Calculate your ROI when considering a Green Home
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Green Homes Cost Analysis

What is the ROI

Eco-FriendlyHow much does it cost to build a green home? Zero energy ready homes may cost more to build/buy, but far less to operate. Once built, a green | sustainable home delivers a lifetime of energy savings. Here’s a look at the trade-off.

Perhaps the value of a sustainable home is more than simply a ROI calculation.  Maybe it should be a Return on Green = ROI + ROH + ROL + ROF (Investment, Health, Life and Future).

Depending on the size of the home, the capacity of the PV system and other key components, recent studies have found that a Green Home | Zero Energy Home will:

  • Cost 12% to 20% above a home built to minimum code before rebates and tax incentives.
  • Cost about 5% above a home built to minimum code after rebates and tax incentives.
  • Result in $1,500 to $1,800 total cost savings annually - energy savings offset by any higher financing costs.
A comprehensive study by Efficiency Vermont concluded an impressive list of annual energy savings above code for net zero ready construction:
 Building Type
Efficieny Study Results
 Single Family
 67%The purpose of this study was to explore the financial feasibility of net zero energy buildings. The analysis demonstrated that net zero and net zero ready buildings are a viable and cost effective investment, as compared to code compliant buildings.

Using financing for the additional capital costs to build a net zero building, there are net savings from year one for all building types in the study without applying any rebates or incentives. (excluding office buildings)
 Office: Open FP
 Office: Closed FP
The bottom line for long-term housing costs is that lower energy costs for a green home allow homeowners to recoup the higher purchase price in four to eight years. That’s a very short payback time! From that point forward, homeowners get the best of both – a green home and lower total expenses for mortgage and operating the home. 

Residential 30 Year Operating Costs

The residential analysis shows that net zero is the best investment before rebates or incentives are applied, both in year one and over the 30-year loan period. When additional energy efficiency capital costs and photovoltaics are financed (cumulative interest is shown in red) net zero ready and net zero residential buildings are cheaper to own and operate (operating costs are shown in blue) than code buildings for single family, duplex and quadplex units.
 Operating Costs

The thirty-year financial analysis reveals significant savings for the net zero residential options. The chart above slhows the cumulative 30-year capital (green and purple), operating (blue), and finance (red) costs. The dashed line shows the approximate cost for a net zero building with a 30% federal tax credit for the PV system. Net zero residential options are a cost-effective investment today and provide substantial savings over code buildings.

Additional Information

When buying an older home, it is important to remember future costs when updating the house. In colder climates, this generally means re-insulation. See below for a hypothetical cost breakdown, vist: Cost to Go Green.


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