Getting Leadership in Energy and Environmental Design (LEED) certified unlocks lower operating costs and higher revenues.
TL;DR
-
Buildings with LEED certification use 25 percent less energy and see 19 percent lower maintenance costs than conventional buildings.
-
Insurance discounts and energy audit exemptions for LEED buildings save thousands of dollars each year.
-
LEED buildings command higher rents, improve tenancy rates, and bolster employee satisfaction.
2022 was a record year for sustainable buildings. Over 100,000 projects across 180 countries are now LEED certified.
This is a promising trend, but with over 5.9 million commercial office spaces in the U.S. alone, there’s still much work to do.
And the benefits more than justify the work it takes to get it done.
Improving building energy efficiency is an important part of tackling climate change and reducing energy bills. Sustainable buildings provide a wide range of benefits, but ensuring those benefits are certified helps even more.
Certifying a building’s green credentials protects it from greenwashing, and makes facilities more attractive to investors, employees, and tenants.
LEED certification is the leading global energy efficiency benchmark. The LEED program encompasses almost 13 billion square feet of commercial and institutional space globally. Over 1.7 million square feet becomes LEED-certified each day.
What do the Empire State Building, Willis Tower, and Facebook Headquarters all have in common? They’re all LEED certified.
Ensuring buildings meet sustainability standards will make a big difference in the fight against climate change, as buildings account for almost 30 percent of global greenhouse gas (GHG) emissions.
1. Lower energy bills and upkeep costs
Lower energy usage and costs are the most well-known benefits of LEED certification. On average, LEED buildings use 25 percent less energy, and have 19 percent lower maintenance costs than non-certified facilities. A good example of how retrofit solutions unlock these dual savings (less energy and less maintenance) are LED lighting systems.
LEDs use 75 percent less energy, and have far longer lifespans than traditional lights. For example, since installing LED systems, the University of California-Davis has saved $120,000 on electricity and over $29,000 on maintenance each year.
Less upkeep is an often overlooked benefit of LEED certification. Lower maintenance costs from LEED retrofits typically decrease operating expenses by almost 10 percent in the first year alone.
The savings that LEED certification provides quickly pays for the requisite energy efficiency solutions themselves.
“Many people think LEED is extravagantly expensive, [but] it’s actually only modestly more expensive and you get the money back faster than people think,” explains Craig Ryan, Director of Corporate Social Responsibility at Business Development Canada.
Specifically, acquiring basic LEED certification for a new project typically costs just two percent more than not doing so, according to the Journal of Sustainable Real Estate. And forgoing sustainability only leads to a growing mountain of missed savings once construction is complete.
2. LEED properties enjoy discounts and exemptions
A little known benefit of LEED-certified commercial buildings is that they secure lower insurance rates. Insurers view the attention paid to building energy performance as indicative of high operating standards, and that reduces the risk of insurance claims.
Some insurers offer 5 percent (or higher) discounts for LEED buildings. A 5 percent discount amounts to $0.02 per square foot worth of savings. For example, a 100,000 square foot building would receive $2,000 in annual insurance savings.
These reduced premiums in turn cover 66 percent of the LEED certification fee building owners have to pay ($0.03 per square foot) for existing buildings, or 45 percent of the fee for new builds ($0.045 per square foot). After five years, insurance discounts alone recoup 3–4 times the certification fee, depending on building age.
As an added benefit, LEED-certified buildings are exempt from regular energy audits that are required by some municipalities (e.g., New York City, Austin, Columbus) and states (e.g., New Jersey, California, Washington).
For example, filing fees alone for an audit in New York City range between $300-500. A Level 1 American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) audit (the entry-level audit option) costs between $0.01–0.04 per square foot, with a minimum cost of $2,000–3,000.
3. Higher earnings and happier employees
LEED buildings provide a range of savings-related benefits, but they also unlock increased revenues and productivity. On average, return on investment (ROI) improved 19.2 percent for existing buildings (10 percent for new buildings) that became LEED certified.
Moreover, 87 percent of companies that undertook LEED retrofits experienced higher productivity, 81 percent saw better retention rates, and 75 percent reported better employee health.
In a competitive labor market, LEED-certification gives companies an edge, as 79 percent of employees say they would choose a job in a LEED-certified building versus an uncertified one, according to a survey by the U.S. Green Building Council.
LEED certification also increases occupant satisfaction and reduces tenant churn. Specifically, LEED buildings report 27 percent higher occupant satisfaction, and 6 percent higher occupancy rates. LEED properties command rent premiums of at least 2.1 percent compared to non-certified buildings. This rent premium can grow to over 13 percent as building age increases.
Similarly, LEED properties generate 60 percent more rent per square meter and sell for 60 percent more per square meter than equivalent non-certified buildings. By not getting LEED certified, building owners are missing out on substantial rental revenue each month.
How EnPowered helps building owners lead the market with LEED
Investing in energy efficiency solutions and achieving LEED certification unlocks proven savings. But finding the right solutions can be confusing and time-consuming for your customers.
Many companies can’t start their retrofit projects because they would rather protect their cash flow. But by hesitating, customers are missing out on monthly savings that would repay those assets sooner than they realize.
EnPowered Payments helps building owners purchase your energy efficiency solutions with no upfront costs and minimal risk. By using a portion of energy savings to pay for solutions, building owners can lower emissions and expenses, all while remaining cash flow positive.
Interested in learning more? Reach out today to discover how EnPowered helps building owners boost energy savings and sustainability.
Related Resources
