Does it pay-off to build green?

Future for energy efficient residential buildings: a study of

developers on the housing market in Sweden

ERES 2010

KTH Architecture and Built Environment

Agnieszka Zalejska- Jonssonagnes.jonsson@abe.kth.se

Energy consumption in buildings

020406080

100120140160180200

Comparison of energy consumption in buildings, Sweden south

Building's operating electricity Hot water Heating

30

40 50 5570

110

156

185

Construction of dwellings in Sweden

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Number of completed dwellings in Sweden 1991-2009

One or two dwelling buildning

multi-dwellings buildings

passive house

Source: Statistics Sweden (SBC) and passivhuscentrum.se

Passive and low energy houses in Sweden

Source: passivhuscentrum.se

The study

Housing developers (clients) view on investment cost, energy efficiency, profitability and future development of green residential buildings

Survey sent in February and March 2010

Respondents

Survey distributed to: 99 persons 36 housing companies

Addressed to:Project leaders, executives, environment and development chief advisors

Responded: 34 persons (37%)

17 private 17 public

24 companies (67%)

What have we asked about?

Environmental goals

Experience in building energy efficient multi-family buildings

Cost and benefits of energy efficient measures

Future plans and view on green construction

energy demand environmental friendly material

energy source CO2 emissions other

100%

81%

53%47%

16%

Company environmental goals for residential buildings construction

Environmental goals

very good insulation and airtight building's envelope

very low energy demand

renewable energy source

minimum CO2 emission

environmental friendly material

lite or no demand for heating system

other

0% 10% 20% 30% 40% 50% 60% 70%

Importance of individual aspects of green buildings

absolutely conclusive very important but not conclusive important but not significant

Environmental goals

Total investment costTotal investment cost for green buildings in comparison with traditional residential buildings• 20% - Difference insignificant• 30% - Higher cost , less 5%• 40% - Higher cost , between 5%-10%

administration and fees

design construction material

installations labour0%

10%20%30%40%50%60%70%80%

Difference between cost types in green residential buildings in comparison to traditional residential buildings

higher cost (about 10%) no or insignificant cost difference lower cost (about 10%)

Labour

9%

42%

48%

"Risk for mistakes in construction process is higher in green build-

ings"

fully agree partly agree disagree

Labour expenses are 10% higher for green buildings

There is need for higher quality works in green buildings (75%)

Need for higher accuracy and knowledge

36%

55%

9%

"Green projects demand generally higher quality of

material and products"

fully agree partly agree disagree

• Material costs 10% more in green building construction than in traditional project

• Most expensive components: • Insulation• windows • ventilation

• Most profitable energy measures:

• good insulation• mechanical heat recovery system• air tight building

Material

Operation and Maintenance

15%

45%

24%

15%

"We estimate that green buildings require less

maitenance in the future"

fully agree partly agree disagreedon't know

Operation cost are expected to decrease at least 20%

Reaching designed energy efficiency may require certain amount of technical adjustments

Green buildings may be greater challenge for property management companies

up till 60 kWh/m2 60-50kWh/m2 50-40kWh/m2 40 kWh/m2 there is no limit0%

5%

10%

15%

20%

25%

30%

35%

Level of energy demand (exclusive domestic electricity) where energy saving measures are profitable

Energy efficiency and Profitability

Future plans

low energy house (under 70 kWh/m2)

low energy house (under 55 kWh/m2)

passive house zero energy house

plus house other0%

10%

20%

30%

40%

50%

60%

70%

Types of green building project residential developers are considering to build

Future plans• 90% respondents absolutely is going to build green in the future,

remain 10% consider green plans

• Only 10% thinks that industry is ready to deliver green buildings (with quality and accuracy that is needed)

• Almost 85% practitioners plan to build green residential buildings because it is a good business opportunity

• 60% plan to build green because it is strengthening company position

• Only 40% base plans to build green buildings on requirement from regional construction municipalities

Growth of green construction

price decrease of environmental friendly materials and products

development of construction technologies and building concepts

industrialization of construction process

standarization of construction components

0% 10% 20% 30% 40% 50% 60%

Factors potentially affecting development growth of green building construction

absolutely conclusive

very important but not con-clusive

important but not significant

not significant

1. Technology development2. Knowledge3. Scale of production

Growth of green construction

financial stimulants (eg. tax reduction or subsidiaries)

substantial increase of energy prices

strenghten constraction standards

obligatory environmental assessment & certificat

0% 10% 20% 30% 40% 50% 60%

Factors potentially affecting development growth of green building construction

absolutely conclusive

very impor-tant but not conclusive

important but not significant

not signif -icant

1. Financial incitements for practitioners 2. No need for obligatory certification

Summary

Green residential buildings more are expensive than traditional - approx. 6%

Critical components: Insulation Airtight building’s envelope Mechanical heat recovery system

Building green is a good business

What the tenants think?