U.S. Department of Energy - Energy Efficiency and Renewable Energy

Federal Energy Management Program – Guide to Integrating Renewable Energy in Federal Construction

Estimating Renewable Energy Costs

Some renewable energy measures, such as daylighting, passive solar heating, and cooling load avoidance, do not add much to the cost of a building. However, renewable energy technologies typically require large, additional capital investments with savings accruing over the project's life. It is crucial that these systems are considered early on in the budgeting process.

Early budget requests need to include a set of technologies that could be used to meet the project's design requirements and their associated implementation costs. The design team may respond with a different set of feasible technologies, but it is wise to have an existing placeholder in the budget. Federal agencies can continue to update the budget as decisions are made on the optimal set of renewable energy technologies for the specific project.

This section enables Federal agencies to provide early estimated costs for a specific combination of renewable energy technologies within a project.

• Planning/Design Costs
• Renewable Energy Technology Costs
• Renewable Energy Cost Matrix
• Additional Technology Information

Planning/Design Costs

Leadership in Energy and Environmental Design (LEED®) accredited professionals recommend allocating approximately an additional 3% of the overall planning and design budget for green construction. It is necessary to include an additional premium when integrating renewable energy into a project.

Assuming that renewable energy is being integrated into a sustainable building that already uses an integrated design process, the LEED 3% number incorporates some of the additional required budget needed. Federal agencies likely need to plan for an additional increase of 1.5% (or around 4.5% total) of a traditional planning and design budget for integrated design that includes significant renewable energy use. This is, of course, a rough estimate that can be used for initial budgeting purposes.  

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Renewable Energy Technology Costs

Federal agencies must consider four factors when estimating the cost of integrated renewable energy technologies:

• Initial installation costs
• Operations and maintenance (O&M) costs
• Replacement costs for system components
• Useful life of the system.

Renewable energy is capital intensive taking into account initial costs for equipment and labor. This is a trade-off since renewable energy technologies, with the exception of biomass, do not require fuel and have no associated fuel costs. O&M costs are ongoing throughout the lifetime of the project. Renewable energy technologies may require replacement of certain components over the useful life of the system. On a wind turbine, for example, gearboxes and bearings will need to be refurbished or replaced periodically to ensure that the system runs at maximum capacity for its entire useful life.

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Renewable Energy Cost Matrix

Costs and useful life vary by renewable technology. FEMP and the National Renewable Energy Laboratory (NREL) aggregated a range of actual technology system costs into a renewable energy cost matrix to provide real-world estimates for use in planning and budgeting. Current technologies covered in the matrix are photovoltaics, solar hot water, solar ventilated preheat, wind, and biomass technologies. Some of these technologies, such as wind and biomass, are more commonly applied in utility scale applications, so these costs may be slightly lower than a Federal agency may be able to attain.

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Additional Technology Information

To assist Federal agencies in estimating early technology costs, FEMP provided available cost information for two additional technologies, geothermal heat pumps and daylighting with skylights, that are not currently available in the FEMP cost matrix.

Geothermal Heat Pumps

DOE demonstrated geothermal heat pump space heating/cooling and hot water heating technology at a new printing center.

It is common for the geothermal heat pump industry to refer to costs for the ground source portion of the system on a per ton basis. The table below, although focused on residential-scale systems, tracks the actual cost of installed geothermal heat pump systems in a 2008 review of the Indiana Residential Geothermal Heat Pump Rebate program.

According to a 2007 report to Congress on the ground-source heat pumps at Department of Defense facilities, O&M costs of geothermal heat pumps at defense facilities was estimated at $7.67 per ton per year. The life-cycle for the heat-pump portion of the system is similar to other heat pumps, but the below ground portion is designed to last 50 years.

Daylighting

A complete renovation of this Social Security Administration Annex Building avoided $25 Million in new construction costs, while recycling and salvaging materials from the original interior led to 76% of the original building's interior materials being reused. Daylighting and updated lighting led to a 32% reduction in lighting.

Daylighting is the practice of using natural light to illuminate building spaces. Skylights are one effective method used to provide daylighting. They admit more light per unit area than windows and distribute it more evenly over a space.

The table below provides data from the 2008 DOE report entitled Commercial Building Toplighting: Energy Saving Potential and Potential Paths Forward. It provides costs associated with using skylights per square foot of space.

Skylights in conditioned space refers to those used in a typical office space or equivalent usage. An example of skylights in unconditioned space would be a warehouse where part of the steel roofing was replaced with a translucent material to allow daylight into the space.

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