Does building intelligently mean we are “rolling in money”?

We have been writing this blog for just over a year now, and finally we are at a point where we feel comfortable talking about the economics of our project. We have been analysing the numbers responsibly in order to give an accurate picture of just how much building intelligently to achieve an energy efficient house impacted the bottom line of the project.

Last year, in the middle of our building project I was teaching a course on corporate sustainability as part of a Masters Degree in Administration in Construction (run by the Pontifical Catholic University of Chile and the Chilean Chamber of Construction). Humbly, I shared our project with the class in one moment, and got some fairly interested responses from some students…imagine a group of 24 men, engineers and architects mostly, being taught by a geographer (and a women), with little experience in construction, but A LOT of experience in sustainability. The thing that surprised me most, and has stuck with me all this time, is that one very interested student shared our blog with some of his colleagues in the Housing Department in Chile. In the next class he told me about this and said that the first response from one colleague about the way we are building our house was that “we must be “rolling in money””.

This response left me completely shocked because we are far from rich. Yes, we are lucky enough that we were able to get a home loan from a bank (and thus we are indebted for the next 25 years). But when we looked at what our budget could buy us in Santiago in comparison to building a house according to our requirements on a plot outside the city, there was no doubt which way we had to go. It all comes down to what criteria are important to each person…a house with a tiny garden, but in a fancy neighbourhood in the city, or a half hectare plot, 60km from the city -but with bus connections and a good highway- and with space, clean air and a peaceful life. And then on top of a country setting we decided to build intelligently from the start so that our operational costs (and environmental impact) would be minimal for the next 30 years. If these decisions supposedly make us “filthy rich” than I have nothing more I can say.

The whole aim of this blog has been to show that designing and building houses with energy efficient criteria in mind from the start is the intelligent thing to do from so many angles, and I really hope we are achieving this objective. We have been very responsible in how we talk about different technical concepts and we are trying as much as possible to show hard numbers/facts about the results of our building decisions, for example sharing openly our temperature and energy use results over the last few months. We want the numbers to speak for us, and not some general, “hippy-inspired” idea of being “green”.

In general, if we analyse the cost of our construction project, which always considered extra insulation, high quality windows and improvements in airtightness and subtract this extra investment, it leaves us the value of a “standard” house. In the end, our investment in improvements to airtightness, windows and insulating represent an additional 13% of the cost of the “standard” house (this cost does not consider the heating system, solar PV system, ACS solar system and mechanical ventilation system). This 13% consists of:

Airtightness:

The airtight membrane we installed around the whole exterior of the house (see post here) had an enormous impact on the air infiltrations and we achieved a record result for Chile of 0,68 air renovations/hour, compared to the average of 24,6 renovations/hour in a standard wooden house. This investment represents an additional 4% to the project cost.

Insulation:

We have written many posts about the importance of properly insulating a house, not only the minimum required in the walls and roof in accordance with the Chilean Building Code (see post here), but also in the floor (see post here) which is currently not considered within Chilean legislation for our type of house. Our investment in additional insulation, over and above the standard insulation in the SIP Panels and the roof, represents 4,4% of the project cost.

Windows:

Today, it is basically a minimum requirement in any house to have double glazed windows. Yet most people think that this is as far as innovation goes when it comes to windows. As we show in a previous post (link), windows play a huge role in the energy efficiency of a house. Given that we have a significant surface area of windows on the north side of the house, we decided to go for the best possible product to ensure adequate airtightness (especially in the sliding panels); reduce thermal bridges by using PVC and not aluminium which is much cheaper; and assist with insulation by having Argon gas between the panes of glass and a low-e laminate. So, in the end, our additional investment in a high standard of window represents 4,6% of our additional costs over the base project.

Was this extra 13% investment worth it? We can already say without a doubt, YES. Our last few posts have shown just how efficient our home is when it comes to energy use and how constantly comfortable it is in terms of temperature.

However, some people still consider some of the characteristics of our house to be expensive or that we were overdoing it on certain aspects. And our response to these kinds of comments is that it is all a matter or perspective and priorities. Our priority was efficiency, the lowest possible operating costs, a high standard of comfort and the added bonus of a lower impact on the environment. Yet we have examples, such as an acquaintance who recently finished building their own house who commented on what our windows must have cost. But he spent about the same amount of money, as we did on our windows, on the installation of a large swimming pool. A pool that provides entertainment for about 4 months of the year and has significant operating costs throughout the year (not only in the summer), versus a structural component of a house that provides long term, tangible economic and physical benefits, all year round. It’s all about perspectives.

The main point we want to make here is that yes, building a highly efficient house does require an extra investment, of between about 10 and 15%. Yet the Return on Investment over the life of a house, when you consider the operational costs of this type of house and the comfort it provides, is significant.

Finally, it is also important to consider than the principles we used to build our house can be applied to everything from social housing to large upmarket homes. In social housing, the mere improvement to airtightness or adding additional insulation, above the bare minimum stipulated in the law can have a huge economic impact on people’s lives, from economic and a health perspectives and quality of life.  

Keep following us to see how the house performed in July and soon we will delve further into the numbers and costs of the project.