ENERGY EFFICIENCY AND ITS IMPACT ON BUILDING COST

BY

CHIEMELIE NWANGWU

17CA022945, 220000036

NOVEMBER, 2022
 ABSTRACT

Building cost is a part of a building project in the construction industry, in which without it, a

building project cannot be carried out. Building cost is mainly done by the quantity surveyor and

usually is prepared in the bill of quantities.

While building cost is a topic that stands on its own, we need to explore the need for energy

efficiency. With the impact of environmental and energy-related issues, energy-efficiency

improvements in buildings are a top concern that has to be addressed and handled by designated

authorities worldwide (Diakaki, et al., 2018).

With the economic crisis and the global recession caused by armed conflict and inflation, the

cost of services is usually on the rise. From a bungalow to a three-bedroom apartment, the prices

may differ depending on the location, type of building, and the materials to be used.

This term paper evaluates and explores energy efficiency, how energy efficiency works, the

reason for energy-efficient buildings, building costs, factors affecting building costs, and how

energy efficiency affects building costs generally in today’s modern world.

Keywords: Energy efficiency, Energy efficient buildings, Building Cost

A building is defined as an enclosure in which different events and activities are conducted

(Designing Buildings, Wiki, 2021). It is a structure in which necessary components exist for the

building to function, such as the foundation, walls, and a roof. Buildings come in different types,

according to function: residential, educational, institutional, and commercial buildings

(ProductLine, 2019). In order to successfully execute and complete a building project, we must

be able to sit down and estimate the cost of a building considering the materials, workforce, and

location of the site. The construction industry and the building are mainly controlled by money.

One has to have a lot of finances coming in and not much going out (Buildxact US, 2022).

The construction industry (CO) is deemed to be one of the largest industries worldwide, as an

estimated $10 trillion is spent on construction-related goods and services annually (McKinsey

Global Institute, 2022.). The construction industries pour a lot of hard work and capital into

erecting buildings that last for a very long time. In this process, a lot of CO2s is released into the

atmosphere (Diakaki, et al. 2018). As a consequence of these events, there have been serious

calls for ways to control and minimize the climate change effect.

Energy efficiency is one of the topics in architecture that is often discussed as a passive way to

reduce greenhouse gas emissions, both direct and indirect emissions from fossil fuel combustion,

consumption, and electricity generation (IEA, 2018). Energy efficiency is one of the methods

through which mankind can meet the burgeoning demand for energy, while lowering the energy

consumption, which in turn limits the emission of greenhouse gases in the atmosphere.

The idea of energy-efficient buildings has gathered a significant impulse over the years

(Aboulnaga, 2013). For example, instructions on green buildings with standards and regulations
have been reviewed, scrutinized, and presented. In the Middle East, Dubai in the UAE was

ranked as the ninth city to put into service green building specifications and regulations to be

implemented (Aboulnaga, 2013).

When designing a building, the cost of the building has to be estimated, and further expenses

added. This helps to determine the variance from the budgeted cost and to comprehend the cost

impact on the performance and the profit of the project (Annamalaisami and Kuppuswamy,

2019). Thus, one can safely say that the building cost is the most important factor to determine a

project’s success (Annamalaisami and Kuppuswamy, 2019).

This term paper seeks to discuss in depth:

 Energy efficiency and how energy efficiency works in buildings

 Factors influencing energy efficiency in buildings

 Definition of Building cost and factors affecting the building cost

 The relationship between building cost and energy-efficiency

 How energy efficiency affects building cost affirmatively and non-favorably.

When people talk of energy-efficient buildings, we usually think of buildings that use less

energy for the same productivity. Energy efficiency implies using less for more. It entails

methods and procedures infused into the design of a building that helps to minimize the cost

of expenditures on energy whilst doing the same tasks that other buildings without energy-

efficient strategies perform.

Energy efficiency is one of the most unnoticed solutions to the energy problems confronting

the world, and mankind as a whole should be sensitive and not become complacent when

confronting environmental issues that affect the world.

1.1 HOW ENERGY EFFICIENCY WORKS FOR A BUILDING

A building’s energy efficiency is determined by the range to which the energy consumption

per square meter of the area of the floor of the building adds up to the standardized energy

consumption for that specific building under the defined conditions of the climate in a given

area.

The benchmarks are gotten by examining data on different types of buildings in a specific

country. A benchmark is usually applied to HVAC (Heating, Ventilation, and Air

Conditioning systems), lighting (both internal and external), controls for pump machines, and

other special electrical equipment.

The calculation of the energy lost by a material can be called the U-value. The U-value

implies the heat conducted by an element from one side to the other by estimating the amount
of heat the material allows to pass through it. They calculate the energy efficiency of a

combined building component material or its section. A component with a low U-value

displays a good amount of energy efficiency. Building components like walls, windows,

doors, and skylight windows, could lose or gain heat, and thus the minimum criteria for the

energy efficiency of these components were established in most building codes.

Energy efficiency is simplified in a formula as the ratio of needed energy or work output to

the tallying input. In the case of a building, the less energy needed to bring forth the needed

output, the more energy efficient the building will be. The efficiency is the useful energy

transmitted per the given energy, then multiplied by one hundred (100). That is

USEFUL ENERGY TRANSMITTED/

1.2 WHY WE NEED ENERGY-EFFICIENT BUILDINGS

Energy-efficient buildings are necessary for this time and age because there arises the need to

reduce the impact of greenhouse gases in the atmosphere and the effects of global warming

and climate change. This helps in environmental management, and it preserves the future of

our unborn generation.

We need energy-efficient buildings for many purposes. Mackres (2016) published an article

deliberating on the reasons we need to focus on energy efficiency for the benefit of cities.

These reasons are listed below:

and there are better returns when efforts are directed toward buildings that have

energy-efficient features in them.

 They offer favorable economic opportunities, especially for developing countries in

Latin America, Asia and Africa – Studies have shown that there is incredible potential

when state-of-the-art building practices in new construction methods in developing

countries are put in place. Energy-efficient building harvests economic benefits, such

as preventing the need for costly renovations and years of inefficiency.

 It helps to contain climate change – energy-efficient buildings often possess little to

no marginal cost or give an investment return in the form of energy cost savings as

rapidly as six months to twelve months.

 Control of illnesses and deaths connected to air pollution, especially in places prone

to all forms of pollution: energy efficiency in buildings give better ventilation, and

they offer cleaner combustion than ordinary traditional buildings. By using less

energy, they temper the pollution generated outdoors, reducing fossil fuel waste

produced by power generation.

Energy-efficient buildings that make optimal use of natural resources are important to

accomplishing sustainability in terms of development, especially in architecture. With

the investments made in them today, cities can bring forth economic, social and

environmental opportunities for the future.

When the discussion of a building project arises, there is always the need to estimate the prices

of materials, and the cost of a building depends on the type. Cost is generally expressed as the

sum of expenditure for products, including time, legal tender (money), and labor workforce

(Advanced English Dictionary, 2012). In this context, the product consists of both goods (the

building) and services (Skilled and non-skilled workers).

From the definition of cost given above, we can safely ascertain that building cost consists of the

total sum of the cost of the building, erection, acquisition, remodeling, and renovation (in some

cases) of the built infrastructure.

We need to estimate building costs for the following reasons:

 Accurate planning – estimating a building cost permits you to create plans with details

that give regard to external factors such as climate, conditions of the site, regulatory

recommendations, and other unforeseen circumstances. Such circumstances include

problems associated with labor, such as strikes, that may affect a building project carried

out over a long-term period.

 Better management of resources – it is easy to coordinate resources, tag and apportion

them, and produce a building schedule that limits the waste of time and money.

 Better view of costs – when an individual or a group of people who want to execute a

project sit down and estimate the cost of carrying out the project, they begin to see the

practicability of the project.

(Source derived from Buildxact, U.S., 2022).

The timeframe for calculating the building cost varies, depending on the building materials.
2.1 FACTORS THAT AFFECT BUILDING COST IN A PROJECT

There are several factors that determine a building’s cost. Cunningham in 2013 gave the basic

factors that can have an impact on a building cost. These are the client’s identity and needs, the

project’s nature, the professionals in charge of developing its design, the choosing of procurance

options, the emerging market conditions, and the legal restraints.

The Nature of the Project – the building cost will be decided by special feats and these

features are hugely determined by the architect. Buildings differ according to type, size,

and function, and they are produced to meet the designated needs of the client. There are

endless choices of designs, and the ensuing costs can be cumbersome to predict

dependably.

The architect – the architect uses his or her skill set and gift to bring value to the

community. The architect mostly leads the design team and performs such activities, such

as preparing the bid documents (Waldrep, 2014). Choosing the architect is an important

factor for any type of project and will reflect upon the client’s needs (Cunningham,

2013).

The Building Function – what the building will be used for will affect the building cost.

For example, a building marked out for a multi-purpose function will cost way more than

a building for a singular function. Each building and its cost must be associated with its

individual design which is measured against identical local and foreign projects

(Cunningham, 2013).

The Design Cost – the geometrics of the building have significant effects on the cost.

The structure of the building is associated with its complexness, form, and size. An

example of such work that deliberates more on this issue is Chapter 2 of Cartlidge (2013).
Buildings with bigger, simpler, typical, rectangular floor plans and elevations cost less

than smaller, more complex formed, angular or curved buildings. Easy setting out and

solutions that are buildable, promote better use of the plant, with higher productivity and

less waste (Cunningham, 2013).

Complicated layouts and details assemble slower, and risks of defects and mistakes

usually occur.

Material Choices - the quality and quantity of materials will have a substantial bearing

on the project’s cost.

The material choices, with the cost, can be affected by factors other than the quality of

aesthetics. For instance, fast-track construction projects that require reinforced or precast

steel will definitely cost more than ordinary concrete which is the cheaper option.

The Position toward life cycle costs and Sustainability – Buildings generate costs with

the passing of time due to issues like first capital costs, operating costs, maintenance

costs, disposal of waste, and fiscal costs. The attitude of the client towards the first

against the building’s whole life cost can substantially affect the recommendation. It is

necessary to decide if one spends more money initially on better options so that money is

saved for operating and maintaining the facility (Cunningham, 2013). The components

affecting this decision involve:

- What is the building’s lifespan?

- How likely is the client to occupy the building?

- Is the more costly option a worthy investment?

- The flexibility of the budget of the client to fund more buoyant, better quality or more

economic structures or systems

client. Clients are the providers of the fees, be they individuals or multinational firms.

The importance of clients cannot be overstressed, as the pockets of the clients speak on

the type of buildings to be designed and the finances to be expended.

Sometimes, clients do not get the type of project they desire, because they may not be

able to communicate what they want to the building professionals, especially the

architects. The architects and the engineers communicate differently that the building

should be constructed in a different way. With the expectation that the project will be

successful, the clients get disappointed that their needs were not met.

The needs vary from one client to another. One specific factor for each client could be

unimportant for another.

The quality of the considerations – if a project is completed before the given deadlines,

but fails to meet the standards of quality, such a project can be termed as an

embarrassment and some may be right to call the project failed; an example of such is the

Priory Hall, in Ireland.

The idea of quality has many aspects and must be assessed subjectively. Many of these

aspects are implicit in the project’s design, but others associate with how successfully the

contractor builds the design on the site (Cunningham, 2013).

The considerations on Cost – cost is an important factor in most projects and some

clients will look for a cheaper price. However, these steps usually portray negative effects

on the standards of quality and aim for the best value for money.
Projects that are impracticable and insufficient often result in projects becoming fiscal-

driven where less expensive choices are preferred to more favorable or sustainable

alternatives. (Cunningham, 2013).

Considerations about Time – a client wants a building to be completed on time. Rapid

completion of the project is often needed for commercial developments. There is pressure

to accomplish early finishing which intensifies when funding and interest costs affiliated

with getting the site.

Clients who put cost over speed, experience longer development programs, as the designs

must be significantly completed before the tenders can be obtained. This action could

span a considerable time frame as careful ideas are needed to develop and fine-tune

scheme design.

The Nature of the selected Site – the client needs to visit the site and determine the

development of the area, the proximity to the road, and other surrounding infrastructure

in the vicinity along with others. When this process is followed, then the next proceeding

steps can be taken on the site (Maramani, 2020).

Location of Site – where the site of the execution of the project will impact its cost. For

example, highly-valued sites will draw high-value developments and it is not so

appropriate to locate projects of low value on these sites.

Physical Site Conditions – the topography of the site which include the natural features

of the site, the conditions on ground and the hinderances, the existent and close buildings,

the over-ground and underground services, all affect how the building is designed and

constructed afterwards. These features must be checked to discover potential issues

concerning the site.

must be given consideration in the design.

Available Resources – labor easily attracted and materials easily gotten ensures that

unnecessary mobility and its costs are not incurred in the course of carrying out the

project.

Climate – the climatic conditions and its history at a given location also contribute to the

site nature. Some areas may be prone to flooding, while some may be prone to erosion;

that is the reason there needs to be a proper decision making.

3.0 RELATIONSHIP BETWEEN ENERGY EFFICIENCY AND BUILDING COST

As the definition of energy-efficiency and building cost have been established, with their

uses, we need to establish the affiliation of energy-efficiency with building cost, and

determine if energy-efficient buildings have contributed to their cost in terms of making

the project cost-efficient, or disfavored the cost.

When an energy-efficient strategy is used in a building, there are different methods to

check the relationship between cost and the energy use. For example, there are traditional

methods like simulation of energy and statistical modelling. In research from Morrissey

and Horne (2011) on residential buildings in Victoria, Australia. It was discovered that

the energy cost saving of more efficient buildings outweighs the initial capital for

construction and reduces the lifecycle cost as opposed to buildings with no energy

efficiency considerations. Cost savings from highly efficient buildings are significant in

the long run, considering the ever-rising cost of energy.

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