Cost Outcomes

Throughout the six study regions, the capital cost implications of implementing energy efficiency options, compared to building a standard practice hospital, showed a 3 percent incremental cost premium with the inclusion of a utility incentive. As expected, increasing the amount of building envelope in Scheme B yields approximately 6 percent increase in capital cost from Scheme A to Scheme B. This analysis has not attempted to quantify the quantitative or qualitative benefits of creating a more perforated hospital, such as increased daylight and its effect on staff productivity and retention or patient healing. The potential on-going operational savings associated with these quality building attributes may more than pay back the higher capital investment required to increase the building’s envelope. This analysis concluded that the relative difference in energy demand related to efficiency options are proportionally similar between Scheme A and B. Relative to each scheme’s baseline cost, the cost of implementing energy efficiency options compared to a common practice baseline is proportionally similar, about 3 percent.


Synergistic Savings

The integrated nature of Targeting 100! creates complementary savings in energy and capital construction costs; cost savings in some categories can offset incremental cost increases for energy improvements in other areas. For example, reduced cooling loads were realized by adding exterior shading systems – in this case motorized retractable louver shades—which in turn reduced the size and first-cost of the cooling system. De-coupled systems’ concepts also reduced loads, having a major beneficial impact on primary ventilation duct sizing and creating volume within the ceiling plenum to reduce the floor-to-floor height on patient floors by a minimum of one foot. Cost savings realized by reductions in floor height and ventilation ducting help offset the increased cost for other energy efficiency improvements. These integrated building and systems strategies work in concert to achieve energy and cost savings, thus using a bundled holistic approach to whole building energy efficiency is essential for realizing these savings.

The Role of Incentives

In many regions, utility incentive programs can reduce the incremental capital cost outlays through electric and gas utility incentive programs that fund energy efficiency projects. For this analysis, it was estimated that an integrated whole-building energy utility incentive for this level of energy efficiency savings could support the first-cost of energy efficiency strategies at a value of approximately $4 per project square foot. With this level of incentive, the total cost premium for energy efficiency strategies that meet the 2030 Challenge goal would be reduced from 3.5% to 2.7% percent of the total project cost.

Budget Assumptions

Architectural, mechanical and cost models are based on schematic level considerations. On any specific project, budget fluctuation is common at this stage; it is reasonable to assume that this modest capital cost differential between the code baseline building and the Targeting 100! high performance building options are within a reasonable range for the project to shift budget priorities to accommodate these costs; therefore, at a schematic stage of development, a 3 percent increase in capital cost could be considered “cost-neutral.”

Additionally, some forward thinking hospital organizations are investing in incremental capital cost strategies that meet an acceptable rate of return. These programs emphasize that reasonable increases in first cost for strategies that yield long-term energy savings are a good investment; these investments reduce risk, bring greater stability to the organization’s bottom line, reduce future liabilities, and reduce the organization’s overall environmental footprint.