Sustainable Cities and Society 36 (2018) 107–115

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Sustainable Cities and Society

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What does it cost to convert a non-rated building into a green building? MARK
a,⁎ b
G.S. Vyas , K.N. Jha
a
Assistant Professor, Dept. of Civil Engineering, College of Engineering, Pune 411005, India
b
Associate Professor, Dept. of Civil Engineering, Indian Institute of Technology Delhi, Hauz Khas, New Delhi 110016, India

A R T I C L E I N F O A B S T R A C T

Keywords: The increasing demand for natural resource exploration and exploitation has generated greater attention on the
Green building impact on the environment of such actions. One solution to mitigate the negative impacts is to regulate it
Initial cost through government agencies and legal requirements thereby promoting sustainable construction. More re-
Payback period cently, a variety of environmental and green building rating tools have been developed to assist construction of
Rating systems
green buildings. It helps in making decisions that best fit the sustainable goals (i.e. social, economic, environ-
ment). This paper outlines potential benefits of Indian government green buildings. Findings of this paper show
that the average increase in the initial cost of green buildings is 3.10% for those with three stars rating and
9.37% for those that are five stars rated buildings. It is worth investing in such acts to safeguard the environ-
ment.

1. Introduction A green building comes under the umbrella of sustainable development

which inflicts minimum impact on the built environment throughout its
Today the world is facing major environmental problems in the lifecycle. The green building footprints have increased from 20,000
shape of climate change, waste accumulation, ozone layer depletion, square feet in 2004 to 3 billion square feet footprints in 2015. The
etc. (EPA, 2016). The construction sector consumes tremendous energy, current target sits at than 10 billion green building footprints by 2022
natural resources and, as a consequence, it increases pollution levels (Times of India, 2015). Incorporating green building practices into the
globally. The construction industry accounts for 10% of global gross construction of buildings is a solid financial investment. Green build-
domestic product (GDP) and has both direct and indirect impacts on ings are not only environmently friendly, but they also have various
climate change and the environment. Greenhouse gas (GHG) emissions other advantages. For example, the buildings offer greater comfort by
from the construction industry approximate 23% (Erlandsson & Borg, creating a healthier indoor climate. This in turn increases the pro-
2003; Nelms, Russell, & Lence, 2005). The different phases of a building ductivity of the workforce while also reducing incidences of ab-
life cycle emits an excessive quantity of CO2 to the atmosphere through senteeism (GRIHA, 2015). Due to the environmental crises, construc-
the production of building materials, construction of buildings, the tion patrons are demanding assurance of buildings’ long-term
renovations, and the rehabilitations at later stages, up to the final de- environmental and economic performance and costs. The problem in
molition. Researchers have concluded that the selection of low en- progressing towards sustainable construction practices is that the en-
vironmental impact construction materials has a significant saving on vironmental attributes i.e. energy saving costs, indoor environmental
CO2 generated (Gonzalez & Navarro, 2006). The building uses energy quality, etc. are invisible and appreciated only when the building is
throughout its lifecycle. The environmental, social, and economic in- occupied and is in use. The construction supply chain of builders, de-
dicators are three pillars of sustainable development, which is a glob- velopers, planners, manufacturers, design (structure, landscape, and
ally emerging sector, and a highly active industry in both developed energy) and construction teams now need to consider the extra con-
and developing countries. struction cost of a green building and the payback period for all factors.
In India, the urban population has grown at an annual growth rate The initial incremental cost of a green building strongly depends on the
of 1.15 percent between 2001 and 2011, from 27.4 per cent to 30.9 per country’s situation. In several developed countries like the United
cent (Indian Express, 2015). Due to this rapid urban expansion, the States of America (USA) and the United Kingdom (UK), renewable en-
country has experienced an increase in construction activities which ergy prices have decreased as energy–efficiency technology is well
has imposed pressures on the environment and resources. Infrastructure advanced (Alshamrani, 2017; Tatari & Kucukvar, 2011). However, in
investments play a major role in determining future resource intensity. other countries, these technologies are not locally available, so prices

⁎
Corresponding author.
E-mail addresses: [email protected] (G.S. Vyas), [email protected] (K.N. Jha).

http://dx.doi.org/10.1016/j.scs.2017.09.023
Received 26 September 2016; Received in revised form 2 September 2017; Accepted 20 September 2017
2210-6707/ © 2017 Elsevier Ltd. All rights reserved.
G.S. Vyas, K.N. Jha Sustainable Cities and Society 36 (2018) 107–115

are still high. Another factor that has a significant influence on initial ratings (Abdul, 2014).
incremental cost is government subsidies (Alexeew, Carolin, & Zia, In the USA, the United States Green Building Council (USGBC) de-
2015). Green building subsidies are common in many developing veloped an American building rating system – Leadership in Energy and
countries including India (Alexeew et al., 2015). Moreover, this study Environmental Design (LEED), in 2000. In LEED certified buildings the
has found that the incremental cost of green buildings over conven- initial incremental cost ranges from 0.84 to 5% with a payback period
tional buildings is mainly due to energy efficiency measures of 3–5 years (Syphers 2003). Similar systems were developed in other
(Alshamrani, 2017; Tatari & Kucukvar, 2011). Several conventional major countries, for example, the Comprehensive Assessment System
energy-efficiency methods such as the orientation of the building, the for Building Environmental Efficiency (CASBEE) in Japan (2004) and
position of doors and windows, open window units, proper plantation the Green Star in Australia (2006). In Germany, the German Green
of trees, use of bamboo in construction, etc., may reduce energy con- Building Council and the German government collaborated in 2009 to
sumption by 20–30% (Kneifel, 2010). However, there are few published develop a building assessment system known as Deutsche Ge-
studies concerning the development of initial cost prediction models for sellschaftfür Nachhaltiges Bauen (DGNB), which is possibly the most
green buildings, particularly in the provision of cost comparison of advanced evolution of building assessment systems.
sustainable and conventional buildings (Alshamrani, 2017; BREEAM, LEED, CASBEE, Green Star, and DGNB represent the
Tatari & Kucukvar, 2011). This is crucial not only to help determine the cutting edge of today’s high-performance green building assessment
initial incremental cost of a green building but also to consider costs methods, both defining the concept of high performance and providing
and benefits calculated over the entire life cycle (from the cradle to the a scoring system to indicate the success of the project in meeting its
grave) of a green building (Cabeza, Rincón, Vilariño, Pérez, & Castell, sustainability objectives. Almost all developed countries show a similar
2014). increase in initial cost and payback period. Literature pinpoints eco-
Darko and Chan (2016) reviewed 36 articles and found that the cost nomic benefits of sustainable buildings on four fronts:
is the second most reported barrier to green building adoption in the
literature. The higher cost of constructing green buildings has become a • Minimisation of operating cost by reduction in electricity con-
major obstacle that makes it difficult to encourage stakeholders to sumption.
adopt green buildings. Compared with conventional (non-green) • Reduction of maintenance cost by conducting complete functional
buildings, green buildings cost more to construct, and the extra cost testing of all energy using systems prior to occupancy.
includes not only the higher purchase and acquisition costs of green • Increase of building value directly correlated to energy saving.
building technologies (such as solar heating appliances and ground- • Tax benefits offered by local, state or provincial and federal gov-
source heat pumps) but also costs relating to installations that conform ernmental authorities as an incentive for the implementation of
to design specifications and higher labour costs (Geng, Dong, Xue, & Fu, green strategies.
2012). Many studies (Darko & Chan, 2016; Darko, Zhang, & Chan, 2017;
Hwang & Tan, 2012; Mulligan et al., 2014; Nahmens & Reichel, 2013; These tangible benefits by the green building industry can be
Opoku & Ahmed, 2014; Potbhare, Syal, & Korkmaz, 2009; Samari, measurable (Poveda & Young, 2015).
Ghodrati, Esmaeilifar, Olfat, & Shafiei, 2013; Shi, Zuo, & Zillante, 2012;
Zhang, Platten & Shen, 2011) have discussed that anxiety about the 1.1. Green building rating systems in India
high-cost premium of green buildings remains a prominent barrier to its
widespread adoption. It is vital, to fully appreciate that the high cost of In India, there are two main primary rating systems: the Green
a green building is a real and major barrier that prevents stakeholders Rating for Integrated Habitat Assessment (GRIHA) and the Indian Green
from adopting it. However, if real life cases are studied, the cost of Building Council (IGBC). Recently Vyas and Jha (2016) developed a
green buildings may not prove to be a barrier. Darko and Chan (2016) new green building rating system based on stakeholder’s opinions.
ranked lack of incentives and support (from government) as third GRIHA was developed by The Energy Research Institute (TERI) in 2007
among the top five green building adoption barriers identified from the and recently revised in 2015. The GRIHA considers 31 criterions; the
literature. In the US, the UK, and Canada, for example, the government LEED-India considers 51 criteria and the newly developed rating system
provides various incentives (Qian & Chan, 2010) to drive the adoption considers 34 attributes. The rating range for each rating system is as
of green building construction by stakeholders. Despite the importance shown in Fig. 1. The GRIHA is a green building assessment rating
of incentives, the progress in adopting green buildings is still lacking. system based on its predicted performance over the life cycle of the
Ries, Bilec, Mehmet Gokhan, and LaScola Needy (2006) concluded building (planning to operation). The stages of the building’s life cycle
that green buildings offer direct as well as indirect benefits. Indirect that have been identified for evaluation are pre-construction, building’s
benefits of green buildings include the increase in productivity of a design, construction, and operation and maintenance (O & M). The is-
worker by approximately 25%; decrease in absenteeism; and decrease sues addressed in these stages are as follows.
in energy usage by approximately 30% on a square foot basis.
A green building rating system measures the sustainability of a • The pre-construction stage includes intra-site and inter-site issues.
building. It provides an effective framework for evaluating the build- • The building planning and construction stage includes a reduction in
ing’s environmental performance and incorporating sustainable devel- resource demand, resource utilisation efficiency, resource con-
opment into the building and construction processes. The innovation in servation, resource recovery and reuse. It also includes the provi-
thinking of sustainable construction and the approach was first initiated sions for occupant’s health and well-being. The main resources that
in 1990 in the United Kingdom with the advent of a sustainable are considered are water, land, green cover, energy, and air.
building assessment system known as the Building Research • The building O & M stage includes O & M of building systems and
Establishment Environmental Assessment Method (BREEAM). It re- processes, occupant’s health and well-being, and monitoring and
presented the first successful effort at appraising buildings on a wide recording of consumption, and also issues that affect the global and
range of sustainable factors that included not only energy performance local environment.
but also location, materials use, environmental impacts, contribution to
ecological system health, indoor environmental quality, and water The Indian Green Building Council (IGBC) was developed by
consumption (Kibert, 2013). BREEAM rated buildings initial incre- Leadership in Energy and Environmental Design (LEED) in 2006 and
mental cost as high up to 2%, and a payback period of two to five years was later changed to the IGBC in 2015. The distribution of green at-
through savings in energy and water bills. The same research demon- tributes of GRIHA, IGBC and the newly developed rating system by
strated that there is little or no additional cost for achieving ‘pass’ Vyas and Jha (2016) is shown in Fig. 2a–c respectively. In GRIHA,

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G.S. Vyas, K.N. Jha Sustainable Cities and Society 36 (2018) 107–115

Fig. 1. Comparison of GRIHA, IGBC and newly developed green

30 building rating system. (For interpretation of the references to
Design and
25 Energy colour in this figure legend, the reader is referred to the web
Achitechture
version of this article.)
20
15 Indoor air and
Innovation
10 comfort
5 GRIHA
Performance 0 IGBC
Water
Validation

Socio-Economic
Material
Strategies
Solid waste Construction

IGBC, and the newly developed rating system, the attribute ‘energy’ has Right to Information Act (RTI Act, 2005). The Right to Information Act
the highest percentages of 20%, 28%, and 15% respectively. The IGBC 2002 (RTI) is an Act of the Parliament of India “to provide for setting
assessment tool is developed for new construction, existing buildings, out the practical regime of right to information for citizens” (RTI 2016).
commercial interiors, core and shell, homes, neighbourhood develop- RTI was filed with the Central Public Works Department (CPWD), and
ment, school, and retail. This system awards a rating of buildings as the bill of quantity/estimate of green government buildings was ob-
certified, silver, gold, and platinum. It uses a simple checklist format to tained. The CPWD is a central government of India owned authority
rate building performance. entrusted with the responsibility of executing public sector works. The
The initial incremental cost for energy efficient building is 0–2.8% CPWD publishes a standard specification book, which is very commonly
higher than that of the conventional building giving energy savings up used by architects and engineers for construction of government
to 36% with a payback period of 2–4 years (Alexeew et al., 2015). buildings. The specifications are in general common for a typical
Green buildings have tangible and intangible benefits. The tangible building type. The cost data obtained through case studies of such
benefits of the construction of green buildings are the reduction in government works can be used for descriptive, explorative, illustrative
energy and water consumption. The energy saving could range from or explanatory research (Yin, 2013). The schematic diagram of the re-
20% to 100% (net zero buildings) sometimes energy plus and water search methodology is shown in Fig. 3.
savings can achieve around 30%–50% (IGBC, 2016). The intangible
benefits are the excellent day-lighting, enhanced indoor air quality, 2.1. Initial cost of green buildings
health and well-beings of the occupants and conservation of natural
resources. However, the lifetime payback is much higher compared To calculate the initial cost of green buildings, cost data were ob-
with non-rated buildings, which mainly accumulate from reduced tained as explained above. The next step was to identify green building
carbon emission, operational cost savings, and potentially higher rental items and to compare them with the cost of a non-rated building. In this
or capital values. The intangible benefits such as social advantages are way additional costs can be determined (see Eqs. (1) and (2)).
due to the positive impact of sustainable buildings in the neighbour-
hood environment (Lang & Meghraj, 2008). Actual costs of green Cost of a Green Building (GB) attribute = Cost of GB attribute from
building practice are not always as high as predicted (Alshamrani, BOQ − Cost of non-rated attribute (1)
2017; Vyas & Jha, 2016). In many cases, initial costs of executing green Initial Green Building cost = Increase in cost of project × 100/total
design can be lower than conventional practice, such as integrating cost (2)
natural cooling through shading, ventilation in place of an air con-
ditioning system and eliminating the need for an irrigation scheme by
planting native landscape (Lee, Syphers, Rasmussen, & Scott, 2000). 2.2. Payback period
Most of the literature are available on green building rating systems, its
implications, and analysis but there is limited research on the initial Payback analysis determines the required minimum duration of the
cost (Alshamrani, 2017), the payback period, and life cycle cost (Cabeza project to recover the initial investment. The no return method is a
et al., 2014) of green buildings by considering all rating systems for simple payback period method in which interest ‘i’ is taken as ‘zero’
different certification levels. (i = 0). To calculate the payback period, the initial cost of the green
building, the operation and maintenance cost (O & M), and savings in
1.1.1. Objectives of the study energy cost and savings in O & M cost are considered.
The objectives of this study are: to determine the initial cost of a Eq. (3) can be used to determine net cash flow (NCF).
green building having different certification levels for Indian con-
NCF = cashinflow − cashoutflow (3)
struction including the payback period for the green buildings for dif-
ferent levels of certification. This economic analysis will encourage For calculating payback period for i = 0, annual uniform NCF series
construction clients to move towards sustainable construction. pattern is considered and with the help of Eqs. (3) and (4), payback
period ‘np’ in years is obtained.
2. Research method
np = P / NCF (4)

To achieve the above-stated objectives, a detailed survey was car- where P is Present Worth.
ried out by visiting private green building sites for cost data, but such It is important to note that the payback analysis neglects all cash
costs were not made available to the researchers citing confidentiality. flows after the payback period of np years and the time value of money
Thus, it was determined that focusing on the green government build- is not considered in the analysis (Blank & Tarquin, 2012).
ings would be more beneficial as cost data could be obtained from the To consider the time value of money, the discounted payback period

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G.S. Vyas, K.N. Jha Sustainable Cities and Society 36 (2018) 107–115

Fig. 2. (a) GRIHA rating system. (b) IGBC rating

system. (c) Newly developed rating system (Vyas,
Jha, & Patel, 2016).

is calculated. For calculating discounted cash inflow Eq. (5) is used. Indian standard (IS) defines the life cycle costing as “A comparative
assessment of competing design alternatives based on their respective
NCF (P / A, 12%, np) − P = 0 (5)
life cycle costs over their economic life. LCC covers all the costs from
Where (P/A, 12%, np) is the uniform series present worth factor and project conception to final scrapping and disposal and includes all costs
n
calculated as (1 + i) −n 1 (Blank & Tarquin, 2012). of operation, repairs, maintenance, energy consumption, rentals, in-
i (1 + i)
surance, etc., in addition to the initial costs of development and/or
acquisition, all discounted to the same point in time” (IS 13174 Part I).
2.3. Life cycle costing (LCC)
Part II of IS 13174 equates the net present value (NPV) with the LCC.
For calculation of LCC Eq. (1) is applied.
Life cycle costing is also known as cradle to grave costing. The

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G.S. Vyas, K.N. Jha Sustainable Cities and Society 36 (2018) 107–115

Fig. 3. Research Methodology.

The steps applied on the real case study projects are explained in the 3.2. Data analysis
next section.
3.2.1. Calculation of initial cost of green building
To calculate the initial costs of constructing a green building, the
3. Data collection and analysis actual rate of construction of each green building attribute is taken from
estimation/BOQ sent by CPWD obtained through RTI. The green
3.1. Data collection building items are identified from specifications/tender documents of
the considered case studies. The rates for the conventional building
As mentioned above, the Right to Information Act (RTI) was filed (also referred to as non-green buildings) are taken from the Delhi
online to obtain data from the Ministry of New and Renewable Energy Schedule of Rates (DSR) for the year 2014–15. Non-green buildings are
(MNRE) and Central Public Works Department (CPWD) for green gov- those buildings which are traditionally constructed without green
ernment buildings. Among 54 RTIs for green building sites, cost data in buildings features. The costs of all non-scheduled items are taken as a
the form of bill of quantity (BOQ) or estimate is obtained for 22 green market rate. Both the costs of construction of green buildings and the
buildings as other sites are either under construction or green certifi- cost taken over the entire life cycle of the buildings were assessed.
cation is awaited for these sites. Out of the 22 data sets, the data Table 2 gives a detailed explanation of eleven green building pro-
available for eleven green building sites were either insufficient or the jects.
green building rating was not received. So, in this study eleven build- For illustration, the cost calculation of the C1 building is illustrated.
ings certified under IGBC, GRIHA or both rating systems were analysed. This project has a five stars rating from GRIHA and a platinum rating
These buildings fall under different climatic regions, specified by the from IGBC with a site area of 7547 sqm. The built up area of the project
National Building Code (NBC, 2005) of India. is 7912 sqm. The air-conditioned area is approximately 3137 sqm. Its
The eleven buildings were coded as C1, C2, ……., C11. Amongst the energy performance index (EPI) is 8.76 kWh/sqm/year. Renewable
eleven buildings, C1 and C2 were from hot and dry climates, C3, C5, C6, Energy is 30 kW solar photovoltaic (PV) and 10 kW Building Integrated
C7, C8, C9, C10 and C11 were from warm and humid climates, and Photovoltaic (BIPV). As per GRIHA, the reduction in energy consump-
building C4 was from a composite climate. Building C1 is the training tion is 93.74% and reduction in water consumption is 77.58%. The
institute of the civil engineers of the Indian railways located in a hot building is a training institute located in a hot and dry climatic zone.
and dry climatic zone of India. It consists of classrooms, accommoda- The total cost of the project is $990,763.80 listed under the BOQ
tion of faculty and trainee officers. For this project, the site area is 7547 summary sheet. The cost of the scheduled item is $935,744.93.
sqm and the built up area is 7912 sqm. Likewise, the buildings C2 to Likewise, the non-scheduled item is valued to be $53,051.96. For the
C11 are educational institutes having different climatic zones as de- non-scheduled items, researchers used the rate quoted by the contractor
scribed in Table 1. The buildings studied in this research are existing in a competitive bidding scenario. From BOQ, those items, which
government green buildings in India having three and five stars rating. contribute towards green points were segregated. In this project, there
Table 1 lists the green building measures used in the eleven case was a total of 25 green building attributes. Costing for these green at-
study projects that were added to the initial construction cost. For tributes were carried out separately following the methods of costing
buildings in hot and dry climates some of the green building measures both the scheduled and non-scheduled items as previously explained. In
taken up were: use of AAC blocks, roof insulation, reflective glass this way the cost of green building attributes was determined. The cost
(6 mm thickness), solar/PV panel, solar hot water system, low Voltaic of green building attribute is compared with non-rated (NR) building
Organic Compounds (VOC) paints, water efficient plumbing, rainwater items for this case, and the total cost of NR building is $988,796.83
harvesting, and energy saving light fittings. All the buildings were de- with an increase in initial cost found to be $162,033.73 by applying Eq.
signed as per solar passive architecture. Solar-passive buildings are (1). The percentage increase in the initial cost was determined using Eq.
designed and constructed to achieve thermal and visual comfort by (2) and was found to be 16.35%. In the same manner, the initial in-
using natural energy sources. In the considered case studies, these vary crease in cost was calculated, and the results are shown in Table 2.
as per climatic zones. For example in the buildings falling under hot and It is observed from Table 2 that the percentage increase in cost for
dry climatic zones, evaporative cooling is considered, and in warm and five stars GRIHA rated buildings is between 6.43% to 16.35%. For the
humid climates, orientation (EW), shading by trees and by fixed/mo- C1 green building the increase in initial cost is 16.35% due to green
vable louvers are considerd. attributes such as the re-plantation of trees from the old site to the new
In this study, NR defines the buildings, which are non-rated for building site, a high Solar Reflective Index (SRI) paints and wall
green construction from IGBC/GRIHA. In India, as per MNRE notifica- treatment, sensors in water taps and waterless urinals, etc.
tion, every central government building should have a minimum The project manager of C1 suggested that to bring down the in-
GRIHA three stars rating. crease in initial cost for this green building, cost effective measures can
be taken out such as: (1) instead of SRI paints on the roof, the planner
can use the natural shading of trees, roof garden, and BIPV panels, (2)

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G.S. Vyas, K.N. Jha Sustainable Cities and Society 36 (2018) 107–115

Table 1
Green building measures.

Buildings C1, C2, and C12 (Hot and dry) 1. Use of autoclaved aerated concrete (AAC) block instead of brick masonry
2. Roof insulation and reflective paints on the roof
3. Use of 6 mm reflective glass
4. Provision of solar hot water systems
5. Low VOC paints
6. Solar panel/photovoltaic (PV) panels
7. Water efficient fittings
8. Rain water harvesting
9. Energy saving light fittings
Buildings C3, C5, C6, C7, C8, C9, C10, and C11 (warm and humid climate) 1. Use of autoclaved aerated concrete (AAC)/fly ash block instead of brick masonry
2. Roof insulation and reflective paints on the roof
3. Green roof and wall treatment
4. Use of 6 mm reflective glass
5. Provision of solar hot water systems, Solar panel/photovoltaic panels
6. Low VOC paints
7. Water efficient fittings, sensor, waterless urinals
8. Rain water harvesting
9. Liquid crystal display (LCD) light fittings
10. Bureau of energy efficiency (BEE) certified appliances
Building C4 (composite climate) 1. Use of fly ash block instead of brick masonry
2. Roof insulation and reflective paints on the roof
3. Green roof and wall treatment
4. Use of 6 mm reflective glass
5. Provision of solar hot water systems, Solar panel/photovoltaic panels
6. Low VOC paints
7. Water efficient fittings, Rainwater harvesting
8. Compact fluorescent lamp (CFL)/LED hybrid light fittings
9. Automatic light sensors

use of low flow fixtures can be installed as compared to sensors in water Table 3
taps as its initial as well as O & M cost is less. (3) Waterless urinals can Different types of costs.
be installed with proper guidelines given to users. For three stars the
Cost Green building/conventional building
GRIHA rated buildings increase in initial cost is 1.63–4.82%. This
proves that going towards sustainability will not cost much initially. Construction costs CPWD DAR14-15 rates, market rates of components such as
After calculating the initial cost of a green building, it was im- solar panels, rainwater harvesting, water efficient fittings,
portant to determine the payback period, discounted payback period, LCD, LED fittings, solar water heater.
Energy costs Average tariff rates for the domestic sector.
and LCC. To calculate the payback period, different types of costs such O & M cost Assumed to be 2% of the capital costs per year (based on
as construction costs, energy costs, and O & M costs were considered. In discussion with green building experts from the field.)
the first step, the construction cost was taken as an increase in the cost
of a green building attribute as compared to respective non-rated
building attributes. Energy costs, in particular the installing of a solar (SPV4ALL) version 1.0.1. The solar data available from the Indian green
panel, BIPV were directly taken from the BOQ of a particular project. building sites were entered in the software. After selecting an area, city,
For considering O & M costs, discussions with green building experts solar power capacity, and solar rooftop area, the software gives tilt
were held, and experts suggested that it can be assumed to be 2% for angle, cost savings, and annual CO2 savings (tons). The results obtained
the first two years and 5% for the next 3 years (that is for 3rd to 5th are listed in Table 4. For the C1 building, the solar power installed is
year). A summary of the data of the four categories is shown in Table 3. 30 kW Photovoltaic (PV) and 10 kW Building Integrated Photovoltaic
(BIPV) having a solar rooftop area of 280 sqm. According to the soft-
ware, when tilt angle for the project C1 is 18.500; potential cost saving
3.2.2. Estimation of energy saving for analysis is nearly $4,894.64.
For the energy analysis of the building, the amount of energy saved The results of the assessment of the initial increase in construction
through energy conservation methods during the life cycle of the costs of the three stars and five stars projects are as shown in Table 4. As
building is estimated by GRIHA application software Solar PV for ALL MNRE mandates minimum three stars rating, results of certified/one

Table 2
Cost of green building.

Building No. Total cost of project Cost of green building Cost of non-rated Increase in cost of Increase in initial Rating Type of building
($) attributes ($) construction ($) green building ($) cost (%)

C1 990,763.80 175,757.76 13,724.03 162,033.73 16.35 GRIHA 5 stars and Training institute
C2 50,013,423.07 35,30,756.97 3,498,578.35 32,178.62 6.43 IGBC Platinum Educational
C3 386,291.13 330,030.52 303,492.33 26,538.20 6.87 Rest house
C4 2,734,764.57 707,738.11 493,879.52 213,858.59 7.82 Commercial
C5 3,145,538.29 109,445.59 63,815.39 51,070.50 1.63 GRIHA 3 stars Educational
C6 2,926,013.28 170,478.53 98,374.20 72,104.33 2.25 Sports complex
C7 2,411,330.15 95,347.72 7,845.68 87,502.02 3.63 Educational
C8 3,753,341.46 254,212.34 159,952.04 94,260.30 2.51 Educational
C9 7,477,613.34 1,835,973.97 1,475,488.95 360,485.01 4.82 Educational
C10 1,972,284.86 481,879.63 421,116.03 60,763.60 3.08 Educational
C11 7,028,567.64 1,591,201.82 1,325,737.41 265,464.41 3.78 Educational

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G.S. Vyas, K.N. Jha Sustainable Cities and Society 36 (2018) 107–115

Table 4
Potential cost saving due to solar energy.

Building No. Type of Solar power Solar roof Tilt angle Potential annual o/ Total incoming Potential cost saving Annual CO2 Potential system
structure capacity (kW) top Area p (kWh/year) solar radiation due to solar power ($) saving (tons) cost ($)
(sqm) (kWh/m2/day)

C1 IB 40 280 18.50 57,722.22 6.01 4,896.24 282.55 49,352.25

C2 IB 105 735 10.76 149,926.00 5.95 12,717.35 733.89 129,549.66
C3 CB 930 6510 28.56 1206,773.00 5.41 1,116,692.94 6444.17 1,147,439.85
C4 IB 22 154 18.50 31,513.00 5.97 2,673.07 154.26 27,143.74
C5 IB 20 140 12.90 28,455.95 5.93 2,413.75 139.29 24,676.13
C6 IB 21 145 12.90 30,155.95 5.93
C7 IB 25 175 12.90 35,569.94 5.93 3,017.19 174.11 21,591.61
C8 IB 30 210 12.90 42,683.93 5.93 2,078.37 208.94 18,198.64
C9 IB 15 120 10.80 25,610.36 5.93 1,834.75 159.30 15,576.80
C10 IB 18 150 10.80 30,160.00 5.93 1,989.51 175.40 16,824.95
C11 IB 18 150 10.80 30,160.00 5.93 1,989.51 175.40 16,824.95

star is omitted. should ideally be equal. However, in a real world scenario, they are
For calculating saving in energy cost, the green building subsidy hardly equal, more so in the case of a developing country like India.
(30% in India) for the project is considered., and the electricity rate for Considering that the discount rate should not be less than the rate of
institutional buildings (IB) and commercial buildings (CB) is 8 cents/ interest at which the government is borrowing the capital from the
unit, and 9 cents/unit (1 unit = 1kWh) respectively considered from market, a discount rate of 12% has been considered here for the ana-
the Maharashtra State Electricity Board (MSEB) bill. Thus, by multi- lysis which is also in line with the recommendation of the Planning
plying the saving in electricity units by its respective rates, the energy Commission of India (IRC-SP-30, 1993). Results for other buildings
saving was calculated and shown in column 4 of Table 5. using similar procedures are tabulated in Table 5.
As considered buildings are Indian government buildings, saving in
premium charges, interest rate concession for green building in some
3.2.3. The payback period areas is not considered. In India, water charges are not too high, so
The payback period of a green building is used to determine the saving in water charges is considered as zero. Nevertheless, the payback
amount of time, expressed in years, required to recover the first cost of period for three stars rated building is 4–8 years and for five stars rated
green buildings. For building C1, the increase in the cost of the green building is 5–9 years.
building is $162,033.72. Its net cash flow and the payback period are Green buildings are environmentally friendly i.e. they save on an-
calculated from Eqs. 3 and 4 as nual emission of CO2. The SPV4ALL software is used to assess the life-
cycle energy and material flow from construction and operation of the
NCF = $5,4859.78 − $3,515.16 = $51,344.62
building and estimates its carbon footprint. The life-cycle carbon
Payback period = 162,033.73/51,344.62 = 3.16 years. emissions saving are shown in column 9 of Table 4. From the table, it is
clear that annual CO2 savings due to the construction of the green
Similarly, the payback period for other buildings are calculated and building varies from 139.29 tons to 6444.17 tons depending upon the
summarised in Table 5. solar power capacity of the building.
For calculating the discounted payback period, discounted cash in-
flow and cash outflow is calculated using Eq. (5). Using the same pro-
3.2.4. Life cycle cost
cedure, the discounted payback period, computed at an interest rate of
For calculating LCC, a cash flow diagram (CFD) of building C1 is
12% for C1 is 4.20 years. The term discount rate here indicates the rate
drawn as shown in Fig. 4.
of interest at which payments to be received in future are reduced to a
In Fig. 4, the initial increase in cost of a green building (P) is
common time. It is crucial to choose an appropriate discount rate for
$162,033.72. Annual incomings (A1) and outgoings (A2) are
the life cycle analysis. However, it is not a simple task as it depends on a
$59,756.00 and $52,867.41 respectively. It is converted to NPV by
number of complex factors and is also dependent on the future avail-
multiplying it by the uniform series present worth factor 7.4694
ability of finance and the opportunities for its use. For the computation
(i=12%, n = 20years).
of discount rate, the two important terms that need to be considered are
the ‘social time preference rate of interest’ and the ‘social opportunity Annual incomings = Savings due to saving in O & M and energy +
cost rate of interest.' These two interest rates in a competitive economy potential cost saving due to solar power = $54,859.78 + $4,896.24 =

Table 5
Payback period analysis.

Building No. Increase in cost of O & M cost ($) Saving in Energy Saving in O & M Saving due to saving in NCF ($) Payback Discounted Payback
green building ($) (annual) cost ($) cost ($) O & M and energy ($) period (Yr) period (Yr) i=12%

C1 162,033.72 3,515.16 42,390.90 12,468.88 54,859.78 51,344.62 3.16 4.20

C2 32,178.62 Data not available
C3 26,538.20 6,600.61 3,711.24 7,826.48 11,537.72 4,937.11 5.38 9.14
C4 213,858.59 14,154.76 18,095.65 105,004.35 123,100.00 10,8945.24 1.96 2.37
C5 51,070.50 2,188.91 2,413.75 29,433.82 31,847.57 29,658.66 1.72 2.04
C6 72,104.33 3,409.57 10,586.18 29,435.21 40,021.39 35,069.56 2.06 2.50
C7 87,502.02 1,906.95 50,827.19 27,891.46 78,718.64 76,811.69 1.14 1.30
C8 94,260.302 5,084.25 36,008.05 29,433.71 65,441.76 60,357.52 1.56 1.83
C9 360,485.01 46,672.09 116,680.22 74,143.77 190,823.99 144,151.90 2.50 3.15
C10 60,763.59 10,749.06 19,161.36 10,892.21 30,053.57 19,304.51 3.15 4.19
C11 265,464.41 11,361.81 52,706.66 14,026.67 66,733.33 55,371.51 4.79 7.56

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G.S. Vyas, K.N. Jha Sustainable Cities and Society 36 (2018) 107–115

initiative has been started in India. Some government agencies like

Pune Municipal Corporation, Pimpri Chinchwad Municipal
+ Corporation, Meghalaya, Haryana (2016), etc. have started providing
1 2 3 20 discounts in premium charges because of the increasing green footprint
- in this area. The Ministry of New and Renewable Energy (MNRE)
A2=$52,867.41 mandates all government buildings be at minimum GRIHA three stars
rated. This is one big step towards sustainable Indian construction.
Even though the analysis in this paper is based on data collected
from the Indian construction industry, the methodology would suggest
a much broader geographical applicability. It can be applied inter-
nationally to the identify the increase in initial costs of green buildings
Fig. 4. Cash flow diagram for calculating LCC for building C1 (all costs are in $). for sustainable construction.
The limitation of the current study is that it was performed only a
Table 6 limited number of Indian government green building projects. A similar
LCC for green buildings. study can be applied to green buildings in public and private green
building projects.
Building No. NPV ($)

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