By Gregory Kats

This report documents the financial costs and benefits of green schools compared to conventional schools, specifically with reference to Massachusetts. Making schools green is very cost-effective. A national review of 30 green schools and analysis of available research demonstrate that green schools cost 1.5 percent to 2.5 percent more than conventional schools, but provide financial benefits that are 10 to 20 times as large.

These financial benefits include: energy and water savings, reduction in costs associated with waste and emissions, increased student learning and future earning, reduced incidence of student asthma and other illnesses, reduced costs of teacher turnover, and net employment gains for the state. The largest benefits are related to energy cost savings and the impacts of improved student learning on their future earnings. The recent surge in energy prices puts pressure on school budgets, both increasing short-term costs and increasing interest in energy efficiency as a way to hold down future costs. Average green schools cut energy use by one-third compared with conventional school design, providing financial savings three times as large as the cost of greening. Even more important is the impact of green school design and operation on the health and quality of learning environments for students.

Some 50 million students spend their days in schools that are too often unhealthy and that restrict their ability to learn. A recent and rapidly growing trend is to design schools with the specific intent of providing healthy, comfortable, and productive learning environments. These green, high performance schools generally cost more to build, which has often been considered a major obstacle at a time of limited school budgets and an expanding student population.

Conventional schools are typically designed to just meet the building codes that are often incomplete. Design of schools to meet minimum code performance tends to minimize initial capital costs but delivers schools that are not designed specifically to provide comfortable, productive, and healthy work environments for students and faculty.

Few states regulate indoor air quality in schools or provide for minimum ventilation standards. A chronic shortage of funds in schools means that schools typically suffer from inadequate maintenance resulting in degradation of basic services such as ventilation and lighting systems. Not surprisingly, a large number of studies have found that nationally, and in Massachusetts in particular, schools are unhealthy - increasing illness and absenteeism and bringing down test scores. Greening school design provides an extraordinarily cost-effective way to enhance student learning, reduce health costs and, ultimately, increase school quality and competitiveness at both the student and state level.

The main reason for cities and states to adopt green building requirements is to cut costs, improve services, and address a broad array of challenges such as:

This analysis finds that greening schools provides an extremely cost-effective way to help address all these challenges. The financial benefits of greening schools are 10 to 20 times as large as the cost. Green school construction costs 1.5 percent to 2.5 percent more than conventional school construction, almost $4 more per square feet for a typical $25 million, 125,000 square feet school built for 900 students. The financial savings are about $70 per square feet, more than 10 times as high as the cost of going green. Only a portion of these savings accrue directly to the school. Lower energy and water costs, improved teacher retention, and lowered health costs save green schools directly about $15 per square foot, about four times the additional cost of going green. Financial savings statewide are significantly larger, and include lower energy costs, reduced cost of public infrastructure, lower air and water pollution, and a more skilled and better compensated workforce.

Massachusetts state law currently requires the provision of an additional 2 percentin funding for public schools that achieve industry energy efficiency standards. To date, this incentive has only been offered to schools participating in the Massachusetts Green Schools Initiative, a pilot program managed and funded jointly by the Massachusetts Technology Collaborative (MTC) and the Massachusetts Department of Education. Based on the findings of this report, extension of the 2 percent incentive for all high performance schools would be a prudent and cost-effective policy. The large net financial benefits from greening also indicate that a statewide requirement to build only healthy and efficient green schools is also fiscally prudent.

Green schools provide a range of additional benefits that were not quantified in this report, including reduced teacher sick days, reduced operations and maintenance costs, reduced insured and uninsured risks, improved power quality and reliability, increased state competitiveness, reduced social inequity, and educational enrichment. There is insufficient data to quantify these additional benefits, but they are significant and, if calculated, would substantially increase the recognized financial benefits of greening schools.

Despite limits in data and need for additional research, there is now very substantial experience with high performance schools in Massachusetts and nationally. A large body of documented studies and experience allows quantification of costs and benefits of greening schools. For example, there are several thousand studies that examine the impact of high performance design features such as better lighting, temperature control, and improved indoor air quality on health and/or productivity. Analysis of the costs and benefits of 30 green schools nationally, including 12 in Massachusetts, and use of conservative and prudent financial assumptions in analyzing available data provides a clear and compelling case that greening schools today is extremely cost-effective from a financial standpoint. Building Green schools is today significantly more fiscally prudent and lower risk than continuing to build unhealthy, inefficient schools.

For the complete report, contact Gregory Kats at gkats@cap-e.com

About the Author:
Gregory H. Kats is cofounder and Principal of Capital E (www.cap-e.com) a national energy technology and green building consulting firm for Fortune 500 and public sector clients. Kats served as the Director of Financing for Energy Efficiency and Renewable Energy at the U.S. Department of Energy (1996-2001). He co-founded and from 1995 to 2001, chaired the International Performance Measurement & Verification Protocol (www.ipmvp.org). Kats serves as Chair of the Energy and Atmosphere Technical Advisory Group for LEED (the national green building standard) and serves on the LEED Steering Committee. He is the principal author in the most widely referenced study on costs and benefits of green buildings, “The Costs and Financial Benefits of Green Buildings,” developed for 40 California state agencies. He is also a principal author of the Urban Land Institute’s 2005 book, “Green Office Buildings: a Practical Guide to Development.”