ROI: Reducing operational costs

urban building with solar and green roof

Operational expenses are the out-of-pocket costs for maintaining and running a space, including cleaning, utilities, fixed costs, parking, roads and grounds, repair and maintenance, and real estate taxes. These costs add up fast. Operational costs typically account for 6% to 15% of a company’s total business expenses, creating a huge incentive for owners, tenants, and society to drive down costs via high-performance design and other strategies (Attema 2018).

Breakdown of various operational costs for private sector offices; 2018 BOMA data (BOMA website).

Early goal setting and integrating passive, climate-responsive design are key to delivering high-performance features that significantly reduce utility costs. Savvy owners and tenants can position these savings into avoided expenses that can be redirected into other projects and upgrades over the lifetime of the project (Burpee 2009).

Literature review completed by University of Washington’s Integrated Design Lab for AIA in 2020.

Goal setting

Realizing energy cost savings begins early in the design phase when building owners, architects, engineers, and consultants set energy goals and work collaboratively to integrate building systems (Bhavsar 2020). Resources like the AIA’s 2030 Commitment and Framework for Design Excellence can help stakeholders establish clear goals that can be parlayed into measurable savings.

Key goal-setting talking points:

  • Assessing sustainability through an established framework can be an effective exercise during goal setting and can reduce energy consumption (Raof 2018).
  • High-performance design features can significantly reduce utility costs through energy and water efficiency. For new construction, they can reduce operational costs by an average of 14% over five years and by 13% over five years for green retrofits and renovations (Dodge 2018).

Image credits

urban building with solar and green roof