A chief criticism of green building is its up-front costs. But over time, building green—or retrofitting existing buildings to be green—reduces operating costs, sometimes dramatically. Green buildings consume an average of 25 percent less energy and 11 percent less water than others, in addition to emitting 34 percent less greenhouse gases. As a result, they save 19 percent in maintenance costs, the U.S. Green Building Council says. Over time, energy savings accumulate—and so do the dollars in your wallet. According to a Department of Energy official,3 Energy Star-rated commercial buildings typically use 10 to 40 percent less energy than unrated buildings. Because of this, payback on green building projects can happen in as little as two to five years, and owners often can sell the property at a 6 to 10 percent premium.
If you can’t implement a large-scale program, even making a small change in energy efficiency can go a long way. An analysis4 of 30,000 commercial buildings in New York found that changing the temperature by just one degree could collectively save $145 million, or about 2 percent of the energy across all the buildings. Replacing old, inefficient windows could save $227 million, or about 4.5 percent of total energy costs.
Most commercial building owners borrow money to make energy-saving adjustments, and as we all know, borrowing isn’t easy with today’s tighter standards.
But green projects have an advantage—studies show5 that loans for LEED-certified buildings have lower default rates, making them more attractive to lenders. Fannie Mae now lowers interest rates by 10 basis points for people who build sustainable multifamily apartments.