What are the best practices for estimating the lifecycle cost of green building materials?

2 Identify the cost elements

The next step is to identify the cost elements that are relevant for your LCCA. These include the initial costs, such as purchase, installation, and commissioning; the operational costs, such as energy, water, maintenance, and repair; and the disposal costs, such as demolition, recycling, or landfill. Depending on your project, you may also need to consider other costs, such as taxes, incentives, financing, or insurance. You should also account for the benefits of green building materials, such as improved indoor air quality, health, comfort, productivity, or resale value.

3 Collect and verify the data

The third step is to collect and verify the data that you need for your LCCA. You can use various sources of information, such as manufacturers, suppliers, contractors, consultants, databases, standards, or case studies. However, you should always check the reliability, validity, and applicability of the data for your specific project and context. You should also document the sources and methods of data collection and analysis, and report any uncertainties or limitations.

4 Apply the discount rate and calculate the net present value

The fourth step is to apply the discount rate and calculate the net present value (NPV) of each alternative. The discount rate is a percentage that reflects the time value of money, or how much a future cost or benefit is worth today. The NPV is the sum of the present values of all the costs and benefits over the lifespan of the material. By comparing the NPVs of different alternatives, you can determine which one has the lowest lifecycle cost or the highest return on investment.

5 Perform a sensitivity analysis and a risk assessment

The fifth step is to perform a sensitivity analysis and a risk assessment to test the robustness and reliability of your LCCA results. A sensitivity analysis is a method of changing one or more variables or assumptions in your LCCA to see how they affect the NPV of each alternative. A risk assessment is a method of identifying and evaluating the potential risks or uncertainties that may affect the costs or benefits of each alternative. By performing these analyses, you can identify the key drivers and parameters of your LCCA and assess the range and probability of outcomes.

6 Communicate and use the results

The final step is to communicate and use the results of your LCCA to inform your decision making and design process. You should present your results in a clear, concise, and transparent way, using tables, charts, graphs, or other visual aids. You should also explain the assumptions, methods, data, and limitations of your LCCA, and highlight the main findings and recommendations. You should use your results to compare and select the best green building materials for your project, and to monitor and evaluate their performance over time.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?