The simple answer is that on average, our homes cost about 5% to 10% more for the Building Envelope and Systems, including HVAC and appliances, than a similarly fitted-out code-minimum home. The Alternative Energy Systems (usually a Photo-Voltaics array on the roof) will cost another 5% to 10%, depending on the location, and the finished cost of the house. The nicer a home is fitted-out, the lower the percentage increase to go to zero-energy!
I wrote the article below in response to a customer who needed to better understand why some homes were being advertised at un-realistically low prices. This article was written in 2012, costs are much higher for everything today, but the percentages will still apply. Hopefully this will help with your understanding. Please contact us if you have further questions!
Cost per square foot is an extremely unrealistic way to compare the price of different homes. The Real Estate business seems to consider it the only way to compare, but it just goes to show how under-educated many Real Estate agents are.
To start with, there are many ways to count your square footage. Some will count only the conditioned envelope of the house, for which there is an ANSI standard. If you count the footage that way, but then also include all the site development, attached and detached garages, carports, covered and un-covered decks, etc., it does not take a rocket-scientist to see that two equal houses (when counting only the conditioned square feet) could have very different total costs. In the case of large parcels vs. small lots, the site development costs alone can push the cost per square foot up by as much as 20%. Garages and covered deck and porches can add another 50%!
Another method has been used recently by the US Dept. Of Energy and others, who are trying to get a more apples-to-apples comparison of the different ways to build an energy efficient house. With this measurement method, if the garage is fully insulated, whether or not it is conditioned, it is counted as part of the square footage. The cost of building the garage, in this case, can be very similar to the cost of building the rest of the house, depending on how nicely the rest of the house is finished out. All of the costs of site development, outside living areas, etc. are stripped out of the cost numbers, so that you end up with just the cost of “the box”. While this is a more reasonable way to compare different “boxes”, it does very little to illustrate the total cost of the home. Our more recent zero-energy homes typically have come in around $145 per square foot when this standard is applied, whereas the cost to the customer is often upwards of $200, when only counting the square footage of the conditioned area.
Finish costs are the biggest driver of total costs, and can have an even greater effect on the total than large-parcel site costs. Finish costs include everything you see, once the house is finished. This includes the siding, roofing, interior wall surfaces, doors, windows, cabinets, appliances, and even the trim on the light switches and plugs. A nicely finished house, of the same design, can easily cost double that of a simpler counterpart.
Design can also have a dramatic effect on over-all cost. If you have a spread-out design, with lots of surface area, your cost is going to be much higher than with a more compact design. Since we are essentially paying for surface area, and not for the empty space inside “the box”, you will get more “bang for the buck” with a more compact design.
Some of the lowest-cost homes we have built in the last few years were during the worst of the economic downturn, when we could buy lumber at 1973 prices, and could get sub-contractors to work for low wages, with little or no profit margin. We completed more than one zero-energy home in the neighborhood of $125 per square foot, when the site development costs were stripped out. Even in those times, however, you could not even build a code-minimum simple house for under $100 per square foot in our area.
The more budget you have available for any of these choices, whether they be for nicer quality, bigger lot, or a more spread-out design, the easier it is to make responsible trade-offs, so that your zero-energy home can stay within your original intended budget. Simpler floor covering choices, for example, can offset the cost of the PV array on the roof.
To sum it up, if you were buying cars by the pound, that would make as much sense as buying homes by the square foot. A Chevy would cost more than a Ferrari of a similar size. It wouldn’t make much sense, would it? It is all about the quality of the materials, and the workmanship of the craftsmen who are bringing it all together. The value will be evident for a long time, just as in the cars mentioned above. While the Chevy will lose value over time, the Ferrari will hold, or even increase in value over time, as long as the required maintenance is performed.
Ted L. Clifton