VANCOUVER, Wash. — Earth-loving credit unions, those that invest in environmentally friendly branch design, are much more likely today to have the Earth love them back.
Falling prices for eco-friendly construction are making it possible for CUs to recover the green they invest in energy-savings features a lot sooner, industry experts say.
Steve Kenny, COO of Columbia CU here, has experience building two green, LEED-certified, branches. Those locations, Kenny said, use about half the energy of a standard branch. The high-efficiency heating, cooling, and electrical systems, and numerous skylights that work with dimmers to reduce electricity demand, are leading to savings that will pay for the investments within five to six years. "Then it's money in our pockets after that," he said.
But prices for those systems, and many other green elements, are coming down fast, which should significantly improve ROI on green efforts, construction firms told Credit Union Journal. Kenny estimated that it cost CCU, which ventured into green construction more than three years ago, about 8% above standard building prices to deliver a LEED-certified location.
The Environmentally Conscious Pacific Northwest
Kenny acknowledged that the $790-million credit union's goal was not so much to save money and track those results with its green branches, as it was to be eco-friendly in the environmentally conscious Pacific Northwest.
Fibre FCU, in Longview, Wash., looked at its investment into green a little differently. "We are not going as far as LEED certification," said CEO Larry Hoff. "We want to be community minded. But we looked at practical improvements."
Costs to complete the $620-million FFCU's new operations center last summer were driven up 5% by green features, according to Hoff, who acknowledged that the goal was not to see how quickly it could recoup its extra investment.
"We didn't justify it in that manner. We just looked at the plusses and minuses of each decision we made regarding green features. For example, the low-glare, energy-efficient lighting was a few bucks more. But we know that the working environment is better for employees, which makes them more efficient. How do you measure that?," Hoff said.
What's driving prices down, industry experts say, is a greater demand for green construction that's making environmentally friendly products and materials more mainstream. The economy is also forcing down all construction costs, and eco-friendly materials are no exception.
Robert Mannion, EVP of construction at NewGround, a St. Louis-based design and implementation firm, agreed that the calculations on payback for being environmentally friendly are changing significantly due to lower prices and the economy. "I just spoke with a landscaper on a green project who is offering a very good price because his business is hurting," Mannion said. "He admitted he's not going to make a lot on the project. He just wants to keep his employees on the payroll and pay his bills."
Growing Demand For Green Construction
Add to that the fact that many banks suddenly cut back lending at a time when demand for green construction was growing, and building projects are being stalled and the inventory of green products are stacking up, Mannion explained.
"About five years ago I'd say your costs to build with green features would have raised your price by 10% to 25%," Mannion estimated. "Today that would be more in the 2% to 10% range."
Another factor cutting costs are builders becoming more skilled and efficient at installing energy-efficient features, observed Gregg Thompson, CEO of BCI Group, a Midwest building contractor located in Racine, Wis. "Green technologies are improving every year and everyone is getting better at the installation. What was relatively new a few years ago is becoming fairly commonplace."
Mannion reminded that's a benefit not only to the environmentally conscious, but to budget-minded credit inions as well. "Today may be the time to find the money to add green elements," he said. "The price of energy is down. But I think we got a good taste last year of what's going to happen in the future. All agree it's just a matter of time."
