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Construction Cost Vs. Lifetime Cost

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Main Page - Challenges - Editing Tutorial

The Challenge...

Focusing on construction cost versus lifetime cost inhibits adoption of Green materials, designs, processes, and business models. Whatever package of green building products is offered to post-fire rebuilders, including generation of onsite electricity/heating/cooling, and regardless of who funds the reconstruction (insurance or refinancing), the currently higher upfront costs for green materials and design need to be reduced. Reframing them into lifetime costs so that new approaches can be used to share and amortize up-front costs is part of the challenge.

Alhambra2001

Alhambra

Therefore...

Explore new business models with builders and home product makers that shift this focus. One approach is to reframe components of a house from products to services. Novel business models are emerging where lifetime cost is the organizing idea. Examples include CitizenRe.com and SunRunHome.com who install and maintain solar electric panels on homes and charge the homeowner for electricity at a fixed price/watt. The homeowner does not buy panels; he or she pays for solar power. Interface, a major manufacturer of carpet tiles and other flooring, installs, maintains, and removes/recycles flooring material for an “ Evergreen Lease” service fee for “flooring services.”

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