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Innovation Will Drive Costs of Green Roofs and Walls by 28% in 2017

Lux Research

Combining diverse approaches can cut costs to $23/ft2 but building-integrated vegetation (BIV) will still depend on incentives for wider adoption, says Lux Research

BOSTON, MA – August 19, 2014 – Building-integrated vegetation (BIV) – the use of green roofs and green walls to improve air quality, manage storm-water and generate energy savings – is experiencing a burst of innovation to lower costs and hasten payback on investment, according to Lux Research.

In the drive to demonstrate economic value, the $6 billion industry has come up with a number of new ways to reduce material, installation and maintenance costs. All told, costs could be cut 28% -- from $38/ ft2 in 2012 to $23/ft2 in 2017, according to a Lux Research analysis.

“There are many untapped opportunities to make BIV a better investment and reduce – though not eliminate – its dependence on subsidies and incentives,” said Aditya Ranade, Lux Research Senior Analyst and lead author of the report titled, “Crossing the Chasm: Demonstrating Economic Value Is the Next Test for Building-integrated Vegetation.”

“Little has been done to date with novel material properties approaches, and further reduction in external irrigation and weeding can halve the 40-year operation and maintenance cost,” Ranade added. “Similarly, waterproofing, drainage and insulation costs can be cut 60%.”

Lux Research analysts examined costs and benefits in the BIV industry, and the critical part played by policy measures. Among their findings:

  • City-level incentives critical to adoption. Given current costs, Lux Research estimated the simple payback period in three cities – Portland, Oregon, Copenhagen, and Beijing – to be in excess of 15 years. But city incentives, such as tax abatements, can sharply cut payback period, enhancing the economic viability of BIV.

  • Green roof cost cuts drive down market size. Cost cuts across the world have exceeded expectations of a modest 2%. Consequently, even though green roof installations are growing, its global market is expected to decline marginally from $5.1 billion in 2011 to $4.7 billion in 2017.

  • Many strong technology developers emerge. On the Lux Innovation Grid, numerous BIV developers earned the highest "Dominant" rating. Most were global firms like Xero Flor, Vegetal i.D, Soprema and Icopal that have experience and scale as green roof system integrators, but measurement and verification players Columbia Green Technologies and Ecotelhado also reached the top quadrant.

The report, titled “Crossing the Chasm: Demonstrating Economic Value Is the Next Test for Building-integrated Vegetation,” is part of the Lux Research 
Sustainable Building Materials Intelligence service.