dual flush toilets. The efficiency of these plumbing fixtures is m easured by the flow rate or flush rate, and should exceed those mandated in the Energy Policy Act of 1992. Dual flush toilet fixtures feature ultra-low flow rates of .8 gallon per flush for small needs and 1.6 gallon

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42 for larger flushing needs, compared to conv entional toilets with 3. 5 gallons per flush. High-efficiency faucets and showerheads for bathrooms and kitchens feature ultra-low flow rates of 1.5 gallons, compared to the conventional 3 to 5 gallons per minute. The Environmental Protection Agency has implemented a program called WaterSense, which promotes and labels water-efficient pr oducts for consumers. Energy Star dishwashers and clothes washers also use less water than the conventional counterpart. A water conservation strategy that implements efficient landscaping and irrigation strategies as well as low-flow fixtures and appliances can reduce household water use by 50%. (USEPA 2010) Materials and Resources The materials strategy for g reen construction takes a life cycle approach by considering environmental aspects of the bui lding material itsel f, as well as the extraction, manufacturing, and disposal process. According to the U.S. Environmental Protection Agency, more than 130 million tons of construction debris and waste are dumped in U.S. landfill s annually. (USEPA 2004) As landfill space keeps dwindling and construction waste keeps coming, it is imperat ive that our construction materials fall in line the closed-loop building materials strategy. The essential component of a materials accordance with a closed-looped strategy is its ability to be designed for deconstruction and disassembly. Deconstructive mate rials can be pulled apart and salvaged to be reused and recycled, while disassembly refers to the effort provided during the design phase to accommodate an ease of disassembly at the end of the materials use, as opposed to demolition and disposal. The clos ed-looped materials strategy is an effective vehicle to remedy the wasteful pr actices of current construction material misuse. (Kibert 2008)

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43 Considerations should be tak en during construction to promote waste diversion by allocating separate spaces for different types of construction waste in order to facilitate the recycling and reuse process. The materi als strategy considers the embodied energy of the material, which refe rs to the total energy cons umed through the extraction, manufacturing, transportation, and installation pr ocesses. Therefore, it is desirable to utilize building materials that are region ally manufactured in order to reduce transportation energy and therefore total embodi ed energy. Rapidly renewable materials such as bamboo, wool, cotton insulation, agr ifiber, linoleum, w heatboard, strawboard and cork should be used in place of material s that are nonrenewable such as petroleum or old growth timber. For concrete applicatio ns, substituting fly ash for cement content will negate the environm ental impact associated with ce ment production. For wood applications, utilizing wood certif ied by the Forest Stewards hip Council ensures that the wood was sustainably harvested. An effective materials strategy that incorporates a closed-looped system and ut ilizes eco-friendly materials c an reduce the impact that the built environment has on the nat ural environment. (Kibert 2008) Indoor Environmental Quality The average American spends 90% of his/he r time in the built envir onment while at work and at home, and the improved indoor environmental quality (IEQ) inherent in green buildings can boost occupant health and pr oductivity. Intuitively it is known that our work and living environments impact our health and performance, which can suffer when the built environment fails to support our ability to feel healthy, comfortable, and produce. Green buildings promot e health and productivity by providing healthier work, living, and learning envi ronments, with more natural light and cleaner air. IEQ takes into consideration a broad range of human health factors including: air quality, lighting,

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44 temperature, humidity, ventilation, noise, and other factors that affect health, comfort, and productivity. The emphasis on IEQ has ex panded rapidly in the last decade, due to the large exposure of health problems caused by poor indoor environmental quality in conventional code compliant buildings, also known as Sick Building Syndrome. While many aspects of conventional buildings can make people sick, conversely, many features of green buildings can protect occupant health and boost productivity. (Kats 2003) The goal for the Indoor Envir onmental Quality strategy is to provide a healthier and more comfortable home by incorporating effi cient filtration and ventilation techniques, as well as dirt, mold, and other contaminant miti gation. All interior and exterior finishes such as paints, interior tr im, millwork, and finish carpent ry should contain low-VOC or no-VOC content to reduce chemical offgassing into the interior environment. Operable windows and ceiling fans provide cross ventilation and allow fresh outside air and breezes to cool and ventilate the home when the exterior climatic conditions allow. Exterior glazing should be am ple to encourage natural daylight ing of interior spaces. A central vacuum system is an extremely effici ent way to remove household contaminants and exhaust them to the outsi de of the home. During cons truction, ductwork should be protected from dust during installation, and air filters with a MERV value of 8 should be installed upon occupancy to reduce cont aminant infiltration into the mechanical systems. The strategies discussed above will enhance the indoor environmental quality of the home and improve health and productivity. (NHGM 2006) Florida Green Building Coalition Prior to 1998, green buildings were des igned and built based upon the combined interpretation of architects and engineers as to what comprised a green building. While

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45 this was a step in the right direction, no guidelines, assessment sy stem, or reference standards had been in place to define a trul y environmentally healthy building. To address this situation, several certification and asse ssment standards now exist in todays green building marketplace to guide t he implementation of green strategies and provide a certification level depending on the buildings specif ic shade of green. The United States Green Building Council (USGBC) has come to the forefront in guiding the implementation of sustainability in construction through its dev elopment of the Leadership in Energy and Environmental Design (LEED) buildin g assessment system. While the LEED rating system has gained wi de acceptance in both the private and public sectors, several other assessment st andards have been initiated that focus on a specific construction ty pe or geographical region. The Florida Green Building Coalition (FGB C) is a nonprofit Fl orida organization whose mission is "to lead and promote sustainabilit y with environmental, economic, and social benefits through regional education and certification programs. (FGBC 2010) The FGBC has initiated a green building cert ification system that addresses Floridas unique climatic conditions and geographical location. The FGBC defines a green home as an energy-efficient home that incorporates multiple environmental, ecological, and sustainable featur es that enhance the built environment. (FGBC 2010) The FGBC has produced a Florida Green Home Standard Check list and Reference Guide to delineate the certification criteria of a green home. Owners and devel opers can utilize these tools to guide and employ green building strategies, as well as to keep track of the associated points to achieve a desired le vel of certification.

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46 The FGBC reference guide and checklist are broken down into eight categories that address a specific element or component of the overall green building strategy. Each category contains a minimum amount of points that must be achieved for certification, and offers additional points to be awarded to allow for higher levels of certification. The sum of the point minimu ms is 80, however 100 points must be earned for FGBC certification, and therefore an additional 20 points must be achieved in any of the categories. A score of 100 will earn a Bronze level certif ication, and additional points can then earn Silver, Gold, or Platinum le vels. Table 2-2 summarizes the criteria included in the FGBC che cklist and reference guide. Table 2-2. Florida Green Buildi ng Coalition checklist summary No. Category Goal Points (Min-Max) 1 Energy Promote energy efficiency by reducing consumption and prov iding production. 30-75 2 Water Reduce interior and exterior building water consumption 15-40 3 Lot Choice Locate the si te in an environmentally favorable, previously developed area 0-15 4 Site Preserve the natural features of the site 5-30 5 Health Provide a heal thy living environment for building occupants 15-35 6 Materials Utilize environmentally friendly materials and resources 10-35 7 Disaster mitigation Provide safety from natural disasters for the home and its occupants 5-30 8 General Promote general gree n building attributes. 0-40 Total Points (100 required for certification) 80-300 Strategies that will earn points under the s pecific categories were discussed in the Green Home Building Strategy se ction of this chapter. A signi ficant point allocation (375 points) of the Energy category is attribut able to the buildings Home Energy Rating System (HERS) index. The HERS index is a numerical value that represents a

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47 buildings enhanced level of energy efficien cy above an established baseline building (based on the 2006 International Energy Conservation Code) The HERS index ranges from 0 to 100, with 100 representing the baseline building and 0 representing a net-zero energy building. Every one-point decrease in the HERS Index fewer than 100 corresponds to a 1% reduction in energy consumption compared to the HERS Reference Home. For example, a home with a HERS Index of 80 is 20% more energy efficient than the HERS Reference Home, a hom e with a HERS Index of 0 is a net-zero energy home, and a home with negative HES index produces more energy than it consumes via its photovolta ic system. (EPA and DOE 2010a) Owners who wish to have their green home ce rtified by the FGBC will complete the Florida Green Home Standard Checklist with the assistance of an FGBC Certifying Agent. Upon completion, the Certifying Agent will submit the Green Home Certification application along with the Florida Green Home Standard Checklist and any required submittals and documentation. A fee of $50 for FGBC members or $100 for nonmembers is also required. On ce the application is receiv ed and reviewed by the FGBC, which typically takes 2 to 3 weeks, the FGBC will mail an FGBC Green Home Designation certificat e to the project owner. This c oncludes the FGBC certification process and the owner will then own a certified green home. The FGBC currently has 2,270 homes certified under it s assessment system. (FGBC 2010) Government Green Building Incentives in South Florida Strategies and components t hat enhance the energy effici ency of a home typically come at a cost premi um, and therefore can be uneconom ical for homeowners with a thin budget. In order to subsidize this cost premium, the Federal Government, State Governments, municipalities, and local util ity companies are providing homeowners with

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48 financial incentives to make their energy efficient upgrades more affordable. The rational for this effort is to promote the implementation of renew able energy and energyefficient features into the built environment in order to remediate dependence on fossil fuels. The Federal Government currently prov ides a tax credit to homeowners who employ renewable energy and energy-efficient features into t heir home. Renewable energy systems that qualify for this credit include: solar water heating, photovoltaic systems, wind turbines, fuel cells, geother mal heat pumps, and other solar electric technologies. The tax credit is up to 30% of the cost of the r enewable energy system with no credit maximum, and the owner can claim this cr edit once this system is installed. In order to receive this tax cr edit, the solar system must be certified by the Solar Rating and Certification Corporation (SRCC) or another eligible state certifying program. Furthermore, the federal government is providing a tax credit to homeowners who implement energy-efficient products and strategies into thei r homes. Qualifying energy efficient features include: water heaters, furnaces, boilers, heat pumps, air conditioners, building insulation, windows, door s, roofs, and circulating fans used in a qualifying furnace. The tax credit is for 30% of the aggregate cost of these features, but the maximum credit is not to exceed $1,500. (DSIRE 2010a) The Florida State Government also offers incentives to homeowners who employ renewable energy features into their home including solar water heaters, photovoltaic systems, and solar pool heaters. The incentive is in the fo rm of a state rebate program that subsidizes the cost of the renewable energy component by providing a cash rebate of $4/WATT with a maximum rebate of $20,000. To receive this cash rebate, the

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49 photovoltaic system must be at least 2 kW in size, be certified by the Florida Solar Energy Center, and be installed by a licensed master electr ician or state-licensed solar contractor or certified general contractor. Rebates are also available for solar water heaters with a maximum of $500, and for sola r pool heaters with a maximum of $100. Solar water heaters must provide at least 50% of a buildings hot water consumption to receive this cash rebate. A state-licensed sola r, roofing, plumbing, or certified general contractor must install both sola r water and pool heaters. (DSIRE 2010) South Floridas local utility companies and municipal governments have also provided incentives to prom ote green building and energy e fficiency. The Miami-Dade County has implemented the Green Buildings Expedite Process, which provides an expedited review and approval of permit applic ations for green buildings located in the county. Qualifying green buildings must be certified by the FGBC, NAHB, or USGBC. The Florida Power and Light (FPL) Company, S outh Floridas leading supplier of electric utilities, also has implemented a program to promote residential energy efficiency. FPL offers rebate to residential co stumers who employ energy-effi cient features into their homes. The rebate applies to existing (no new construction) homeowners who upgrade their air conditioner or heat pump to a more efficient one, add ceiling insulation, or have a duct system test performed on their home. Rebates range from $140-$1,930 for upgrading HVAC systems, $0.11 per square foot for upgrading ce iling insulation, and $60-$154 towards upgrading or fi xing ductwork. (DSIRE 2010) Green Home Mortgages As the green building s ector continues to gain market share, a growing number or lenders and government agencies are now offeri ng financial incentives to borrowers who live in energy-efficient homes. Borrowers who are either upgrading energy-efficient

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50 technologies in their existing homes or ar e purchasing a new energy-efficient home may qualify for a variety of green loan packages. Lenders are offering a variety of incentives from reductions in closing costs to lower l oan interest rates, sometimes a half-point or more below the current market rate. The rational behind this loan structure is that lenders realize that energy-efficient homes make homes more affordable on a monthly basis and provide more security for payment s from borrowers. For this reason, lenders typically require an energy audit be performed on the house and a HERS index be obtained to substantiate the homes enhanc ed energy-efficiency. In fact, some programs, such as myEnergyloan, provide a performancebased incentive based on the homes level of energy-efficiency. (Prior 2009) Financial incentives for energy-efficient homes come in several forms. One common incentive offered by lenders is a reduction on the loan closing costs. J.P Morgan Chase and Co. offers customers $500 and Bank of America offers up to $1,000 in closing cost credit for homes that meet Energy Star requireme nts. Closing costs are typically 3% of the loan, and therefore this incentive can represent substantial savings. Other lenders who sell their loans to the publ ic secondary market, such as CitiMortgage and Bank of America's Countrywide Financial, offer loan packages that take into account monthly energy savings and allow these savings to be added into the borrowers qualifying income, which may allow the borrower to acquire a larger loan. Other mortgage lenders work with programs like myEnergyloan to help borrowers save on interest rates. The myEnergyloan progr am provides a perfo rmance-based incentive for borrowers to achieve high levels of energy -efficiency to reduce their monthly interest rate. For every percentage increase in energy-e fficiency, the borrower will receive a one

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51 basis point discount off of the principal co st of the mortgage. For example, a 50% efficiency improvement would give the borro wer a discount of .5% off the principle mortgage rate. This could bring a savings of more than $56,000 over the life of a $500,000, 30-year fixed-rate loan with an original rate of 5.8%. (Prior 2009) The Federal Housing Administration (FHA) offers similar energy-efficient incentive based programs through its Energy Efficient Mortgages (EEM) and Energy Improvement Mortgages (EIM). An EEM is a mortgage that credits a homes energy efficiency into the mortgage, which allows borrowers to finance cost-effective, energy efficient upgrades by qualifying for a larger loan. To qualify for an EEM, a borrower must have a home energy rater conduct an energy audit and determine the HERS index to substantiate the level of energy-efficiency in the home. The energy savings calculated through the energy audit are added to the qualifyi ng buyers income, which will increase the borrowers purchasing power and allow the borrower to obtain a larger loan. The Federal Housing Administrations EEMs allow lenders to add 100 % of the additional cost of energy efficiency improvements to an already approved mortgage loan without an additional down payment. The additional ener gy improvement costs cannot exceed $4000, or 5% of the value of the home up to $8,000; whichever is greater. In conclusion, these green home loans administered by the primary and secondary markets help buyers and borrowers afford cost-effectiv e energy efficient improvements and new homes. These EEMs and EIMs are an effect ive vehicle to bringing down the green building cost premium. (Prior 2009)

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52 CHAPTER 3 RESEARCH METHODOLOGY The studys objective is to demonstrate t hat green building in t he residential sector is a wise business direction for developers and contractors, as well as a good investment for homeowners. To support this theory, the researcher has performed a case study on an actual custom home that is to be built in South Florida, and analyzed the potential for green strategy impl ementation based on performance, costeffectiveness, and consumer demand. The ho listic green home strategy focused on energy efficiency, renewable energy, wa ter conservation, green materials and resources, site and landscaping, and indoor en vironmental quality. The researcher then performed a comparative economic, energy, and value analysis on the conventional custom home and the upgraded green certified hom e, to determine the true green cost premium and the life cycle cost benefits. The methodology included the following steps: 1. Acquired construction documents, cost breakdowns, construction estimates, and subcontracts for a custom home that is to be built in Ft Lauderdale, Florida. 2. Developed a holistic green strategy to be implemented into the design and construction of the home. The strategy was devised to meet the certification requirements of the Florida Green Building Coaliti on, and considerations were taken to maintain the high-end feat ures of the custom home. 3. Subcontractors to perform various scopes of work were contacted and quotes were provided for the conventional custom home and the green custom home, as per the researchers scope upgrade. 4. Performed energy modeling of the two homes to determi ne the effectiveness of the overall green strategy on reducing energy consumption and effect on monthly utility bills. Energy gauge software was utilized and a HERS Index was obtained. 5. Implemented tax incentiv es, rebates and an energy efficient mortgage for the green home. 6. Determined the total and monthly cost of the base home and the green home, incorporating the green features, savings, inc entives, and mortgage.

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53 7. A financial model was creat ed to determine the green cost premium, monthly cost comparison, life cycle benefits, builders profit, and the homeowners return on investment and payback period.

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54 CHAPTER 4 RESULTS AND ANALYSIS The results and analys is section begins with a description of the custom home that was utilized for this case study, detailing attr ibutes of the home as originally designed. Next, the holistic green strategy that was developed for the home is developed, followed by a detailed explanation of each component t hat was upgraded. Cost implications for each component upgrade are then discussed and aggregated in a comparison of the total cost of the base home and the green home. To determine the effect of the upgraded home design on energy consumption, Energy Gauge software was utilized and the results of the simulations are presented. The home has been redesigned to meet the certification requirements of t he FGBC, and the checklist is presented to demonstrate the strategies that were im plemented and where points were obtained. Finally, a monthly cost comparison and life cycle analysis is presented to demonstrate the cost premium, payback perio ds, and return on investment. Custom Home Information The custom home utilized for this ca se study is the Bascombe Residence, located in the Sea Ranch Lakes community of Fort Lauderdale, Florida. The infill lot borders the intercoastal waterway on two sides and spans 7093 feet. The five bedroom, 6 bathroom, two-story cust om home spans 5014 square feet and is designed in the Mediterranean style, featuring many luxurious design attributes and amenities. The custom home was designed by Randall Stofft Architects and to be constructed by Albanese Development, both of the South Florida area. At the time of the study, the home was in the process of being bought out by subcontractors, which allowed the

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55 researcher to acquire both conventional and upgraded green quotes for the various scopes of work. Construction had not yet started at the time of the study. The construction documents call for a M editerranean home design that features high-end architectural aesthetics, finishes, and detail. The walls are constructed of concrete block and allow for a significant amount of glazing at all elevations. Saturnia marble tile has been specified for the majori ty of the home, and all interior finishes including trim, millwork, countertops, ceilings, moldings, and columns are to be custom and high-end in nature. Covered balconies and patios at the north and west elevations allow for views and breezes of Floridas intercoastal waterway. Figures 4-1 through 4-6 show the site plan, floor plans, and elevations. A primary goal of the green strategy im plementation was to maintain the high-end architectural aesthetics of the home. Homebuyers typically do not want to sacrifice these aesthetics and amenities for green featur es such as solar panels because they impose on the design of the home. The researc her did not want to alter the architects design, and therefore strategies were implemented that would complement the existing design. The base custom home design has an estimated cost of $1,160,000 based on the conceptual estimates, cost allow ances and budgets, and subcontracts. The researcher intended on developing cost effe ctive green strategies that will enhance the value of the home and considerations were taken to stay within the owners budget.

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56 Figure 4-1. Custom home first floor plan

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57 Figure 4-2. Custom home second floor plan

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58 Figure 4-3. Custom home east and west elevation

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59 Figure 4-4. Custom home nor th and south elevations

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60 Green Systems Strategy In developing the green strategy to be implemented into the design and construction of the home, the researcher t ook a holistic approach that would incorporate the major elements of green bui ldings inc luding: energy efficiency, water conservation, site and landscaping, materials and resources, and indoor environmental quality. The researcher utilized the FGBC Home St andard Reference Guide, energy modeling software, and industry establis hed green principles and feat ures to develop the overall green strategy for the home. The goal of this case study was to deliver a cost-effective, high-end green custom home that reduces energy use and utility bills, reduces the adverse effects on the environment, and prov ides elevated health and comfort to the homes occupants. To achieve this goal, t he researcher upgraded t he home to meet the certification requirements of the FGBC, provided cost-effec tive green strategies that would reduce energy consumption and water us e, and maintained t he high-end custom nature of the home without sacrificing architectural aes thetics and comforts. While the design and orientat ion of the home are the foundation of the overall green strategy, these elements were not alter ed in order to maintain the architectural aesthetics and spatial arrangement of the home and site. Considerations were taken by the architect to achieve a practical leve l of design and orient ation efficiency, and therefore these elements did not warrant a significant need fo r alteration. The intention of this study was to upgrade the features of the existing home desi gn, not to redesign the home into a different one. Furthermore due to the high-end cu stom nature of the home, many of the homes originally specified design components contribute to the overall greenness of the home, such as the tight thermally resistant building envelope.

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61 The successful execution of the overa ll green strategy depends upon the synergy created by the various element s. The following sub sections breakdown the individual green strategy upgrades by scope of work or component. For each section, the researcher developed a gr een strategy based upon the FGBC requirements and industry accepted green practices. The rese archer then consulted with the appropriate subcontractor or manufacturer to develop a cost-effective and suitable strategy. For each scope of work, the researcher obt ained two quotes; the first quote was based upon the homes original construction documents, and the second quote is based upon the green component upgrade. Heating, Ventilation, a nd Air Conditioning Sy stem The goal for the HVAC strategy was to reduce energy consumpt ion by installing a properly sized, high-efficiency (high SEER) s ystem. The ductwork was to be insulated, sealed with mastic, and located in conditi oned space to reduce heat transfer into the ducts. Digital programmable thermostats were to be provided for all locations. The researcher contacted the HVAC subc ontractor Perfect Cooling for pricing information for both a code compliant system and high-efficiency system, as per the researchers recommendations. Three price quotes were provided; one being the code compliant system and the other two being upgraded SEER packages. The table below summarizes the three quotes provided. Table 4-1. Heating, ventilating, and air conditioning options for custom residence HVAC options System size SEER price Code compliant One 5-ton, tw o 4-ton 13, 13, 13 $21,000 1s t upgrade One 5-ton, two 4ton 14, 16, 16 $23,800 2n d upgrade One 5-ton, two 4-ton 18, 17.5, 17.5 $31,000

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62 Additionally, all three quotes include: three digital programmabl e thermostats, R-6 flexible ductwork with duct board plenums sealed with mastic, one exhaust for dryer, seven 50 cfm exhaust fans, and one kitchen hood vent to exterior. The HVAC subcontractor recommended an Energy Star exhaust fan upgrade to for an incremental cost of $783.93. The researcher and subcontractor agreed that the 1st upgrade package was best suited for the resi dence based on system sizing and costeffectiveness at an increm ental cost of $2,800. Water Heating Water heating is a significant energy c onsumer and a substantial monthly cost, and therefore the goal of this strategy was to reduce hot water energy consumption by specifying highly efficient products. The or iginal construction documents call for a 120gallon insulated electric water heater manuf actured by Vanguard. The energy efficient water heater features polyure thane foam insulation and an energy factor of .85, and costs $1111.70. The researcher explored various options to increase the efficiency of the water heating system, and found the most cost-effective and efficient system to be an Energy Star qualified heat pump water h eater. According to Energy Star, this innovative technology can save the aver age household almost $300 per year on its electric bills compared to a standard electric water heater. (EPA and DOE 2010) The A7 AirTap manufactured by Airgenerate is an addon heat pump that can be attached to a conventional electric or gas water heater. The add-on heat pump acts as a conventional heat pump, using a compressor to extract heat from the surrounding air and sending this heat into the water tank. According to the Airgenerate websit e, this add-on heat pump model will cut water heating costs in half, saving $200-$300 a year on energy bills. The A7 AirTap add-on heat pump can be purchased for $700. (Airgenerate 2009)

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63 Windows and Doors The custom home construction documents call for a si gnificant amount of glazing, especially at the east and west elevations. Over half of the exterior envelope is consumed by windows and glass doors, which allow for natural ventilation, abundant daylighting, and views of the intercoastal wa terway. Due to the s ubstantial amount of glazing in the building envelope, the performance of the windows and doors is paramount. The goal of the window and doors strategy is to enhance the thermal efficiency of the envelope by providing glazing that insulates, reduces solar heat gain, and provides superior protecti on from the outside elements In order to accomplish these goals, the researcher specifi ed a window upgrade pack age with the following specifications: Low-E glazing, double pane glass with argon gas fill, a low SHGC (less than .3), and a low U-factor. The upgr aded windows also needed to meet the certification requirements of the National Fenestration Rating Council (NFRC). These window characteristics will enhance the therma l efficiency of the building envelope by reducing solar heat gain and improving the insulation value of the wall assembly. The researcher met with subcontractor Tad Pelkey of American Glass to determine the specifications and prici ng for the upgraded window package. The originally specified windows were operabl e and hurricane resistant, but the glazing needed to be upgraded to reduce solar heat gain. The efficient window package per the researchers spec upgrade incurred an incremental cost of $18,628.38. The technical aspects and pricing of the windows and doors are summarized in the figure below.

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64 Table 4-2. Window and door packages for custom home Base Windows Type Model Manufacturer Frame U-factor SHGC VT Glazing Layers Low-E GapFill Fixed 701 series PGT Industries Aluminum 0.6 0.65 0.72 2 No Air Casement 740 series PGT Industries Aluminum 0.77 0.51 0.53 2 No Air Base Glass Doors Type Model Manufacturer Frame U-factor SHGC VT Glazing Layers Low-E GapFill French Door 450 Series CGI Aluminum 0.943 0.721 0.86 2 No Air Total Cost $104,308.24 Upgraded Windows Type Model Manufacturer Frame U-factor SHGC VT Glazing Layers Low-E GapFill Fixed 238 series CGI Aluminum 0.56 0.28 0.49 2 Yes (.215) Argon Casement 238 series CGI Aluminum 0. 66 0.27 0.49 2 Yes (.022) Argon Upgraded Glass Doors Type Model Manufacturer Frame U-factor SHGC VT Glazing Layers Low-E GapFill French Door 450 Series CGI Aluminum 0.516 0.637 0.86 2 Yes Air Total Cost $122,936.62 Incremental Cost $18,628.38

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65 Lighting The goal of the lighting strategy was to decrease energy use by substituting CFL or LED bulbs for the incandescent bulbs lo cated throughout the home. The electrical subcontractor indicated that the use of CFL or LED bulbs is an effective strategy for reducing energy consumption via electricity. The specifications for the base custom home lighting package include 130 light fixtures to house PAR 30 75-WATT incandescent bulbs. The researcher priced out the cost for each incandescent bulb at $9.47, each CFL bulb at $18.99, and each LED bul b at $65.99. This results in a total incremental cost of $1,237.60 for CFLs and $7,347.60 for LED bulbs when compared to incandescent bulbs. The researcher was adv ised by the subcontractor not to include LED fixtures, as they were not as cost-effective and dont allow the owner to utilize a different bulb if desired for specialty light ing. In conclusion, while LED bulbs boast longer life spans and enhanced energy efficiency, the bulbs did not prove to be costeffective due to their high price. CFL bulbs were specified for the lighting electrical scope upgrade due to their lower incremental cost, enhanced life span, and impact on energy reduction. Roof System The goal of the roof system upgrade was to provide a thermally efficient roof system that reduces solar heat gain and pr ovides photovoltaic integration. The researcher developed t he roofing strategy with Graboski R oofing of Delray Beach, FL, a subcontractor who has embraced the green bu ilding movement and provides a variety of quality energy saving and producing roof system s. The roof area of the residence is 5,713 square feet and has a sl ope of 4:12. The original construction documents called for a typical custom home roof system with the following specifications: flat concrete

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66 roof tiles nailed to a #90 hot mopped under layment membrane, attached to #30 ASTM asphalt felt tin tagged to the roof wood sheat hing. The tile was to be an autumn wood colored Monier Madera shake flat tile, and th erefore would provide a high level of solar absorbance and increase solar heat gain. This scope of work, including all of the typical roof weatherization and func tional features, was quoted at $55,840.00, with nearly $16,000 of this cost attri butable to the roof tile. To upgrade the roof system the researcher and roofer developed a cost-effective strategy that incorporates a ventilated roof deck, utilizes recycled materials, provides enhanced hurricane and thermal resistance, utilizes cool roof tiles to reflect heat gain, and provides aesthetically attractive photovol taic integration. This was accomplished by utilizing products and methods manufactured by Eagle Green Roofing. Eagle Green has created a roof design that ventilates the air space between the r oof deck and the tile; where air can enter into the roof eave, travel through the elevated tiles, and is exhausted at the ridge. A 1995 study conducted at the Oak Ridge Na tional Laboratories found a 48% reduction in heat transfer into t he attic with tile roofs installed using ASV (above sheathing ventilation) when compared to a direct nailed asphalt shingle roof (cite). Figure 4-5 details the design of the Eagle Energy Saving Roof. Eagle Roofing manufactures a wide variety of cool roof tiles that reflect the suns solar heat gain, thus reducing the energy needed to cool the home. According to Eagle Roofing, these ENERGY STAR approved tile s can provide energy savings of 10-30% compared to conventional tiles. E agle offers nearly 50 types of cool roof tiles that vary in color, shape and solar absorptance. The upgr aded roof tile for the custom home will feature Eagles Capistrano Sun Valley t ile with a high SRI of 87 and a low solar

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67 absorptance of 29%. This tile was chosen to closely mimic the color of the originally specified tile, while improving the thermal efficiency of the roof system. Furthermore, this cool roof tile seamlessly integrates with the photovoltaic system to be discussed in the next section. Figure 4-5. Eagle Green energy saving roof The roof ridge will feature an innovative product called the Top Notch Ridge, which is a ridge member for tile roof systems made from 100% recycled plastic and boasts superior uplift resistance and increased longevity of the roof system Both the roofing tiles and the Top Notch roof ridge connecti ons will be upgraded to a polyfoam adhesive in lieu of the nail on system This provides for less penetrations and thermal bridging, which increases the thermal effici ency of the entir e roof system.

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68 The total incremental cost of the efficient roof upgr ade was not significant for several reasons. First, some of the features in the roof s ystem were provided in both quotes, such as the Top Notch roof ridge. Second, the cost of the various upgrades typically equated the cost of the scope originally specified. Third, in some cases an increase in one component compensated fo r a decrease in another. There was an incremental cost of $1,250 for the polyf oam adhesive upgrade, and materials needed for the ventilated roof deck resulted in an in cremental cost of $1, 850. The originally specified shake tile was quite costly however and therefore the upgr aded cool roof tiles were nearly $1,300 cheaper. The total quote provided for the upgraded energy efficient roof system arrived at $57,640.00, only a $1, 800 incremental cost increase from the base custom home quote. The resulting roof system will reduce heat transfer into the home thus reducing cooling costs. Photovoltaic System Once the energy consumption for the home was reduced thr ough the synergy of an efficient envelope design and mechanical syst em selection, the potential for energy production was explor ed. The goal for the photovoltaic system was to utilize an innovative technology that would offset ener gy use and not impose on the architectural aesthetics of the home. The researcher me t with the owner of Gr aboski Roofing, Tim Graboski, who has recently initiated a Solar Solutions program to provide photovoltaic integration into the roof systems his com pany constructs. The PV system selected for the custom home is the Solar Blend model manufactured by Suntech. The Solar Blend product incorporates an innovative technology that seamlessly integrates with the Eagle Cool Roof Tiles to provide an aes thetically attractive appearance.

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69 The researcher and subcontractor dete rmined that a 5kW PV system was most suitable for the home, as it maximizes t he value of government rebates and provides approximately 33% of the hom es total energy or 6754 kWh annually. An ideal area on the south facing roof surface was selected to place the PV system, which requires 800 square feet of space. The total cost of the PV system was quot ed at $43,800 or $8.76 per watt by Graboski Roofing. The qualifying PV system ma ximized the States rebate of $20,000 and the Federal tax credit of $13,140, resulting in a net cost of $10,660. Figure 4-6 was provided by Graboski Roofing and details the cost and payback information as well as the return on investment for the 5 kW system. The payback analysis demonstrates the net cost and financing of the photovoltaic system, the expected energy production, and expected energy inflation over a 30 year time period. The analysis demonstrates a se ven-year back for the net cost of the photovoltaic system, and escalating savings ar e realized for the years beyond. Without the incentives and rebates provided by bot h the state and feder al government the feasibility of photovoltaic in tegration would suffer as th e payback period would be over three times as long. Insulation The goal of the insulation strategy is to enhance the thermal efficiency of the building envelope by providing high levels of insulation at the walls, floors, ceilings, and roof. The original construction documents for the custom home specify efficient insulation levels that did not need to be upgraded for increased thermal efficiency. The insulation specifications are as follows: R-30 Fiberglass Batt insulation at 2nd level ceilings, R-19 Fiberglass Batt insulation at t he second level floor, and R-4.1 Fiberglass

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70 Figure 4-6. Photovoltaic system cost and payback analysis

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71 Batt insulation at CMU walls for a total wall system R-Value of 13. This insulation package was quoted at a price of $6514 by Jensen Insulation. The attic typically experienc es the most extreme levels of heat gain due its location under the roof system. The heat is then transferred through the ceiling into the home, and the ductwork that rests in the attic must overwork to compensate for this heat gain. The researcher and subcontractor developed a strategy to seal and condition the attic space with R-20 icynene spray foam in sulation at the roof sheathing. This will result in cooler temperatures in the attic, which will reduce heat transfer into the home and allow the ducts to rest in unvented c onditioned space. The icynene spray foam insulation upgrade was quoted at $2,491 for a total insulation package at $9,005. Water Conservation The goal for water conservation was to r educe the homes demand for exterior and interior water consumption. This was acco mplish ed by utilizing reclaimed rainwater for irrigation and specifying ultra low-flow plum bing fixtures throughout the home. Toilets were specified to provide a flush rate of 1.0 gallon per flush (gpf ) as opposed to the 1.6gpf code-compliant counterpart. Showerheads were specified to provide flow rates of 1.75 gallons per minute (gpm) as opposed to the 2.75-gpm code-compliant counterpart. Low-flow aerators were specified to reduce the flow rate on all faucets. The original construction documents spec ified all plumbing fixtures including toilets, lavatories, sinks, faucets, and showerheads to be manufactured by Kohler. Kohler is an industry leader when it comes to providing efficient and elegant plumbing fixtures, and has won the EPAs WaterSense Manufacturing Partner of the Year for 2008 and 2009. (USEPA 2010) For each plumbing fixture, Kohler offers a standard model and an ultra low-flow model, typically at the same price. In fact, the master bath

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72 and powder room toilets realized a $50 price decrease for the low-flow models. The resulting net incremental cost for all plumbing fixture upgrades was $70. The plumbing subcontractor, Soltys Plumbing, also informed the researcher that the steam feature in the master shower is both water and energy c onserving, using only 1 gallon of water for a 30 minute use. Table 4-3 provides a price breakdown for the upgraded plumbing fixtures. Landscape and Irrigation This goal f or the landscaping and irrigation strategy was to reduce water consumption and maintenance by specifying native drought tole rant plant species and a rainwater harvesting system. The original construction documents call for a landscape with exotic vegetation and fo liage, freeform planting area s and flowering beds, and an extensive irrigation system. Master Gardeners of Boca Raton, FL quoted this landscape design at $22,800. The researcher and landscape architect developed a greener scheme that specifies drought tolerant turf and plant species that are compatible with the Floridas microclimate. Small grass areas are featur ed and no sod will be utilized on berms. A heavier layer of non-cypress mulch will be used, and the soil is to be tested and amended where necessary to cut down on fertiliz ation requirements. There will be an on site retention area to keep water on site, as well as an area for a food garden. A 1500gallon rainwater collection cistern will be install ed and buried on the right side of the house to be used for irrigation and other non-pot able purposes. The water will collect at the roof and be transport ed to the underground cistern via the gutter and downspout system. The water is pumped from the cist ern to the irrigation system, which is designed to water sod areas separately fr om shrubs and food garden. Additionally,

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73 Table 4-3. Plumbing fixt ure upgrade cost breakdown Fixture Model Quantity Standard price Upgraded price Standard total Upgraded total Incremental cost Master and powder toilet K3466 2 $810 $785 $1,620 $1,570 $(50) Bedroom toilets K3422 4 $300 $300 $1,200 $1,200 $Master and powder faucet K310 3 $620 $620 $1,860 $1,860 $Master shower K16166 1 $75.00 $86 $75 $86 $11 Bedroom showers K10590 4 $65.00 $86 $260 $344 $84 Bedroom faucets K12265 4 $270.00 $270 $1,080 $1,080 $Kitchen sink K15160 1 $245.00 $245.00 $245.00 $245 $Faucet low-flow aerators 8 $$3.00 $$24 $24 Total cost $6340$6410 $70

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74 shade trees will be planted on the south and west sides of the house to shade the home from the suns heat and thus reduce cooling requirements. This greener landscape scheme will command an increm ental cost of $3,300. Appliances and Electronics The goal of the appliance and electronics st rategy was to reduce energy use by these components by specifying ENERGY ST AR qualified products throughout the house. The researcher met with Florida Buil der Appliances to obtain pricing for a traditional custom home appliance package and an ENERGY STAR appliance package. The researcher was informed that due to customer demand and manufacturer product upgrades, appliance packages typically furnis hed in custom homes are ENERGY STAR qualified. High-end appliance m anufactures such as Subzero, Miele, Kitchen Aid, and Whirlpool typically manufacture ENERGY STAR qualified products at the same price as the conventional counterpart. Th erefore, the appliance pack age would remain the same for both the base custom and gr een custom home models at a cost of $15,048. All kitchen appliances are to be manufactured by Kitchen Aid and laundry equipment is to be manufactured by Whirlpool. Interior and Exterior Finishes The interior and exterior finishes were s pecified to be light in color to reduce solar absorption, contain low-VOC interior finis hes to boost indoor environmental quality, and utilize recycled materials to lessen the resource extraction burden on the environment. All exterior and interior paints were spec ified to be light colored to reduce solar absorption and contain to low-VO C content and to reduce interior off gassing. The paint subcontractor indicated this would incur no addi tional cost. Additionally, all interior trim, millwork, and finish carpentry has been specif ied to contain low-VOC content to reduce

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75 interior off gassing. As consumers are becoming more concer ned with sick building syndrome, healthier interior finishes hav e become more common in the marketplace and therefore would incur no additional cost. The construction documents call for nearly 75% of the homes interior spaces to be 18 x 18 saturnia straight marble floori ng, with the remaining spaces to be carpet. The substantial amount of ma rble tile flooring contributes to passive-earth contact cooling and reduces energy use by keeping t he floors cooler during hot weather. While marble isnt necessarily an eco-unfriendly mate rial, the researcher explored the option of a cost-effective marble alternat ive that would enhance IEQ and negate the environmental burden of natural resource extraction. Agglomerate Marble is a manufactured innovative marble alternative that consists of powders and granules of marble mixed with resins. The agglomerat e flooring interacts with the surrounding environment by reducing the chemical and biol ogical pollutants in the air, including Volatile Organic Compounds, and other atmospher ic pollutants. The finished product is nearly identical to traditional marble floori ng, and at $3.50 per square foot this flooring alternative is $4,000 cheaper than the originally specified ma rble for the custom home. The homes remaining flooring is specifi ed to be carpet, and the supplier Carpet Connection informed the researcher that utilizing Green Label certified low-VOC recycled carpet would incur no additional cost. The construction documents called for granite countertops for the kitchen and all vanities throughout the house. The researc her searched out an eco-friendly granite countertop alternative and found an attracti ve recycled glass and concrete countertop manufactured by IceStone. The material is made from 100% recycled glass and

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76 concrete and neither contains or emits volatile organic compounds. The IceStone product comes in a variety of finishes and colors and costs $100 per square foot installed, which is comparable to the pric e of granite and ther efore will incur no incremental cost. The eco-friendly and health y finishes featured in this home will contribute to the homes overall greenne ss and is nearly $4,000 cheaper than the originally specified finishes. Indoor Environmental Quality The goal for the Indoor Envir onmental Quality strategy is to provide a healthier and more comfortable home by incorporating effi cient filtration and ventilation tec hniques, as well as dirt, mold, and other contaminant miti gation. Several of the homes features that were implemented in the original construc tion documents contribute to enhanced indoor environmental quality. Operable windows and ceiling fans provide cross ventilation and allow fresh outside air and breezes to cool and ventilate the home when the exterior climatic conditions allow. Both operable windows and ceiling fans have been specified in the original construction documents and therefore incur no incremental cost. A central vacuum system is an extremely efficient way to remove household contaminants and exhaust them to the outside of the home. This system also was already specified in the original construction documents and incurs no incremental cost. The FGBC checklist allows several points for meeting the above criteria. The HVAC subcontractor, Perfect Cooling, provided recommendations to increase the indoor environmental qualit y of the home. The subcontractor specified ENERGY STAR ventilation fan upgrades for all bathrooms at a price of $200 per location, totaling in at $1400 for the seven loca tions, or an incremental cost of $783.93. These fans boast superior ventilation, noise reduction, and energy savings. Furthermore, the

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77 subcontractor recommended the installation of RGFs Guardian Air PHI Cell into the homes HVAC system to c ounter sick building syndrom e. These cells utilize Photohydro-ionization (PHI) technology to eliminate up to 85% of odors, VOCs and gases, as well as 99% of microbials includ ing swine flue and other viruses. (RFG 2000) These PHI cells are easily installed in the HVAC ductwork and utilize an advanced oxidation process to remove contaminants from the air. Each PHI cell costs $900 and will be installed in each of the homes three HVAC systems, for a total cost of $2,700. Additionally, air filter s with a MERV value of 8 will be inst alled in all return locations at no incremental cost. The combination of oper able windows, cross ventilation, central vacuum system, ENERGY STAR ventilati on fans, low-VOC materials, PHI cell technology, and efficient air filters at all returns will enhance the indoor environmental quality of the home. Total Cost Comparison In order to determine the true green cost premium for the custom home, the total cost of the base home and the green home were determined. Based upon the construction documents, cost budgets, estimates, and quotes provided from subcontractors, the researc her was adequately able to determine the total cost for each model. The researcher aggregated the cost of the discussed green upgrades along with costs that remained the same between the two designs. The researcher concluded that there is 4% cost premium of approxim ately $41,500 for the green upgraded home. The researcher found that many elements of a green home were already specified in the base home, such as central vacuum syst em, Energy Star appliances, and cross ventilation strategy. Furthermore, many of the green upgrades did not require an incremental cost, such as the IceStone Co untertops, low-VOC materials and finishes,

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78 and low-flow fixtures. Table 4-4 represents the total cost breakdown for the two home designs including all aggregated costs, and Table 4-5 breaks down the isolated green cost upgrades and describes the scope upgrade Table 4-4. Total cost comparison of base and custom home CSI # Scope of work Base custom Green custom Cost difference 1.000 General conditions $120,000 $120,000 $0 1.090 Final cleaning $3,000 $3,000 $0 2.000 Earthwork $0 2.350 Site rough grade $3,500 $3,500 $0 2.365 In-Wall pest control $1,754 $1,754 $0 2.517 Pavers $10,000 $10,000 $0 2.890 Landscaping and irrigation $22,800 $26,100 $3,300 3.000 Concrete $0 3.110 Shell $169,518 $169,518 $0 4.000 Masonry $0 4.435 Precast stone $87,173 $87,173 $0 5.000 Metals $0 5.300 Metal handrail $5,000 $5,000 $0 6.000 Woods and plastics $0 6.190 Wood trusses $16,600 $16,600 $0 6.200 Interior finish carpentry $23,000 $23,000 $0 6.411 Cabinets and built-ins $40,000 $40,000 $0 6.430 Finish carpentry $30,000 $30,000 $0 7.000 Thermal and moisture $0 7.200 Building insulation $6,514 $9,005 $2,491 7.500 Roof system $55,840 $57,640 $1,800 7.900 Sealants $1,250 $1,250 $0 8.000 Doors and windows $0 8.200 Entry doors $15,000 $15,000 $0 8.210 Interior doors $8,000 $8,000 $0 8.300 Overhead doors $3,580 $3,580 $0 8.813 Glass shower enclosures $3,500 $3,500 $0 8.830 Mirrors $2,500 $2,500 $0 8.500 Door hardware $2,800 $2,800 $0 8.610 Metal windows and doors $104,308 $122,937 $18,629 9.000 Finishes $0 9.100 Stucco $41,200 $41,200 $0 9.200 Drywall $41,085 $41,085 $0 9.340 Marble flooring $39,275 $35,196 -$4,079

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79 Table 4-4. continued CSI # Scope of Work Base Custom Green Custom Cost Difference 9.347 Granite countertops $17,500 $17,500 9.610 Carpet $7,700 $7,700 $0 9.900 Paint $21,600 $21,600 $0 10.000 Specialties $0 10.350 Summer kitchen $25,000 $25,000 $0 10.420 Fireplace and surrounds $19,500 $19,500 $0 10.670 Ventilated wood shel ving $8,500 $8,500 $0 11.000 Equipment $0 11.051 Central vacuum system $2,200 $2,200 $0 11.410 Appliances $15,048 $15,048 $0 15.614 Gas system $10,000 $10,000 $0 13.000 Special construction $0 13.100 Photovoltaic system $$43,800 $43,800 15.000 Mechanical $0 15.100 Plumbing $46,100 $46,170 $70 15.200 Hot Water system $1,112 $1,812 $700 15.810 Venting systems $476 $1,260 $784 15.710 HVAC $21,000 $23,800 $2,800 15.800 Filtration $$2,700 $2,700 16.100 Electrical $44,647 $45,885 $1,238 16.200 Low volt rough elec trical $6,600 $6,600 $0 Less incentives and rebates $(34,640) Total cost $1,104,179 $1,143,771 $39,592 Cost per square foot $220 $228 $8 Profit @ 5% $55,209 $57,189 $1,980 Total building cost $1,159,388 $1,200,960 $41,572 Green premium 4%

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80 Table 4-5. Green scope of work breakdown Scope of work Base custom Green custom Cost difference Scope difference Green scope Landscaping and irrigation $22,800 $26,100 $3,300.00 Xeriscaping and rainwater harvesting Water conservation Interior finish carpentry $23,000 $23,000 $Low-VOC finishes IEQ Cabinets and built-ins $40,000 $40,000 $Low-VOC finishes IEQ Building insulation $6,514 $9,005 $2,491.00 Isonyne insulation at the attic Energy Roof system $55,840 $57,640 $1,800.00 Ener gy efficient roof system Energy Sealants $1,250 $1,250 $Low-VOC IEQ Metal windows and doors $104,308 $122,937 $18,628 Low-E, low SHGC, low U-value Energy Marble flooring $39,275 $35,196 $(4,079)Marble agglomerate altern ative IEQ, Materials Granite countertops $17,500 $17,500 $IceStone countertops IEQ, Materials Carpet $7,700 $7,700 $Low-voc recycled IEQ, Materials Paint $21,600 $21,600 $Light colored, low-VOC, recycled IEQ, Materials, Energy Central vacuum system $2,200 $2,200 $Improved IEQ IEQ Appliances $15,048 $15,048 $Energy Star throughout Energy Photovoltaic system $$43,800 $43, 800.00 5 kW PV s ystem Energy Plumbing $46,100 $46,170 $70.00 Low-flow, dual flush fixtures Water conservation Hot water system $1,112 $1,812 $700.00 Add on heat pump Energy Venting systems $476 $1,260 $783.93 ENERGY STAR vents Energy, IEQ HVAC $21,000 $23,800 $2,800.00 Hi gh efficiency (SEER) Energy Filtration $$2,700 $2,700.00 Guardian Air PHI cells IEQ Electrical $44,647 $45,885 $1,237. 60 CFL throughout house Energy Less incentives and rebates $(34,640) Total scope cost $470,369 $509,961 $39,592

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81 Energy Modeling While the green custom home carries the cost premium for t he upgraded features, this premium is paid back through cumulative energy savings attributable to the synergy of these features. To determi ne the energy consumption of the base custom home and the upgraded green custom home, the re searcher performed energy modeling simulations of the two designs. The resear cher utilized Energy Gauge software, which allows the user to input various design attri butes and features of the home to determine annual energy consumption and cost. Additi onally, the simulation software assigns a HERS index to the home design, which indica tes its level of energy efficiency compared to a referenced baseline. The first simulation was performed on the base custom home design. The simulation results revealed both a high HERS index and high level of energy consumption. The HERS inde x for the base home was 109, indicating that the home is energy inefficient even com pared to the baseline. Total energy consumption for the home was 37,588 kWh and 68 therms, transla ting into a $3501 annual energy bill. Figures 4-7 through 4-9 show the Energy Gauge building inputs, the annual energy consumption, and the HERS repor t for the base custom home. The second simulation incorporated a ll of the discussed upgraded features and the results were much more favorable. The HERS inde x for the upgraded green custom home was 42, nearly 65% more efficient than the base home design. Total energy consumption for the home was 22,484 kWh and 68 therms, translating into a $1,534 annual energy bill. Figures 4-10 through 4-12 show the Energy Gauge building inputs, the annual energy consumption, and the HERS report for t he green custom home.

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82 A comparison of the results of the two energy simulation s supports the theory that the green custom home reduces energy consumption and the associated utility bills. The analysis takes a holistic approach and take s advantage of the synergies created by the various upgraded components in reducin g energy consumption. The synergy created though the upgraded HVAC system, a tighter thermally resistant envelope with increased insulation and efficient glazing, and the use of materials with low solar absorptance has decreased the annua l cooling load is reduced by 57% translating into savings of $863. The upgrade to CFL bulbs resu lted in a 75% reduction in lighting costs with savings of $326. The AirTap add on heat pump saved 1,807 kWh annually, translating into energy savings of $162. The photovoltaic system produced 6,754 kWh annually, which reduced energy consumption and provided annual savings of $608. In summary, the green custom home design is nearly 65% more efficient than the base custom home design, saving approximately $2000 annually. Florida Green Building Coalition Home Certification In order to effectively market the hom e as being green, the home must meet the certification requirements of a green build ing assessment system. A truly green home should go beyond energy-efficiency by pr oviding enhanced occupant health and lessening the burden on the environment. The res earcher chose to certify the home per the requirements of the Flor ida Green Building Coalition, as the FGBC reference standard holds premium applicability to green homes in Florida. The researcher utilized the FGBC Reference Guide to advise the gr een strategies implemented into the home. Once the overall green st rategy was developed, the researcher filled out the Florida Green Home Standard Checklist to meet the certification requirements of the assessment system. The checklist is broken down into individual green component

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83 Figure 4-7. Energy Gauge build ing input summary for base home

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84 Figure 4-7. Continued

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85 Figure 4-7. Continued

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86 Figure 4-7. Continued

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87 Figure 4-7. Continued

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88 Figure 4-8. Annual energy summary for base home

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89 Figure 4-9. Home Energy Rater System index for base home

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90 Figure 4-10. Energy Gauge build ing input summary for green home

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91 Figure 4-10. Continued.

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92 Figure 4-10. Continued.

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93 Figure 4-10. Continued.

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94 Figure 4-10. Continued.

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95 Figure 4-11. Annual energy summary for green home

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96 Figure 4-12. Home Energy Ra ter System index for green home

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97 categories including: energy, water, lot c hoice, site, health, ma terials, disaster mitigation, and general conditions. The resear cher met all of the category minimums and achieved exceeding points for certain categor ies that resulted in a higher level of certification. For example, the low HE RS index of 43 (determined through energy modeling) worked in conjunction with other satisfied scorecard criteria resulted in an Energy category score that exc eeded the maximum of 75 points. Upon completion of the Florida Green Ho me Standard Checklist, the researcher concluded that 191 points were to be earned for the upgraded green home, earning the Bascombe residence a Platinum certification. The following figures show the completed Florida Green Home Standard Checklist to demonstrate where points were achieved that earned the Platinum certification. Figure 4-13. Florida Green Building Coalition green custom home point summary

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98 Figure 4-14. Florida Gr een Building Coalition ener gy category checklist

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99 Figure 4-15. Florida Green Building Coalition water category checklist

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100 Figure 4-16. Florida Green Building Coalition lot c hoice category checklist

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101 Figure 4-17. Florida Gr een Building Coalition si te category checklist

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102 Figure 4-18. Florida Gr een Building Coalition health category checklist

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103 Figure 4-19. Florida Gr een Building Coalition mate rials category checklist

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104 Figure 4-20. Florida Green Bu ilding Coalition disaster mi tigation category checklist

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105 Figure 4-21. Florida Gr een Building Coalition general category checklist Green Custom Home Life Cycle Analysis To adequat ely evaluate the true costs and benefits of a green home, the purchase price and monthly savings must be c onsidered in order to perform a life cycle analysis. As demonstrated above, the purch ase price of the green home commands a 4% premium or an incremental cost of $41,562 compared to the base home design. This premium is eventually paid back by future energy savings, which amounts to approximately $2,000 annually ba sed on the energy simulations. An energy efficient

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106 mortgage provides additional monthly saving s due to the homes high level of energy efficiency. Now that the green premium and monthly mortgage and energy savings have been determined, a life cycle analysis was pe rformed in order to determine the homeowners total savings, payback per iod and return on investment. In order to demonstrate the monthly cost difference between the two home designs, the monthly mortgage payments and ut ility consumptions were determined. Two monthly scenarios were performed; the first scenario utilizes the same mortgage for both homes, and the second scenario uti lizes an energy-efficient mortgage for the green home design. The energy-efficient mort gage structure utilized for this analysis is based on the myEnergyLoan program, which lo wers the loans interest rate on a performance based level of energy-efficiency. In this type of loan structure, one basis point off of the loans intere st rate is realized for each percentage point increase of energy-efficiency revealed by the HERS In dex. The base custom home had a HERS Index of 109 and the green cu stom home had a HERS Inde x of 42, representing a 61.47% increase in energy efficiency. This efficiency enhancement translates into a .6147% reduction in the loans interest rate reducing the APR from 5.75% to 5.135%. For both analyses, monthly energy consum ption was assumed from the energy simulation software, and water consumptio n was assumed based on the average cost of monthly water consumpti on in the area. Simulation software for water use was not utilized, however the efficient water fixtures installed and rainwa ter reclamation system are expected to save 50% on water costs. Table 4-10 demonstrates the monthly cost comparison of the two designs with the same mortgage, and Table 4-11 demonstrates the comparison with the green mortgage.

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107 Table 4-6. Monthly cost comparison same mortgage Base Custom Home Green Custom Home Cost Difference Mortgage Information Sales Price $1,159,387.80 $1,200,959.56 $41,571.76 LTV Ratio 80% 80% Loan Amount $927,510.24 $960,767.65 $33,257.41 Down Payment $231,877.56 $240,191.91 $8,314.35 Interest Rate 5.75% 5.75% $Loan Term (yrs) 30 30 Mortgage Payment $5,412. 70 $5,606.78 $194.08 Utility Information Energy Costs $291.75 $127.83 $(163.92) Water Costs $100.00 $50.00 $(50.00) Total Monthly Cost $5, 804.45 $5,784.61 $(19.84) Table 4-7. Monthly cost comparison green mortgage Base Custom Home Green Custom Home Cost Difference Mortgage Information Sales Price $1,159,387.80 $1, 200,959.56 $41,571.76 LTV Ratio 80% 80% Loan Amount $927,510.24 $960,767.65 $33,257.41 Down Payment $231,877.56 $240,191.91 $8,314.35 Interest Rate 5.75% 5.135% Loan Term (yrs) 30 30 Mortgage Payment $5,412.70 $5,237.36 $(175.34) Utility Information Energy Costs $291.75 $127.83 $(163.92) Water Costs $100.00 $50.00 $(50.00) Total Monthly Cost $5,804. 45 $5,415.19 $(389.26) In both scenarios, the mont hly cost comparison demonstrated monthly savings for the green home. In the firs t scenario, where the same mortgage was applied for both designs, the energy and water savings did outweigh the increased mortgage cost, but only by a slight amount. While the green desi gn is still more affordable on a monthly basis, slight savings of approximately $20 will payback the green upgrades at a slow

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108 pace. The second scenario reveals substantia l monthly savings that are realized when the energy efficient mortgage is applied. The energy efficient mortgage and utility savings amount to $382 in total monthly savings when compared to the base design and mortgage structure. Payback under the scenario will occur much sooner, as the compounding savings swiftly offset the initia l investment. The energy efficient mortgage is a significant factor when evaluating t he financial feasibility of the green home, however both scenarios demonstrate net mont hly savings for the green home compared to the base home. The monthly cost comparis on demonstrates the monthl y affordability benefits of owning a green home through mortgage, energy, and water savings. Next, the researcher performed a life cycle analysis to evaluate the green upgr ade investment to the homeowner and payback peri od. For the analysis, the researcher assumed a sevenyear time frame based on the average span of homeownership, and energy inflation would average 3% for each of these seven y ears. At the end of t he seven years, the green home will have appreciated based on t he market value of the annual energy savings. The life cycle analysis demonstrat es annual savings attributable to both mortgage payment and utility savings, and dete rmines the payback period and various returns on investment. Table 4-7 repres ents the life cycle anal ysis with the energy efficient mortgage, and Table 4-8 represents the analysis without the energy efficient mortgage. The results reveal a substantial diffe rence in the feasibil ity of the green home investment.

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109 Table 4-8. Life cycle analysis wi th Energy Efficient Mortgage Annual Incremental Cost/Savings Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Incremental Down Pa yment $(8,314.35) Mortgage Payment Savings $2,104. 08 $2,104.08 $2,104.08 $2,104.08 $2,104.08 $2,104.08 Energy Savings $1,967.00$2,026.01 $2,086.79$2,149.39$2,213.88$2,280.29 Water Savings $600.00$600.00$600.00$600.00$600.00$600.00 Total Savings $(8,314.35)$4,671.08 $4,730.09 $4,790.87 $4,853.48 $4,917.96 $4,984.38 Cumulative Savings $4,671.08 $9,401.18 $14, 192.05 $19,045.53 $23, 963.49 $28,947.87 Time of Sale Premium $31,808.41 Annual Return on Investment 56%57%58%58%59%60% Return on Investment 195% Net Present Value with Resale $40,459.84 Present Value of Savings $25,253.94 Net Present Value of Savings $16,288.06 Savings to Investment ratio 3.0 Simple Payback 1.8

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110 Table 4-9. Life cycle analysis wi thout Energy Efficient Mortgage Annual Incremental Cost/Savings Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Incremental Downpayment $(8,314.35) Mortgage Payment Savings $(2,328.97) $(2,328.97) $(2,328.97) $(2,328.97) $(2,328.97) $(2,328.97) Energy Savings $1,967.00$2,026. 01$2,086.79$2,149.39$2,213.88$2,280.29 Water Savings $600.00$600.00$600.00$600.00$600.00$600.00 Total Savings $(8,314.35) $238.03 $297.04 $357.82 $420.42 $484.90 $551.32 Cumulative Savings $238.03 $535. 06 $892.88 $1,313.30 $1,798.20 $2,349.52 Time of Sale Premium $31,808.41 Annual Return on Investment 3% 4% 4% 5% 6%7% Return on Investment (7 yr) -72.85% Return on Investment (30 yr) 120.13% Net Present Value with Resale $22,590.44 Present Value of Savings $2,015.24 NPV of Savings (7 yr) ($6,056.84) NPV of Savings (30 yr) $9,988.10 Savings to Investment ratio 0.24 Simple Payback 14.1

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111 The life cycle analysis that implements the EEM demonstrated the advantageous investment that homeowners make when ow ning a green home. Substantial annual savings averaging $4,824 provided significant annual returns on investment for each of the seven years ranging from 56% to 60%. At this high level of annual returns, the payback period is less than two years and prov ides annual savings of $4,886 for the years beyond until the time of sale. At the time of sale, the energy efficient upgrades are expected to increase the value of the home by $31,808. The time of sale premium is based on a $15 increase in value for every $1 saved in annual energy, which is formula commonly utilized to value energy improv ements. Whether or not this energy improvement appreciation is factored into this analysis, the investment reaps high returns. The seven-year return on investm ent without resale appreciation is 195%, and the ROI including the energy improvement appreciation is 487%. The Savings to Investment Ratio is favorable at 3, demons trating substantial sa vings compared to the incremental investment. Based on the model above and the assumptions therein, the green home life cycle analysis has revealed extremely favorable results and demonstrates the superior va lue of the investment. The life cycle analysis that does not implement the EEM demonstrated a disadvantageous investment for green homeowners on a seven-year basis. If the analysis is carried through until the end of the mortgage (30 year s), increasing annual energy savings provide a more favorable ROI. The payback period under this scenario is much longer at 14 years, and the SIR ra tio is unfavorable. This life cycle scenario demonstrates the importance of implementing an energy-efficient mortgage for the green home.

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112 CHAPTER 5 CONCLUSIONS, CONTRIBUTIONS, A ND RECOMMENDATIONS FOR FURTHER STUDY Conclusions The comprehensive case study of the cu stom home presented in this thesis has demonstrated that green home bu ilding is a wise business decis ion for homebuilders as well as a worthy investment for homeowners. The results and analysis of this thesis challenge the industry perception that build ing green is too expensive and that the payback period for the increm ental green investment is too long. This thesis demonstrated that the green cost premium is minima l at 4%, and the energy and mortgage savings pay back this incremental in vestment within two years. This case study demonstrated that building and owning a FGBC Platinum certified green home is a feasible and favorable investment. Green building is a wise business direct ion for homebuilders in the form of increased profit as well as achieving a com petitive advantage by building a specialized product. In this case, the contractor received a 4% increase in profit due to the increase in total cost, and the amount of work requir ed to achieve this incremental profit is minimal since only the subcontractors scope of work has changed. The homebuilders ability to market the green product at a minimal premium will boost business operations as the consumer demand for healthier, energy-efficient green homes continues to rise. Builders who are reluctant or slow to adopt green building stra tegies and principles may find themselves left behind as the green building movement continues to gain momentum. Green building is a worthy investment to homeowners in the fo rm of substantial energy savings, increased home value, as we ll as the health benefits due to enhanced

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113 indoor environmental quality. In this case study, the gr een home design incurred a 4% premium or an incremental cost of $41,562 compared to the base home design. This incremental cost is based on actual quotes fr om subcontractors who are to perform the scope of work for that particular home, and therefore this premium is an accurate assessment of the green building cost pr emium in todays marketplace. The green home design realized substantial annual en ergy savings of approximately $2,000 based on the energy simulations performed. The energy-efficient mortgage package also provided substantial annual savings, as the 61% increase in energy efficiency lowered the interest rate and provided annual savings of $2,104. The savings realized through the reduc ed energy consumption and mortgage payments resulted in average annual savings of $4,824. With annual savings of this magnitude, the cost premium associated wit h the green home is paid back in less then two years and provide savings beyond until t he time of resale. In addition to annual energy savings, the green homes energy improvements have the potential to boost the value of the home somewhere within t he range of $21,205.60 to $53,014.01, based on a $10 to $25 dollar increase in value for every $1 saved through energy efficiency. Aside from the favorable financ ial investment, the homeowners are living in a platinum certified green home that is both healthy for the environm ent and for the occupants, which further boosts the homes value to the owners and marketplace. Contributions Contributions to the research and development of green home production have been identified for homeowners, homebuilders, designers, lenders, and policy makers. The comprehensive case study provided further evidence that green home building is a wise investment by both homebuilders and homebuy ers. This thesis provided legitimate

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114 values for the green upgrade costs and benef its, government incentives, mortgage packages, and energy savings associat ed with green homes. Homebuilders and designers will benefit from this thesis through an enhanced understanding of the green building strategies and the associated costs, as well as the certification process for green homes. Homeowners will benefit fr om this thesis through an enhanced understanding of green home features and benefits, energy efficient mortgages, government incentive program s, as well as green home cost premiums and payback periods. Policy makers and lenders will benefit from this thesis th rough the realization that incentive and rebate progr ams as well as energy efficient mortgage packages are paramount when evaluating the feasib ility of building a green home. Recommendations for Further Study Recommendations for further research have been identified. The energy-efficient mortgage was a key factor in evaluatin g the financial feasibility of the green home. The energy efficient mortgage utilized in this analysis provided annual savings that outweighed the utility savings, and shor tened the payback period by nearly 80%. Without the energy-efficient mortgage package, monthly savings are reduced by 95% from $389 to $20, and the payback period grows fr om 2 years to 14 years. A variety of mortgage incentives exist in the lending mark etplace that are available to borrowers who live in green homes. These incentives in clude reductions in closing costs, lower loan interest rates, and full financing for energy efficient upgrades. The researcher recommends further analysis be performed on t he various green loan packages offered by lenders to determine their effect on the financial feasibility building a green home.

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115 LIST OF REFERENCES Air Generate. (2009). A7 AirTap Product Information." http://www.airgenerate.co m/products/airtap.htm (December 12, 2009). Center for Housing Policy. (2008). Research Reports on Home Ownership. http://www.nhc.org/housing/chp-research/ (December 03, 2009). Database of State Incentives for R enewables and Efficiency (DSIRE). (2010). "Florida Solar Energy System Incentives Program." http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Cod e=FL33Fandre=1 andee =1(January 12, 2010). Database of State Incentives for Renew ables and Efficiency (DSIRE). (2010a). "Residential Energy E fficiency Tax Credit." http://www.dsireusa.org/incentives/i ncentive.cfm?Incentive_Cod e=US43Fandre= 1ande e=1 (January 12, 2010). Eagle Roofing Products. (2009). Eagle Green Product Brochure. http://www.eagleroofing.com/ greenBld _eagleSolarRoof.htm (December 15, 2009). Energy Information Administration (E IA). (2010). Forecast and Analysis. http://www.eia.doe.gov/ oiaf/forecasting.html (January 10, 2010). Florida Green Building Coalition (FGBC) (2010). FGBC Certified Projects. http://floridagreenbuilding. org/certified-projects (January 03, 2010) Florida Green Building Coalition ( FGBC). (2008). Florida Green Home Standard Reference Guide. Version 6, Effective May 2009. http://www.floridagr eenbuilding.org/db/ (November 28, 2009) Franko, R., Gause, J. A., Kings bury, J., and Kell enberg, S. (2007). Developing Sustainable Planned Communities. Urban Land Institute, Washington, D.C. Kats, G. (2003). "The Costs and Financial B enefits of Green Buildings. A Report to Californias Sustainable Building Task Force. Kaufmann, M. (2008). Redefining Cost: A Beacon of Hope Shines through Housing Market Gloom Michelle Kaufmann Companies, 2008. Kibert, C. (1999). Guide for Green Residential Construction in Florida University of Florida. Kibert, C. (2008). Sustainable Construction: Green Building Design and Delivery. John Wiley and Sons, Inc., Hoboken, NJ.

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116 Koch, Wendy. (2009). Green homes red-hot: 17% of new builds get Energy Star seal. USA TODAY. December 3, 2009. http://www.usatoday.com/news /nation/ environment/200912-03-green-house-energy-sta r-new-homes_N.htm?csp=34 (November 14, 2009). McGraw-Hill Construction. (2008). The Green Home Builder SmartMarket Report www.construction.com/greensource /resources/smartmarket.asp (November 17, 2009). National As sociation of Home Builders (N AHB). (2010). Green Bu ilding Information. http://www.nahb.org/referenc e_list .aspx?sectionID=1195 (January 14, 2010). National Homebuilder Mainstream Gr eenHome (NHMG). (2006). Summary of Features. Cherokee Investment Partners, LLC. 2006. http://www.mainstreamgreenhome.com/m edia/Green Home_Features_Summary. pdf (December 12, 2009). Prior, A. (2009). "Green for Green." Wall Street Journal, Personal Finance. August 24, 2009. RGF. (2009). Guardian Air PHI Cell Product Description. http://www.rgf.com/product_detail. cfm?ProductID=GA-HVAC (December 12, 2009). Sekine, Cory. (2007). Green Building is Big Business. Masonry Magazine. November, 2007. http://www.howstuffworks.com/framed.htm?parent=greeninghomeincrease-property-value.htmandurl=h ttp://www.masonrymagazine.com/1107/green.html (November 11, 2009). U.S. Environmental Protec tion Agency. (2004). "Buildings and the Environment: A Statistical Summary." http://www.epa.gov/greenbuilding/pubs/about.htm (November 12, 2009). U.S. Environmental Protecti on Agency. (2010). WaterS ense Program Information: US Water use. http://www.epa.gov/watersense/wate r_efficiency/us_water_use.html (January 01, 2010). U.S. Environmental Protection Ag ency and U.S. Department of En ergy (EPA and DOE). (2010). "Features of ENERGY STAR Qualified New Homes." http://www.energystar.gov/index.c fm?c=new_homes.nh_features (January 12, 2010). U.S. Environmental Protection Agency and U.S. Department of En ergy (EPA and DOE). (2010a). "What is a HERS Rating?: ENERGY STAR. http://www.energystar.gov/index.cfm?c=bldrs_lend ers_raters.nh_HER (January 14, 2010).

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117 United States Green Building Council (USGBC). (2009). LEED for Homes Certified Projects http://www.usgbc.org/Display Pa ge.aspx?CMSPageID=147#2008 (October 25, 2009) Wilson, A., and Piepkorn, M. (2006). Green Building Products. The GreenSpec Guide to Residential Building Materials. New Society Publishers, Canada.

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118 BIOGRAPHICAL SKETCH Anthony Albanese was born in Houston, Texas in 1984. He grew up in Boca Raton, FL, where he attended Pine Crest High School and was actively involv ed athletics, academics, and music. Anthony rece ived a bright futures scholarship to the University of Florida, where he earned a bachelors degree in finance and a minor in real estate. Upon completion of his bac helors degree, Anthony remained at the University of Florida to pursue a Master of Science in Building Construction. Anthony is a Leadership in Energy and Environmental De sign Accredited Professional and intends to bring his knowledge and passion for sustainable construction to the built environment.