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The Costs of Green Homebuilding

The net cost of owning a green home can be comparable to that of owning a conventional home – sometimes even less. 


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On average, green homes can add 2.42% in additional upfront costs compared to conventional homes, according to the Costs and Benefits of Green Affordable Housing Study 2005, by New Ecology and the Tellus Institute. Many green homes are built with no additional upfront costs. A 2008 study conducted by McGraw-Hill Construction and the U.S. Green Building Council found that the mean price of green homes purchased by survey respondents was $296,000; the median was $239,000.


Any increased upfront costs will typically be quickly recouped, and homeowners will be saving money for the rest of the home’s lifespan.

Lower Utility Costs

The average U.S. family spends nearly $1,500 on home energy bills per year, according to the U.S. government’s ENERGY STAR program. Green home features can lower energy bills dramatically. Based on the average Home Energy Rating System (HERS) scores of homes certified under LEED for Homes in 2008, predicted energy savings can be up to 30% for homes certified at the basic LEED-Certified level; LEED-Platinum homes have average predicted energy use reductions of 50-60%. In case studies of LEED-Certified homes, builders project water savings of 20-50%, sometimes even higher. Decreased operating expenditures alone can more than pay for the incremental initial investment in greening a home. 


Little changes like replacing the five most frequently used light bulbs in a home with compact fluorescent light bulbs (CFLs), or plugging air leaks around windows, doors, and other wall penetrations can result in noticeably reduced energy bills every month.


Programming a thermostat, using ENERGY STAR®-rated products, reducing indoor and outdoor water use and exploring solar power options are a few of the many strategies homeowners and builders can use to save money on utility costs. LEED for Homes, the REGREEN residential remodeling guidelines and the Green Home Guide can help you learn more about these strategies and select the right strategies for your situation. Visit for more information.

Health Costs

Airborne pollutants are often 2-5 times higher indoors than outdoors. Truly green homes implement strategies that aim to improve a home’s ventilation, exposing residents to more clean, fresh air. They use paints, adhesives and other products that emit little or no volatile organic compounds (VOCs), which can be harmful to respiratory health. They address moisture control concerns to create a healthier indoor climate.

Higher Resale Value

It’s predicted that green homes will be on the market for less time and possibly have a higher resale value than comparable conventional homes, according to the 2007 McGraw-Hill SmartMarket Report on Attitudes & Preferences for Remodeling and Buying Green Homes. Consumers are increasingly looking to homes that save energy and water and have healthier indoor air, the report found, and green homes’ share of the overall housing market continues to grow every year.


The use of more-durable materials and equipment can result in reduced replacement costs and provide additional life-cycle financial benefits.

Financing and Insurance Costs

In some areas, owning a green home makes owners eligible for home-improvement financing options with lenders, and can reduce home insurance premiums. 

Ways to Reduce Costs
  • Focus on assembling an experienced green team when building the home.
  • Employ an integrated design approach when determining what green measures to incorporate.
  • Utilize life-cycle cost evaluations in planning the economics of a project.


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The Costs of Green Homebuilding:  Created on June 4th, 2009.  Last Modified on July 22nd, 2010


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About The U.S. Green Building Council

The U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ is a nationally accepted benchmark for the design, construction, and operation of high-performance green homes and buildings. LEED gives home and building owners and operators the tools they need to have an immediate and measurable impact on their homes' or buildings’ performance. LEED promotes a whole-building approach to sustainability by recognizing performance in five key areas: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality. The Green Home Guide is a resource created by the U.S. Green Building Council.



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