The Relative Costs and Benefits of Conventional and Green Buildings in Nigeria

Purpose: The aim of this study is to determine costs and benefit of incorporating green features in commercial building with a view to enhancing green building development decisions in Nigeria.Design/Methodology: The study distributed questionnaire to a variety of stakeholders to identify features that makes buildings green in Lagos, Nigeria, determine the cost of identified features, determine the benefits of having green features in the buildings, and determine whether benefits outweigh the costs of green building in Nigeria. The non-financial costs and benefits were quantified and priced using environmental valuation techniques. Capital costs and benefits were brought to their annual equivalent while future costs and benefits were annualized. The Net present value and profitability index were employed in cost-benefit analysis.Findings: The findings indicate that the initial purchase and installation costs of green features in green buildings the study area are fifteen per cent higher than that for conventional buildings but the discounted green costs in use require 25 to 35 per cent less energy and 39 per cent less water annually than conventional buildings. These translate into substantially less electricity and water bills. In addition, green buildings involve higher discounted benefits from productivity and health. Discounted cost benefit analysis showed that green buildings involved positive NPVs over conventional buildings from only eight years into the life span.Practical Implications: The study concluded that medium to long term developers should begin to consider investing in green building in Nigeria given that the benefits outweigh the costs fairly early into the building life span.Originality/Value: The value of the paper is in providing much needed information for enhanced green property investment in Nigeria and Africa.