Building Green Pays

The authors identified green buildings as those certified under the LEED Rating System.

In an attempt to rate the value of green building, the authors calculated the net present value (NPV) of the green features, or the present value, in today’s dollars, of the measures’ future financial benefits minus the initial investment in them. Any NPV above zero, then, represents a wise investment. The authors conservatively assumed a discount rate of 5% plus inflation, an inflation rate of 2% per year, and a 20-year life for the building envelope and equipment. Within these parameters, the authors determined that the green features of Certified and Silver LEED buildings have an NPV of $48.87/ft2 ($526/m2), while those of Gold and Platinum buildings come in at $67.31/ft2 ($725/m2).