The Costs of Green Home Building

The net cost of owning a green home is comparable to that of owning a conventional home – sometimes even less.

On average, green homes can add 2.42% additional upfront costs as compared to conventional homes, according to "Costs and Benefits of Green Affordable Housing Study 2005," New Ecology and the Tellus Institute.

If there are any increased upfront costs, those costs will quickly be recouped and homeowners will be saving money for the rest of the home’s lifespan.

Lower utility costs

The average U.S. family spends nearly $1,500 on home energy bills per year. Green home features can lower energy bills dramatically, with case studies regularly showing energy reductions of at least 30% and some as high has 60% or more. Those homes also used 20 to 50% less water. Decreased operating expenditures alone more than pay for the incremental initial investment in greening a home.

Little changes like replacing the five most frequently used light bulbs in a home with compact fluorescent light bulbs (CFLs), or plugging air leaks around windows, doors, and other wall penetrations can reduce energy bills by $100 or more per year.

Programming a thermostat, using ENERGY STAR®-rated products, reducing indoor and outdoor water use and exploring solar power options are a few of the many strategies homeowners and builders can use to save money on utility costs. To find other ways to green an existing home, and to explore their costs relative to their benefits, see 45 Ways to Green the Not-So-New House.

Lower health-care costs

Airborne pollutants are 2-5 times higher indoors than outdoors. Green homes have reduced exposure to mold, mildew and other indoor toxins, reducing health-care costs.

Higher resale value

It’s predicted that green homes will be on the market for less time and possibly have a higher resale value, according to the 2007 McGraw-Hill SmartMarket Report on Attitudes & Preferences for Remodeling and Buying Green Homes.

The use of more-durable materials and equipment results in reduced replacement costs and provide additional life-cycle financial benefits.

Lower financing and insurance costs

Owning a green home makes owners eligible for home financing options with some lenders and can reduce home insurance premiums.

Ways to reduce costs

• Focus on assembling an experienced green team when building the home.
• Employ an integrated design approach when determining what green measures to incorporate.
• Utilize life-cycle costing in evaluating the economics of a project.