The importance of incentives and grants for green buildings

Abstract

The aim of this manuscript is to reconsider the building lifecycle cost of Leadership in Energy and Environmental Design (LEED) buildings certified within the higher education sector. It adds to the work put forth in a previous study published by the author and focuses on the importance of incentives and grants as this type of building cost reduction can be extremely beneficial. In the previously published manuscript, the cost of green was examined from a full building lifecycle, but without the inclusion of incentives/grants. In this manuscript, 15 institutions of higher education (IHEs) were surveyed with the findings focused on the upfront green premium after incentives/grants and down the line energy savings. The net present value (NPV), internal rate of return (IRR) and discounted payback period were calculated to determine the financial feasibility of LEED certified buildings within the higher education sector after incentives/grants. These findings were then compared to the above-mentioned prior study which did not take into account upfront incentives and grants. The findings of this study indicate that incentives and grants are instrumental in decreasing upfront green premiums and increasing the financial feasibility for the full building lifecycle.