Going green does pay …eventually. At least that’s what Columbia, Md.-based nonprofit Enterprise Community Partners found in its Incremental Cost, Measurable Savings: Enterprise Green Communities Criteria report, released last fall. It takes an upfront cost of 2.1 percent, or $4,524 per rental unit, for affordable developers to meet the Enterprise Green Communities Criteria—guidelines published in 2009 and designed to address health, economic, and environmental benefits. Developers who build to the criteria will get $4,851 in utility savings per unit throughout the building’s lifetime, an internal rate of return of 17 percent. That equates to an eight-year payback period.
According to the report, the most effective ways to slash utility costs include building to or exceeding Energy Star standards; installing Energy Star appliances and lighting; and installing water-conserving products.
“Our biggest ‘aha moment’ was discovering that installing low-flow fixtures and appliances had such a short payback with great savings,” says Dana L. Bourland, vice president of green initiatives for Enterprise Community Partners, which provides capital and expertise for affordable housing developers.
One of the biggest energy returns for developers came from photovoltaic (PV) panels, which produce an impressive 194 percent return on investment. But unfortunately, the upfront cost of installing the panels, which provide at least 10 percent of a building’s estimated electricity demand, is often too expensive for affordable developers to install unless subsidies are involved.