INNOVATIVE BUILDING 

TECHNOLOGY GUIDE

SELECTING THE BEST SOLUTIONS FOR YOUR PROJECT

U.S. Department of Housing and Urban Development | Office of Policy Development and Research
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Innovative Building Technology Guide 

Selecting the Best Solutions for Your Project 

Prepared for: 

U.S. Department of Housing and Urban Development 

Office of Policy Development and Research 

Washington, D.C. 

Prepared by: 

Newport Partners LLC 

October 2017 
Innovative Building Technology Guide 

Disclaimer

Disclaimer

The contents of this report are the views of the contractor and do not necessarily reflect the views or policies of 

the U.S. Department of Housing and Urban Development or the U.S. government.
Innovative Building Technology Guide 

Preface

Preface

More than $400 billion are spent each year to power the residential and commercial buildings in the 

United States. This amount is nearly 70 percent of all electricity consumption, about 40 percent of 

the nation’s energy bill, and contributes to nearly 40 percent of the carbon emissions in the country.1

Although these numbers may seem alarming at first, they also highlight a significant opportunity. 

Improving the efficiency of our buildings does more than just save money and energy; it supports the 

creation of new jobs, reduces pollution, and supports the local and national economies. 

The shift toward more efficient and sustainable buildings has been accompanied by increased emphasis 

on resiliency and durability. In just the past 10 years, significant changes have been made in construction 

and design methods—focusing on stronger, safer, and more durable buildings. Our buildings need to 

stand up to natural hazards, moisture, pests, occupants, and other elements that can undermine the 

performance of the structure. The efforts made toward improving energy efficiency will be realized only 

if the building is designed to endure these various conditions. 

The affordability of our buildings also stands to improve greatly from increased efficiency and new 

construction methods. Energy, construction, and maintenance costs can contribute substantially to the 

financial burdens of buildings, rendering them unaffordable to many owners or tenants. Implementing 

energy-efficient strategies results in lower energy consumption and lower utility bills for owners and 

tenants. Improved construction methods and practices produce higher quality and more durable 

buildings that can decrease construction costs and future maintenance and repair needs. 

This increased emphasis on constructing buildings to a higher standard has resulted in significant 

investments in research and development of innovative building technologies. The landscape of building 

products, materials, components, and systems has increased substantially in recent years. These 

advancements have paved the way for the new design and construction methods that make buildings 

stronger, safer, more durable, and more efficient. Many options are currently available to building 

owners and decisionmakers when investigating new technologies that can improve their buildings. 

This document, The Innovative Building Technology Guide, is important today to assist in the 

decisionmaking process. Just as no two buildings are the same, different technologies, products, 

systems, and building components differ in the types and quantity of benefits they offer and the impact 

their advantages can have on a specific building. It can often be overwhelming and confusing for owners 

and decisionmakers to determine which technologies are the best fits for a given project. No one-sizefits-all solution exists to improve building construction efficiency and, thus, key decisionmakers need 

to be educated—not only about what options are available to them, but also about how to evaluate 

these options in relation to their project. By developing this guide, we provide a valuable resource that 

will assist building owners and operators, design professionals, and other decisionmakers through the 

process of identifying, evaluating, and ultimately implementing the technologies that best fit their 

needs. 

1 http://energy.gov/eere/buildings/about-building-technologies-office
Innovative Building Technology Guide | v

Contents

Contents

Chapter 1. Introduction to the Innovative Building Technology Guide ........................................................1

About the Guide....................................................................................................................................... 1

Using the Guide ........................................................................................................................................ 2

Background on Building Innovation .........................................................................................................4

Evaluating Building Innovations (Economics, Feasibility, and Performance)............................................5

Starting Considerations and Project Context........................................................................................... 6

Chapter 2. Economic Considerations.......................................................................................................... 10

Economic Top 5 ...................................................................................................................................... 10

Introduction ...........................................................................................................................................10

Conceptual Phase—Funding Sources and Incentives.............................................................................13

Funding Sources ................................................................................................................................. 14

Incentives ........................................................................................................................................... 14

Reserve Funds ....................................................................................................................................15

The Split Incentive Problem................................................................................................................15

Split Incentive Solutions.....................................................................................................................15

Scoping Phase—Budget Priorities .......................................................................................................... 17

Design Phase—Cost/Benefit Analysis and Optimization ........................................................................18

First Cost/Initial Cost..........................................................................................................................19

Simple Payback................................................................................................................................... 20

Savings-to-Investment Ratio .............................................................................................................. 21

Monthly Cashflow .............................................................................................................................. 21

Life-Cycle Cost Analysis......................................................................................................................23

Value Engineering and Optimization .................................................................................................. 24

Implementation Phase—Operational and Maintenance Costs.............................................................. 27

Financing and Interest Costs ............................................................................................................. 27

Operating Costs.................................................................................................................................. 27

Maintenance/Repair Costs................................................................................................................. 28

Replacement Costs.............................................................................................................................29
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Contents

Resale Value .......................................................................................................................................29

Indirect Costs or Savings .................................................................................................................... 29

Chapter 3—Feasibility Considerations ....................................................................................................... 30

Feasibility Top 5......................................................................................................................................30

Introduction ...........................................................................................................................................30

Conceptual Phase—Occupant and Program Needs ............................................................................... 31

Scoping Phase—Local Zoning and Building Codes.................................................................................. 32

Design Phase—Compliance.................................................................................................................... 37

Climate Appropriateness.................................................................................................................... 43

Implementation Phase—Construction Trades and Schedules................................................................46

Schedule and Construction Staging....................................................................................................46

Availability of Experienced Labor.......................................................................................................47

Chapter 4—Performance Considerations...................................................................................................48

Performance Top 5.................................................................................................................................48

Introduction ...........................................................................................................................................48

Conceptual Phase—Desired Performance Attributes............................................................................. 49

Energy Efficiency ................................................................................................................................50

Sustainability/Green........................................................................................................................... 52

Durability/Resiliency........................................................................................................................... 53

Low Maintenance...............................................................................................................................54

Disaster Resistance.............................................................................................................................54

Water Efficiency.................................................................................................................................. 55

Health/Indoor Air Quality...................................................................................................................56

Scoping Phase—Product Selection and Review ..................................................................................... 57

Identify and Prioritize Project Goals and Objectives.......................................................................... 57

Perform Initial Research..................................................................................................................... 57

Review Manufacturer Specifications and Professional Perspectives.................................................58

Consult With Your Team.....................................................................................................................59

Check Product Labeling, Certification, and Testing............................................................................ 59

Evaluate the Contractor/Installer....................................................................................................... 61
Innovative Building Technology Guide | vii

Contents

Design Phase—System Integration.........................................................................................................63

Project Example: Renovation of Existing Building .............................................................................65

Project Example: Space-Heating/Cooling Equipment Replacement...................................................66

Implementation Phase—Verification ..................................................................................................... 67

Appendix: Evaluation Tools and Resources................................................................................................ 69

Economic Tools and Resources...............................................................................................................70

Feasibility Tools and Resources.............................................................................................................. 73

Performance Tools and Resources.........................................................................................................77
Innovative Building Technology Guide | 1

Chapter 1: Introduction to the Innovative Building Technology Guide

Chapter 1. Introduction to the Innovative Building Technology Guide

Organizations and agencies that own, manage, upgrade, and operate assisted housing facilities (or 

other non-market-rate housing) are often key decisionmakers regarding systems, materials, equipment, 

and technologies that will be incorporated into new construction and renovation projects. Although 

design and building professionals, such as architects, structural and mechanical engineers, and building/

trade contractors, often provide guidance regarding building systems and materials, HVAC (heating, 

ventilation, and air-conditioning) and water heating equipment, recommendations often revolve around 

those technologies that are most familiar and have the lowest first costs. Opportunities to enhance 

building performance and reduce operating costs over time are frequently lost due to lack of adequate 

consideration of newer, less well-known technologies. For existing buildings, this tendency is often 

exacerbated by the additional constraints of space, other existing systems in the building, scope of the 

renovation project, and occupancy; a typical scenario is simply to replace in kind. Project schedule also 

drives the decisionmaking process and, far too often, selections are made hastily.

This Innovative Building Technology Guide is designed to assist building owners/operators and design 

professionals through a process that encourages thorough and rational consideration and comparison 

of multiple technologies to select the best fit to fulfill a given purpose(s). Upfront economic costs will 

be only one of multiple economic considerations. Life-cycle analysis, return on investment, and total 

monthly operating expenses (cashflow)—including utility bill costs, and principal and interest payments 

on financing—will be important considerations. Tools and methodologies to analyze and compare 

performance of different system options will provide assurance regarding maintenance schedules and 

costs, longevity, and documentation that the equipment or products function as expected. Tools that 

aid in review and understanding of local code compliance, in compliance with possible green standards 

or high-performance programs, and in verification that selected technologies will be compatible with 

one another are important metrics to ensure feasibility and constructability in all homes and categorized 

specifically based on climatic, disaster, and other weather concerns.

About the Guide

The building technologies landscape is extremely broad and encompasses a wide variety of components 

and systems that make up a building or home. This broad landscape makes creating a comprehensive 

guide, like this one, challenging. The authors must take into consideration that the level of understanding 

and knowledge about buildings, the components and systems that they encompass, and new 

technologies varies greatly from person to person. For that reason, it is the intention of the authors that 

this guide be relevant to the masses.

When integrating an innovative technology into a project or building, a building professional needs to 

consider three major types of analysis. (1) An economic analysis would be performed to determine and 

identify all costs associated with the technology and project to make the most cost-effective decision. 

(2) A feasibility analysis would be performed to determine if a particular technology is applicable and 

compatible with the project or building. (3) Finally, a performance analysis would help determine 

whether the technology will achieve the goals and objectives of the project.

The guide is structured around these three major evaluation channels, or considerations, each one 

headlining a different chapter. Although these three types of analysis provide a framework for a 

comprehensive evaluation of building technologies, it is also important to understand how they tie into 

overall project management. Project management structures have many different variations, but most 

generally incorporate very similar components. For purposes of this guide, we identify four different 
Innovative Building Technology Guide | 2

Chapter 1: Introduction to the Innovative Building Technology Guide

phases of a project management structure: conceptual, scoping, design, and implementation. These 

phases outline a general timeline for a project; however, it is important to remember that economic, 

feasibility, and performance considerations are critical throughout the life of a project. Instances will 

occur when certain evaluations and considerations will need to be revisited again during different 

phases of the project.

The four project decision phases identified by this guide include—

Using the Guide

The following illustration (on page 3) offers the reader a depiction of the structure of this guide. 

Economic, feasibility, and performance considerations discussed in chapters 2, 3, and 4, respectively, 

are represented by the columns. The rows are decision phases that are common across each of the 

considerations. Each row is a subsection in the chapters on the considerations. Furthermore, this 

illustration is used throughout the guide to help orient the reader as to what consideration and phase is 

being discussed in that subsection.
Innovative Building Technology Guide | 3

Chapter 1: Introduction to the Innovative Building Technology Guide
Innovative Building Technology Guide | 4

Chapter 1: Introduction to the Innovative Building Technology Guide

Background on Building Innovation

In regard to technology, innovation means finding a 

better way to do things or improving something that 

already exists. Innovation is what drives progress 

in all industries. Can you even imagine our lives 

without it? Automobiles were a rich man’s toy at 

the beginning of the 20th century until, through 

innovation, Henry Ford developed the Model T. Fast 

forward to the present and we have cars that can 

be plugged into electrical outlets, drive hundreds of 

miles, and accelerate to speeds of more than 200 

miles per hour. We have clearly come a long way 

since the horse and buggy. Innovation is responsible 

for this progress.

The same can be said about the building industry. 

Shelter is an essential part of human life. Our early 

ancestors built structures with their own hands 

from the natural resources available to them. Early 

Americans built log cabins, a construction method 

that was advanced for the time. The Industrial 

Revolution paved the way for faster construction 

through factories, improved manufacturing, and 

more durable structures with the creation of new 

building materials such as steel and concrete. These 

new capabilities, coupled with the explosion of the 

global population, the demand for strong, safe, and 

quickly constructed buildings drastically increased.

Technological advancements continue to offer the 

opportunity for further advancements in building 

performance. Today, the market places increased 

emphasis on constructing sustainable and energyefficient buildings. New technologies and innovations enable us to construct buildings that consume 

a low amount of energy and, in some cases, even generate their own. Manufacturing improvements, 

new materials, improved construction methods and best practices, understanding building science, and 

renewable energy technology are some areas that provide the ability to construct high-performance 

buildings.

Many different building components have seen significant growth in regard to technological 

advancements that offer great benefits to the building industry. Insulation used to consist of straw and 

mud being stuffed between the spaces of the walls of structures. Over time, new materials, such as 

fiberglass, cellulose, and foam insulation types, were developed; all of these materials have continued 

to improve the thermal performance of our buildings. Similarly, in the 18th century, a fireplace was 

the main source of heating for a building. When Benjamin Franklin invented the Franklin stove, he was 

innovating. His stove used half the wood a normal fireplace used while generating twice as much heat. 

Today we have extremely efficient whole-house heating systems that incorporate air-conditioning and 

ventilation that provide improved comfort at the touch of a button.

Source: Energy Efficiency in Buildings: Transforming 

the Market, World Business Council for Sustainable 

Development, August 2009

According to a report by the World 

Business Council for Sustainable 

Development, the building sector 

accounts for an estimated 40 percent 

of global energy consumption. In 

addition, in 2007, HUD determined 

that more than 6 million households 

in the United States lived with either 

moderate or severe housing conditions. 

These statistics are alarming; however, 

they also offer a great opportunity for 

improvement. Most of today’s buildings 

will be used for the foreseeable 

future, and, without investing in these 

technologies as opportunities arise, we 

are not only missing out on short-term 

benefits but also on long-term ones. 

The sooner we invest in innovative 

technologies and systems, the sooner 

we can reap the performance and 

economic rewards.
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Chapter 1: Introduction to the Innovative Building Technology Guide

The building industry plays a major role in regard to global energy consumption. Whether we live or 

work in buildings, they are essential to the global population. Innovative building technologies enable us 

to construct stronger, safer, and more efficient structures. Many of these technologies too often do not 

experience a high level of market adoption for a wide variety of reasons, however, including high upfront 

costs, low awareness levels, and a lack of knowledgeable and qualified professionals.

Evaluating Building Innovations (Economics, Feasibility, and Performance)

This document intends to provide a guideline for 

building owners/managers and design professionals 

to identify the “best fit” technology for a given 

purpose by comparing and analyzing them through 

three main evaluation criteria. The primary 

evaluation considerations identified in this guide 

are economic, feasibility, and performance. Study 

each consideration closely, because decisions that 

are made regarding innovative technologies have a 

significant effect for each consideration. Examining 

only one of these considerations can be detrimental 

to a project because it may compromise the needs 

and resources of another. For example, if a building 

owner is looking to upgrade the HVAC system and 

looks into only the performance characteristics of 

a technology, a decision made on that one analysis 

may result in going over budget or not being in 

compliance with local codes. In this case, the 

technology would most likely not be the “best fit.” 

Similarly, if the building owner looks only at the 

economic considerations of the equation, he or she 

may miss out on some significant performance characteristics that could ultimately provide savings, 

increased efficiency, and improved comfort and durability of the building. In either case, the need for 

evaluating technologies for each of the three primary evaluation considerations identified in this guide is 

essential to making the best decision for your project. 

For purposes of this guide, an economic analysis includes all costs associated with the technology 

and project. Financial considerations are often the driving factor in the decisionmaking process and 

extend far beyond the initial (first) cost of the technology. Other costs associated with a project include 

operation, maintenance, and replacement costs and expected or estimated savings (energy and cost). 

Other economic considerations that are likely to be impacted by integrating these technologies are 

increased value of the building and indirect cost or savings (those not immediately attributed to the 

technology but are affected by it). In addition to evaluating these costs, identify any potential funding 

sources and incentives available for specific technologies. One might be motivated to invest in a newer, 

more efficient technology if a certain government agency or group is providing financial support.

Feasibility pertains to how applicable a technology is for a given project. In many cases, feasibility 

considerations are accounted for automatically. Examining elements of feasibility helps a project in 

various ways including; maintaining a schedule, staying within budget, avoiding roadblocks, and quality 

assurance. Often times these considerations are “automatic” or “givens” that are not necessarily 

analyzed in depth. If you know you cannot displace an entire building of tenants for a long period of 

We have divided project management 

into four phases as a way of organizing 

some considerations you will want 

to take into account. Keep in mind, 

however, that you may need to 

revisit some of these considerations 

throughout the entire planning and 

construction process. For instance, 

during the implementation phase, you 

may become aware of an additional 

source of funding that will enable you 

to expand the scope of the project 

somewhat or you may learn of a new 

product or technology you would like to 

use and need to verify code compliance.
Innovative Building Technology Guide | 6

Chapter 1: Introduction to the Innovative Building Technology Guide

time, a deep retrofit is probably not possible. If a 

technology is not practical, you are not going to 

waste much time evaluating it. Not all feasibility 

considerations are automatic, however. In 

other cases, a more indepth look at the various 

characteristics of the project and technology is 

necessary to evaluate its practicality. Aspects of 

feasibility that should be considered for any project 

include; requirements from funding sources, local 

codes and ordinances, compatibility with existing 

building components, climate and geographic 

appropriateness, and availability of associated 

resources.

The third primary evaluation consideration—

performance—is tied directly to how effectively 

a technology will accomplish the objectives of 

the project. Performance is a broad category that 

encompasses different elements for different 

technologies and projects. Performance can be 

analyzed by evaluating technologies in regard 

to desired attributes, such as energy efficiency 

or disaster resistance. It can also be analyzed by 

type of building component, such as lighting or 

HVAC equipment. Evaluating a technology’s performance depends on primary goals and objectives 

identified at the beginning stages of the project. In addition to ensuring that you meet these objectives, 

a performance evaluation will provide a level of quality assurance and help save time and money in the 

long run by specifying a tested and certified technology.

Each of the three evaluation considerations alone is individually significant; however, to make sure the 

best choice is made, all three must be accounted for. A technology that fails to meet the requirements of 

only one of the criteria is not going to be the optimal choice for your project.

Starting Considerations and Project Context

Within the context of any given project, a variety of unique elements need to be taken into account 

when deciding whether to integrate a new technology into your building. These various elements can 

take on many different forms. In addition to the role the building plays in the project, existing systems 

and assemblies, site conditions and location, the anticipated scope of work, occupancy characteristics, 

and even billing structure (as it pertains to split incentives) all play significant roles in how a building will 

perform and be affected by new building technologies. Each of these various elements will determine 

whether a particular technology will properly fit into your project.

Keep in mind that most zoning 

ordinances distinguish among areas 

zoned for different types of residential 

occupancy. Among these types may 

be—

 Single-family homes.

 Multifamily buildings up to X 

units.

 Multifamily buildings with 

more than X units.

 Group homes.

Some jurisdictions are developing 

ordinances related to communal 

ownership of homes and the 

definition of family.
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Chapter 1: Introduction to the Innovative Building Technology Guide

For instance, a building owner who is looking to replace the old furnace and air-conditioner might 

immediately look into using heat pumps. If the electrical service is not large enough to handle the load in 

the winter, however, a heat pump is not a feasible option. Similarly, a building being occupied by senior 

citizens is probably not a prime candidate for a high-technology, interactive programmable thermostat. 

Each project will have its own unique set of characteristics that will need to be addressed and 

considered when determining whether a certain technology is feasible.

Why are these considerations important to your project?

Assume you are the general manager of a professional baseball team. It is your job to put together a 

team that will succeed on the field, while remaining under the constraints of the team budget or league 

salary cap. Building a winning team takes a lot more than 11 baseball players simply signing contracts. 

Players specialize in different positions, excel at different aspects of the game, and provide a variety of 

different characteristics. To effectively do your job, it is critical to consider all these different elements 

when piecing the team together. You will probably also want to consult with all the members of your 

staff who can provide unique knowledge and perspectives on the different players you are considering. 

Together, you can best piece your team together based on your needs, your budget, your fan base, your 

opponents, and many other elements that will ultimately define your success. By considering all these 

different elements during the off-season, you are more likely to avoid, or at least minimize, the effect of 

potential issues (slumps, injuries, and so on) that could lead to an unsuccessful season.

Just as with a baseball team, a number of different elements affect a building. As stated previously, 

these elements can be within the building or can be related to the whole building makeup. Identifying all 

the various characteristics associated with your building and using them to evaluate the applicability of 

Example: Replacing HVAC

The building owner has planned to replace four centrally metered heat pumps in a 12-unit 

apartment building with dedicated high-efficiency minisplit heat pumps for each apartment. The 

units were ordered as soon as construction got under way so they would be on site in time for 

prompt installation. When the electrician began his rewiring work for the project, he reviewed 

the electrical specifications for the new HVAC equipment and realized that the current 60 amp 

electrical service feeding each apartment was not adequate to power the new heat pumps. 

This problem delays construction while the design team and building owner decide whether to 

upgrade all the electrical entrances or redesign the HVAC system. 

Lesson Learned: Interference of the project schedule nearly always entails higher costs and 

impact on the budget. Therefore, in the very early stages of project planning, the building owner 

should have considered all relevant elements related to feasibility to ensure that the decisions 

he made were practical, reasonable, and doable. If the building owner had consulted electrician 

regarding the innovative HVAC technology, the conflict with the existing electrical services 

probably would have been discovered much sooner. In addition to construction delays and 

unexpected higher costs, decisions made in haste are often not as carefully considered.
Innovative Building Technology Guide | 8

Chapter 1: Introduction to the Innovative Building Technology Guide

an innovative building technology are enormously beneficial actions for you as a decisionmaker. 

Considering these elements can help you identify, early in the process, those technologies that will be 

viable options for your project. It is important to have all the trades who will be involved in the 

installation of a new technology review the specifications well ahead of procurement and installation. In 

addition to your design professional(s) and contractor(s), personnel from facilities and maintenance, 

security, resident life, healthcare services, and others on the building staff will have different 

perspectives regarding elements that may make a particular technology a good, impractical, or 

unsuitable choice. After you have identified your constraints and requirements, you can begin evaluating 

these technologies on a higher level with regard to economics, feasibility, and performance. The 

following table outlines some benefits of identifying and analyzing the specific characteristics related to 

your building.

Questions To Ask

Depending on the main objectives of your project and the specific characteristics of your building, 

you can ask a number of different questions to help identify the constraints and requirements when 

integrating new building technologies. These questions will vary in regard to the specifics of your 

project. Often, one question can lead to another, and can help guide you through a filtering process.

The following are some different types of feasibility considerations that may be applicable to your 

project. These questions will be important to ask yourself, your design professionals, your builder, the 

local code official, or your HUD point of contact.
Innovative Building Technology Guide | 9

Chapter 1: Introduction to the Innovative Building Technology Guide
Innovative Building Technology Guide | 10

Chapter 2: Economic Considerations

Chapter 2. Economic Considerations

Economic Top 5

1. What do you want to do and what do you have to do?

2. What is your budget?

3. Compare options with equal performance to optimize costs.

4. Choose an analysis method that will give you an accurate look at all the costs and benefits.

5. Keep in mind that many innovations have a cost and value beyond the initial purchase.

Introduction

We are all aware of the importance of cost 

when making any investment. Regardless 

of the product or service, cost is certainly 

something that all of us consider. These 

economic considerations are especially 

important in regard to innovative 

technologies for your construction or 

renovation project. They are likely to be 

central to your decisionmaking process. 

Although facility needs or funding 

opportunities may be the initial driver to 

actually get a project’s conceptual and 

planning phases rolling, usually it is the 

project budget that frames the boundaries 

and overall scope. Throughout the planning 

and design phases, it is likely that you will 

move back and forth between performance goals, feasibility considerations, and economic analysis, 

often in multiple iterations related to any one technology or a set of technologies. Sometimes something 

that may seem impractical economically at the first pass can be refined or revised so that both the 

advantages offered by the technology and its economic cost fit both the project goals and the budget.

Let us start with a basic example of how you might incorporate an economic analysis in a project: the 

architect for your new housing project suggests using spray foam insulation for the exterior walls. After 

contacting an insulation contractor you learn it will cost three times as much as fiberglass and twice 

that of dense packed cellulose. Even factoring in the added benefits (thermal performance, improved 

air sealing, and moisture resistance) the cost simply will not fit in your budget. Although you know you 

cannot afford the upgrade, you still have a desire for some high-performance characteristics associated 

with the spray foam. Your insulation contractor suggests blowing one inch of spray foam against the 

structural sheathing and filling the rest of the cavity with a lower cost insulation material to achieve 

the code-required levels. This compromise adequately addresses your economic and performance 

considerations.
Innovative Building Technology Guide | 11

Chapter 2: Economic Considerations

Building owners, managers, and decisionmakers need to understand that, although performing an 

economic analysis is a critical element to 

decisionmaking, it is directly tied to other 

evaluation tools. Performance analysis is 

necessary to identify the benefits of different 

products and systems and value them 

accordingly. Feasibility analysis is also critical to 

an economic analysis. If a particular technology 

is not well suited to your climate, an economic 

analysis of these alternatives would be 

irrelevant.

To ensure that your economic projections are as 

accurate as possible early in the decisionmaking 

process, make sure you obtain pricing estimates 

that are as accurate as possible. If you have 

a contractor and subcontractors on board, request cost estimates from them because they will be 

performing the work and are likely to have the most realistic cost information. If you are still looking 

for a contractor, be sure to get multiple estimates. Vetting multiple contractors will give you assurance 

that the pricing is fair and reasonable. Always obtain several references for a similar type and scope of 

work before selecting a contractor. Keep an eye out for potential conflicts of interest—for instance, a 

contractor who tells you that you must replace the 

windows in your building and is a distributor for a 

particular window manufacturer has a conflict of 

interest.

As will become evident in the discussion of 

different types of economic analysis, the evaluation 

will usually involve comparisons. You often will 

be comparing different technology options and 

weighing performance characteristics, the extent of 

feasibility, and economic costs and savings.

As with the overall project, economic 

decisionmaking on building innovations are broken 

down into four major project phases. These phases 

are intended to outline the thought process for 

adopting and analyzing innovations from an 

economic point of view, starting with deciding 

what is required for the project, proceeding to determining the size and extent of the project, choosing 

a method and conducting a thorough economic analysis, and finally considering costs that will affect the 

building owner or operator beyond the implementation of the innovation.

How To Identify Reliable Sources of 

Information:

 Recommendation is from a 

trusted source.

 Recommendation is from your 

design professional.

 Recommendation is from an 

independent third party source.

 User review trends are positive
Innovative Building Technology Guide | 12

Chapter 2: Economic Considerations
Conceptual Phase

Innovative Building Technology Guide | 13

Chapter 2: Economic Considerations

Conceptual Phase—Funding Sources 

and Incentives

Economic considerations in the conceptual phase 

mostly revolve around how the funding for the 

project is allocated, and what requirements are tied 

to that allocation. The funding source will often 

have specific requirements, and may be targeted for 

a specific purpose, or may be more general. For 

example, a project funded by a nonprofit elderly 

advocacy organization might be targeted at 

technologies to allow for aging in place. During the 

conceptual phase, clearly defining the source (or 

sources of funding), what that funding can be used 

for, and what must be achieved by the funding will 

help identify what innovations can be included in a 

project. The following chart outlines key questions 

that will help categorize the funding and drive 

characterization of the options for using the 

funding.

An apartment building might be renovated for specific reasons, such as improvements to outdated 

ventilation systems in the building for the purpose of limiting building owner liability. Conversely, a 

general pool of funding may be available for building improvements each year, and the building owner 

may look for what incentives make a specific improvement economically viable.
Conceptual Phase

Innovative Building Technology Guide | 14

Chapter 2: Economic Considerations

Funding Sources

A funding opportunity may often be the initial driver 

that moves your project into the conceptual and design 

phase. Agencies such as HUD or the U.S. Department of 

Energy (DOE) may award grants and financial support for 

projects that help encourage more widespread adoption 

of innovative technologies and energy-efficient practices. 

Often such awards may be tied to requirements to meet a 

higher standard of performance or include products that 

carry a particular designation—examples being ENERGY 

STAR, WaterSense, or Federal Energy Management 

Program (FEMP)-Designated certifications. It is important 

to identify the program or grant requirements and include 

them in your key analysis from the beginning, because 

they will need to be addressed throughout the project.

Incentives

When considering the initial cost of a technology, be sure 

to investigate any incentives or rebates that may be 

available. Innovative technologies are often given a boost 

by federal, state, and local governments or utility 

companies when these entities perceive an overall advantage to getting the technology more widely 

adopted in the marketplace. These incentives are certainly available with renewable technologies but 

may also hold true with other technologies, such as lighting, high-efficiency equipment and appliances, 

and energy retrofits. As they roll out new products, manufacturers may give discounted pricing on 

certain items. A good place to start your search for available incentives is www.dsireusa.com. DOE’s 

website, www.energy.gov, also provides a list of available incentives for each state.

Incentive programs are widely varied of on multiple levels. For 

example, in the state of Maryland, Baltimore Gas and Electric 

(BGE) offers a variety of discounts and rebates to increase energy 

efficiency in homes and buildings through its Smart Energy Savers 

Program. If your project includes replacing and upgrading your 

HVAC equipment, the program offers up to $900 in rebates for 

ENERGY STAR-certified heating and cooling equipment. Similar 

incentives are available for a variety of other building components. 

These incentives not only help offset the initial cost of a project but 

also will begin paying for themselves through the savings achieved 

after they are installed. Remember to check with your local utility 

company to see what it offers.

Make sure you are very familiar 

with the funding structure and 

program requirements that apply 

to your project. Depending on 

the specific program—whether it 

is one of HUD’s many programs, 

a grant using a state or national 

program, or tax credits through the 

Internal Revenue Service, specific 

requirements will apply regarding 

eligible costs, allowable rents, 

timeline if repayment is required, 

and a host of other guidelines. 

This process can be especially 

complicated if you are leveraging 

funds through multiple sources.

Most HUD-subsidized 

housing will be eligible 

for weatherization 

assistance at low or no 

cost. Check out what 

weatherization services 

may be available for 

your property.
Conceptual Phase

Innovative Building Technology Guide | 15

Chapter 2: Economic Considerations

Reserve Funds

Many HUD grants, mortgages, or insured funds carry a requirement that a reserve fund be established 

to defray future replacement costs. The building owner makes monthly contributions to the reserve 

fund to offset the replacement of equipment, major appliances, and other major repairs/replacements 

such as roofs, sewer lines, and plumbing fixtures. Minor repairs, such as interior painting, are usually 

not eligible for use of these funds. HUD will usually maintain control over the fund and issue approvals 

for withdrawal on a case-by-case basis. HUD will also make recommendations regarding the amount of 

monthly contribution based on the age, condition, size, and location of the building.

If you have received funding from HUD or another government agency to initiate a project, inquire about 

any requirements for and regulations regarding reserve funds. Even if an agency does not require that 

you set up a reserve fund, setting up your own fund to help cover future replacements, anticipated 

or not, would be an important thing to do. The reserve fund provides at least a partial safety net to 

respond quickly to building needs.

The Split Incentive Problem

Split incentives arise when the “investor” and the “beneficiary” of the investment are split between 

different parties. Regarding rental housing and energy-efficient technologies, this situation can arise 

in a number of ways. If the building owner pays the utility expenses for the tenants, the tenant has 

little incentive to monitor or reduce his/her energy consumption. He/she is probably not even aware of 

magnitude of the energy bills for his/her apartment. The building owner has little incentive to invest in 

more efficient equipment, appliances, or efficiency upgrades because of the uncertainty regarding the 

savings he will actually realize. The tenant still controls the thermostat, lights, windows (open or closed), 

and so on.

When the tenant pays the utility bills, they have little incentive to make energy improvements because 

they do not own the building. It is likely that they will not live in the building long enough to see a return 

on any investment via monthly bill reductions. The building owner similarly has no incentive to upgrade 

aging equipment or make other energy improvements like better windows or air sealing because he/she 

will not recognize the direct benefit of lower monthly bills.

Types of available funding may also give rise to split incentives. Often an agency such as HUD will 

provide support to low and moderate-income tenants for a portion of their utility expenses. It may be 

a percentage or a flat amount per month. Public housing owners are also usually limited in the rents 

they can charge (for example, no more than X percent of monthly income). In each case, such a funding 

structure is likely to discourage energy conservation and energy-efficiency upgrades.

Split Incentive Solutions

Although solving the split incentive issue has no one-size-fits-all approach, several examples provide 

common ways to address it. One such approach is a “green lease,” which can take a number of forms. 

For example, an agreement may be made between the building owner and tenant stating that the owner 

would make energy improvements (upgrading HVAC equipment) and the tenant would agree to operate 

the equipment within certain restrictions (maintaining minimum and maximum thermostat settings). 

For situations in which the tenant pays the utility bills, another possibility might be to permit an increase 

in rent based on anticipated energy savings. The owner would recoup some of his investment through 

higher rent, but the tenant would realize a net savings because of lower monthly bills. The increased rent 

is typically no more than 80 percent of the predicted savings to protect against underperformance. See 

http://daily.sightline.org/2009/04/27/split-incentive-stalls-energy-efficiency-in-rental-housing/.
Conceptual Phase

Innovative Building Technology Guide | 16

Chapter 2: Economic Considerations

Another option might be for the owner/landlord to pay up to a certain amount for utility expenses. If a 

tenant exceeded that amount, they would either make up the difference or incur a penalty. Neither one 

of these options comes without some issues to overcome. In the case of an existing building, 

determining some type of initial energy use benchmark is required to determine the savings achieved. 

It would likely be necessary to continue to monitor energy consumption, preferably on a unit-by-unit 

basis.

Although these agreements are all possible ways of 

helping to solve the problem of split-incentives, a 

critical component to all of this discussion is tenant 

education. Tenants need to be informed on certain 

operational guidelines, such as setting desired maximum 

and minimum thermostat settings, turning out lights in 

unoccupied rooms, and operating windows properly. 

Energy monitors may be an option, but tenants will have 

to be shown how to use them and what the readout 

means. Again, some form of energy monitoring is 

recommended to be able to verify energy use on a per 

unit basis. It is also likely that building staff will need to 

perform periodic checks to ensure tenants are following 

the recommendations and to reinforce conservation 

measures.
Innovative Building Technology Guide | 17

Chapter 2: Economic Considerations

Scoping Phase

Scoping Phase—Budget Priorities

After exploring and understanding the requirements tied to the funding source for the project, the next 

step is to move on to the scoping phase, identifying budget priorities within the project and exploring 

what innovations can fit within those budget priorities. The following steps describe, at a high level, the 

process for determining budget priorities:

General Steps Example—New Building

Step 1—Determine general budget size and 

flexibility.

Step 1—Budget sized for construction of new 

three-story apartment building with 20 units and 

a management office.

Step 2—Identify “must-have” expenses needed to 

achieve goals of the project within the limitations 

set in the conceptual phase.

Step 2—All construction items required by local 

code and by funding source for desired size of 

building estimated. For example the project 

requires 100-percent-accessible units because of 

funding source requirement. 

Step 3—Identify “want-to-have” items that will 

help make the project a success.

Step 3—The building manager wants to cut 

energy costs and therefore will use innovative 

construction details to limit air leakage and will 

add ultra-efficient HVAC units.

Step 4—Identify any auxiliary expenses that 

become necessary because of “must-have” or 

“want-to-have” expenses.

Step 4—Because of building air leakage 

reduction, increased ventilation is a necessary 

auxiliary cost.

Step 5—Identify which expenses will have an 

immediate savings impact on the budget through 

optimization, incentives, or other means.

Step 5—Lower heating and cooling needs 

because of reduced air leakage allows for 

smaller, less expensive HVAC units, creating an 

immediate cost benefit and allowing for budget 

flexibility for other building attributes.
Innovative Building Technology Guide | 18

Chapter 2: Economic Considerations

Design Phase

Design Phase—Cost/Benefit Analysis and Optimization

Building owners, managers, and decisionmakers can use 

a number of different methods to perform an economic 

analysis that range from very simple to very complex. 

The type of analysis performed varies relative to the 

desired measure, product or system, and end use. For 

example, when debating between two types of airconditioning units, a building owner could perform a 

simple cost-benefit analysis, such as payback period, and 

get a relatively useful comparison for making a decision. 

By contrast, if a building is in its initial design phase 

or undergoing an extensive retrofit, a more complex 

economic analysis, such as a life-cycle cost analysis or 

value engineering (VE) approach, would provide a more 

relevant measure of comparison for project alternatives. 

In the case of some innovations without clear paybacks, 

first cost, or value, may also be the main driver for 

decisionmaking.

Depending on the complexity necessary to perform an 

economic analysis, you may want to consider hiring an 

outside consultant to assist with this analysis. An energy analysis regarding annual energy consumption 

may require the use of specialized software to gain a reasonably accurate picture of the costs and 

savings associated with different technologies. After the building characteristics are entered, it is then 

fairly simple to enter different levels of insulation or equipment efficiencies and optimize first costs 

versus long-term savings. As demonstrated in the graphic that follows, the rigor of the economic analysis 

may be driven by factors such as the size of the project or the lifetime of a project. For example, an 

innovation that provides both high-performance insulation and structural durability might be better 

analyzed using a lifecycle cost. Such an innovation is likely a large project, and the innovation lifetime 

likely matches the life of the building. Conversely, replacing toilets with low-flow fixtures may be an 

easier decision. Simple payback based on reduced water use might give a less comprehensive answer 

than lifecycle analysis, but may be more appropriate for a low-cost project.
Innovative Building Technology Guide | 19

Chapter 2: Economic Considerations

Design Phase

You may want to look at several different types of 

economic analysis. This section deals with relatively 

simple methods to more complex forms of analysis. 

Of course, keep in mind any particular economic 

requirements that the funding source may have, such 

as a payback of no more than X years. These limits may 

be identified in the conceptual phase.

First Cost/Initial Cost

The first (or initial) costs include those incurred 

during the design and construction phase of a 

project. Considering first costs is the simplest form 

of economic analysis. Product X has a price tag $500 

less than product Y. Choosing Product X on this basis 

would be using first cost to drive your economic 

decisionmaking.

For most building projects, this analysis will entail 

a number of components including architect/

engineering fees, product/material costs, and labor/

installation costs.

Although technology costs will certainly need to fit 

within your overall project budget, be sure to look 

ahead at how that technology or set of technologies 

may impact the total operating costs of your building 

over time. For instance, an energy-efficiency package 

to achieve 30 to 40 percent above code minimum may 

cost approximately 15 to 20 percent more than the 

standard package. Using a more complex economic 

analysis than first costs, however, such as considering 

the monthly savings, may alter the economic outlook 

for an innovation.

Another consideration in first cost is comparing the 

first cost at initial construction with a renovation cost. 

Keep in mind the possibility to install the capacity for 

a certain functionality to be achieved at a later date. 

For instance, although you might decide not to install 

grab bars in tubs now, the blocking and support can be 

installed inexpensively to provide easier retrofit in the 

future.

First cost may be the most appropriate economic 

analysis at times. These decisions may be driven by an 

immediate need to repair or replace items in a building 

while having limited flexibility. For example, if a water 

heater breaks and a building owner must restore 

domestic hot water service to tenants quickly, but they 

have a limited and inflexible budget for the remainder 

Case Studies

It Costs Less....for Now

In a low-income housing renovation 

program, the decision was made to 

replace an aging furnace with electric 

strip heat because it was the least 

expensive option. As it turned out, a 

resident could not afford the monthly 

electric costs associated with using 

the electric heat. So, she used the 

gas range instead. This option may 

or may not have been an actual cost 

saver for the resident, but it certainly 

posed health and safety concerns. In 

addition, the cost of the electric strip 

was lost because the technology was 

not used.

Renovations to a senior citizen 

housing development included 

replacing windows. The facility 

manager decided to go with the 

lower priced window that still had the 

same thermal performance as higher 

priced windows. The windows were 

so difficult to open that the residents 

could not operate them.

Lesson Learned

The Dangers of Initial 

Cost

It is often tempting to let the first cost 

of a technology take priority in your 

considerations. Making a decision 

solely based on upfront cost, however, 

is not necessarily the best strategy.
Innovative Building Technology Guide | 20

Chapter 2: Economic Considerations

Design Phase

of the year, they may be forced to choose a water heater based on first cost as budget permits, despite 

the fact that a more innovative unit might be overall more cost effective when considered on a lifecyclecost basis. Another time might be when choosing between two objects of equal performance. For 

example, if a building owner has to replace a doorknob on an exterior door and must choose between 

two doorknobs of equal durability and functionality, making that choice based on first cost may be the 

most reasonable analysis.

Simple Payback

The payback period is a useful and simple tool for evaluating the cost-benefit of a certain project 

and can be easily calculated and understood by most users, depending on the technology. Regarding 

buildings and building systems, simple payback is generally used for smaller, less costly projects (such 

as lighting improvements) and simple equipment comparisons (such as air-conditioner units and 

appliances). The simple payback method does not account for various financial parameters, such as 

inflation, discount rates, and net present value.

Because innovative products tend to have a higher initial cost than conventional ones, users need to be 

able to determine the amount of time it will take for an investment to pay for itself. Calculating the 

payback period for a product or building system can determine, with relative accuracy, at what point the 

savings accrued from an investment will cover the purchase price. Although simple payback does not 

account for more complex financial variables, such as inflation, discount rate, and net present value, it 

does provide one perspective for economic evaluation. The annual savings and life expectancy for a 

product or system need to be determined before the simple payback calculation can be performed. The 

example that follows shows how you could use a payback calculation for a lighting project.

Simple Payback = Initial Incremental Cost / Annual Savings

 Annual electricity savings = (daily hours x 365 days/year) x watts saved x cost

 For example, if a 100-watt incandescent bulb is replaced with a 25-watt compact 

fluorescent lamp (CFL) bulb, the savings would be—

 Annual electricity savings = [(6 hours/day x 365 days/year) x (100 – 25 watts)]/1,000 

Wh/kWh = 164 kWh/year.

 Assuming $0.08/kWh, the annual savings realized with the CFL bulb is $13.14.

To calculate the payback, assume that the 25-watt CFL used in this example costs $15.00 and 

a standard bulb costs $3.00. Using the simple payback calculation we can determine that the 

payback period for this product will be:

Simple payback = $12.00 / $13.14 = 0.9 years
Innovative Building Technology Guide | 21

Chapter 2: Economic Considerations

Design Phase

These simple examples leave out a lot of elements that 

are likely to impact your investment. Factors such the 

escalation rate of energy prices, the inflation rate of the 

value of money, and maintenance costs are not included 

in a simple payback calculation. It also does not take into 

account the nonmonetary value you receive from the more 

efficient technology. For certain technologies, however, 

this method is easy to calculate and can provide a relevant 

measure for economic analysis.

Advantages Disadvantages

Easy to calculate Limited in its application

Can incorporate range of 

complexity depending on 

economic elements included, 

such as maintenance costs, 

changes in energy prices, 

inflation, or discount rate

Not well suited to 

complex measures in 

which costs and savings 

vary in magnitude and 

timing

Snapshot of cost effectiveness 

of technology

Very limited as a means 

for evaluating the total 

value or as a measure or 

technology

Savings-to-Investment Ratio

The Savings-to-Investment Ratio (SIR) is the inverse of 

simple payback; for example, it is equal to the cost of the 

measure(s)/the anticipated $ savings (over its useful life). In 

this method, the higher the number is, the more attractive 

the technology is. A SIR of 1.0 is the breakeven point at 

which the investment pays for itself through the realized 

savings. An SIR score of more than 1.0 will result in a 

positive return on your investment over time.

Monthly Cashflow

Cashflow is often preferred over simple payback for energy-efficiency investments because payback is 

irrelevant for projects that must be financed over time. Using monthly cashflow can better determine 

the value of an investment for several reasons. Oftentimes cashflows are irregular, especially in regard to 

energy-efficiency investments because savings can vary from month to month.

Using a monthly cashflow analysis provides a more relevant evaluation of the financial status of the 

building over time. Furthermore, the payback analysis does not account for cashflow beyond the 

investment payoff. Again, using a monthly cashflow analysis gives a more accurate picture of projected 

expenses and savings. A cashflow method also enables you to adjust for fluctuating interest and utility 

rates and include estimated maintenance costs. What can appear as a large initial investment often looks 

more manageable and attractive when you consider it from the more realistic perspective of actual 

cashflow. In its most basic form, calculating monthly cashflow involves identifying and summing all the 

savings and expenses associated with a particular technology or a set of technologies over a certain 

period of time. Consider the following real-life example of a group home in Washington, D.C.

Cashflow Calculators

Many user-friendly online 

tools will help you perform a 

cashflow analysis. ENERGY STAR 

provides a Cashflow Opportunity 

Calculator that helps guide 

financial decisions regarding 

energy-efficiency projects and 

that addresses the “we don’t 

have the money” objections 

that many organizations face. 

The calculator quantifies the 

costs associated with the project 

(initial investment, expected 

savings, interest and utility rates, 

and so on) and helps translate 

energy savings into monetary 

savings. In addition to providing 

financial information for the 

current project, the calculator 

also evaluates the potential 

for making additional energyefficient improvements based on 

the anticipated savings.
Innovative Building Technology Guide | 22

Chapter 2: Economic Considerations

Design Phase

Case Study: Washington, D.C. Youth Group Home

A group home for at-risk youths, in Washington, D.C., received funding from several 

public and private sources to upgrade the building’s aging equipment and appliances 

and to make other energy-efficiency improvements as the budget permitted. The 4,400 

ft2 home, constructed in 1900, had six bedrooms, five bathrooms, three offices, three 

recreational areas, and one kitchen. The home had eight residents and as many as five 

staff people, some of whom prepared meals three times per day. Annual utility costs 

(paid by the building owner) for the all-electric home were more than $11,000.

An energy consultant modeled the building, estimating the magnitude of expected 

savings from the equipment and appliance replacement and prioritizing other 

improvements with the remaining funds. In addition to replacing two air-source heat 

pumps, two water heaters, and all the appliances, the modeling identified a number of 

other measures (air sealing, windows, lighting, and low-flow plumbing appliances) that 

were the most cost effective. The incremental cost for these upgrades was $22,700. 

(Where applicable, the incremental cost is the cost difference between minimumefficiency equipment and ENERGY STAR or higher performing equipment.) The first year 

of utility bills revealed enormous energy and dollar savings—more than 36,000 kWh 

amounting to approximately $4,700 at $0.13/kWh. The payback period was very good, at 

slightly less than five years; from a monthly cashflow standpoint, however, it looked even 

more attractive.

If the building owner had not had funding and had needed to borrow the money to do 

this work, he would also have had to calculated interest costs. At an interest rate of 4.5 

percent over 10 years, monthly payments would have been $235, including principal and 

interest. With average monthly energy savings amounting to $392, the monthly payment 

on the loan would have been 40 percent less than the monthly savings on the utility bill. 

From another perspective, before the upgrade the average monthly utility payments 

were $916. After completing the upgrade, the average monthly utility costs plus monthly 

loan and interest payments would have equaled $759 or a 17 percent reduction in the 

first month. Keep in mind that utility bills, and therefore, realized savings will vary from 

month to month, primarily depending on need for space heating or cooling. The analysis 

showed this decision to be the right one.
Innovative Building Technology Guide | 23

Chapter 2: Economic Considerations

Design Phase

Life-Cycle Cost Analysis

Life-cycle cost analysis (LCCA) is a more complex analysis method that incorporates a variety of 

economic factors. LCCA looks at the costs of a building or building system over its entire life and can 

be used as a tool to compare multiple options. It incorporates all the costs of owning, operating, 

maintaining, and disposing of the building or system in question. LCCA can be used when making small 

decisions, such as choosing one type of air-conditioning unit over another, or large decisions, such as 

determining which building design will result in higher performance and greater energy efficiency. 

Building or system costs generally fall into the following categories:

LCCA can get very complex and require significant research, especially if you start delving into 

intangibles such as carbon emissions or depletion of natural resources. It is a valuable method of 

economic evaluation for building technologies, however, because it helps the building owner look 

beyond initial cost. Even if the dollar amounts attached to certain elements such as disposal costs are 

estimates, a basic LCCA enables you to view each type of cost as a percentage of the whole. Very often, 

the initial cost of a technology or whole building is a relatively small percentage of the total cost when 

compared with operation and maintenance costs. Products with greater durability will have a lower 

replacement frequency. In many cases, differences in replacement costs can outweigh differences in 

first cost when using LCCA.

Estimating costs associated with each phase can be helpful to gain a perspective of the total cost. 

Such an exercise can also be helpful in making the general decision of whether to take action. Costs 

associated with doing nothing may also be an option.
Innovative Building Technology Guide | 24

Chapter 2: Economic Considerations

Design Phase

Value Engineering and Optimization

In addition to the cost/benefit analysis methods discussed previously, that works well in construction 

for both controlling costs and optimizing performance is value engineering. VE is a systematic and 

structured approach designed to optimize value (initial value and long-term investment) and improve 

projects, products, and processes. VE can be used with any economic analysis method listed previously; 

it has been used in the construction industry for many years and has proven to be an effective method 

for evaluating and improving economic costs and building performance. The VE approach analyzes the 

requirements of a project to achieve the desired function at the lowest total cost over the lifetime of the 

project. Identifying several approaches and analyzing them based on identified criteria relevant to the 

project often achieves tremendous savings, in initial and life-cycle costs.

The value of a particular technology or measure may be either quantitative or qualitative, or a 

combination of both. For instance, energy-efficiency measures will have a quantifiable value in terms of 

operating cost savings, but will also have qualitative value in terms of greater comfort, reduced potential 

for damage because of moisture or condensation issues (which also carries quantitative effects in terms 

of repair), and improved indoor air quality. For energy efficiency, quantitative value can be either direct 
Innovative Building Technology Guide | 25

Chapter 2: Economic Considerations

Design Phase

and immediate (cost savings), or indirect and long term. 

Examples of the latter are the resale value of the 

building, including its desirability to potential future 

buyers and the hedge it provides against rising utility 

rates. Both of these qualitative values are hard to predict 

and make it difficult to define the precise economic 

value. When considering innovative technologies, 

however, be sure to think beyond the time you expect to 

own the building; value can be realized even if you do 

not realize it personally.

Some measures may provide solely qualitative benefits 

that you deem important to provide improved livability 

and amenities for your anticipated residents. For 

instance, it may be very important to you to provide both 

indoor and outdoor gathering spaces so that residents 

can socialize. Whole building or apartment mechanical 

ventilation may hold particular value for occupants that 

may be more prone to smoking in their dwelling units.

VE should not be thought of as merely a cost-cutting 

endeavor. The goal of performing VE analyses is to 

ensure that the decision you make is the most efficient 

and that alternative ways of attaining your desired 

goals or functionality at a lower cost are not always 

viable. Using VE, you may be able to include additional 

technologies or amenities through the savings you 

achieve in another area.

Including VE analysis during the initial conceptual 

phase may be beneficial. The building owner or manager is in the best position to identify the needs or 

required functionality for your project. If you are renovating or adding on to an existing building, this 

process may start by identifying what is not working.

Some initial questions to ask about the requirements of your project include—

1. What are the inadequacies of your current building (or of other buildings previously owned)?

2. What systems do you want to improve/upgrade?

3. What types of functionality do you need, given the nature of the residents? (For example, space that 

is compliant with the Americans with Disabilities Act, or ADA; indoor community space; outdoor 

community space; and central food-preparation and dining areas.)

4. Which do you prefer—central or distributed utilities? Is one more feasible than the other

Economic considerations will 

change, depending on the 

context of your project. For 

example, think about the ways 

in which you place value on 

measures that improve energy 

efficiency, improve the security 

of your building and occupants, 

or reduce vulnerability to natural 

disasters. Each measure will 

have quantitative and qualitative 

elements. The importance 

of an investment in security 

measures, such as lighting, locks, 

and cameras, may far outweigh 

savings related to energy 

efficiency. Regarding security and 

natural disasters, the risk of loss 

of financial property or human 

life is likely to hold greater 

weight compared with the initial 

monetary investment in the 

measure.
Innovative Building Technology Guide | 26

Chapter 2: Economic Considerations

Design Phase

Incorporating a VE approach at the design or conceptual phase of a project generally involves the use of 

a VE workshop. The workshop provides an opportunity to bring the design team and the building owner 

together to establish the scope of the project. This workshop can help identify the owner’s definition of 

value relating to the project, all potential design solutions, cost estimating, scheduling, and approach.

A formal VE approach has five key steps:

Although your design team may certainly perform VE as part of the design process, it can be beneficial 

to have an additional VE effort beyond only your architect and engineer. Professional VE consultants 

are often hired for very large and complex construction projects, in most cases, they are not likely to be 

needed or realistic for public housing projects. Assemble the varied expertise on your team to review 

the design and specifications as they are developed. This workshop is not intended to be a criticism 

of the design, but rather an effort for those with experience in a particular area to offer informed 

suggestions for improvement in function or reduction in cost. Keep in mind that VE is not simply cost 

cutting, but rather an effort to obtain equal or greater value for equivalent or reduced dollars spent.
Innovative Building Technology Guide | 27

Chapter 2: Economic Considerations

Implementation Phase

Implementation Phase—Operational and Maintenance Costs

After installing a building innovation or constructing a 

building using innovative technologies, other economic 

considerations appear as these innovations are used. In 

the implementation phase of an innovation, economic 

issues can have a major impact on whether adopting 

the innovation was a good choice. The major economic 

considerations during the implementation phase are—

• Financing and interest costs.

• Operating costs.

• Maintenance costs.

• Replacement costs.

For the economic analysis during the design phase, you 

may have chosen to simply analyze the first costs for your 

decisionmaking process. If so, you should still be aware of 

the costs you will encounter during the implementation 

phase. If the design phase included any payback or 

lifecycle cost analyses, it is likely you have already 

considered at least some of these costs.

Financing and Interest Costs 

For any money that you plan to borrow, you must include the associated financing costs. In addition 

to interest rates, the cost may include application fees, credit check fees, and points paid. Interest is 

the largest piece because it adds up to a significant amount over 30 years. For instance, a 30-year loan 

for $400,000 at a 4.5-percent interest rate will accrue total interest payments of nearly $330,000, 

approaching the amount you borrowed.

Depending on the amount of money you need to borrow and what you need it for, multiple different 

types of loan packages may be available. Exactly as you are likely to obtain multiple bids or proposals 

from several general contractors, it is wise to talk with several banks or mortgage institutions to learn 

about the different types of loan packages they can offer. They will be glad to calculate the costs 

associated with each over the life of the loan. Be sure to investigate any penalties you might incur, such 

as fees for late payments or early loan payoff.

Online mortgage calculators are readily available, designed to be easy to use and comprehend. Analysis 

on financing and interest costs is taken into account for any lifecycle cost analysis.

Operating Costs

Commonly considered operating costs are the utility costs associated with operating your building or 

perhaps the actual technology. For instance, the insulation, windows, and HVAC equipment will all affect 

the heating and cooling costs for your building. These costs are not at all insignificant as many of these 

systems will be around for a long time. For example, if the building is still functional the insulation and 

windows may be functional; and the HVAC equipment is likely to have a 15- to 20-year lifespan. So, as 

you consider annual operating cost, be sure to multiply it by the expected life of the technology you are 

considering.
Innovative Building Technology Guide | 28

Chapter 2: Economic Considerations

Implementation Phase

For all public and assisted housing, especially 

multifamily buildings, safety and security are 

concerns that can impact operating costs. For 

instance, both indoor and outdoor lighting must be 

designed to ensure the safety of the residents and 

deter unwanted intruders. To avoid high electrical 

costs associated with lighting in common areas, 

corridors, and stairways it may be a wise economic 

decision to not only invest in more efficient lighting 

technologies, such as LEDs (light emitting diodes), 

but also advanced innovative control systems. 

Such controls can range from motion sensors and 

astronomical time clocks to Wi-Fi automation 

that enables you to program and control all the 

lighting for your building from a central location or 

remotely. Such an investment may mean greater 

savings in operating your building over many years, 

thereby offsetting the higher initial cost. The safety 

and security of the residents and the actual building 

are enhanced as well.

Nonenergy operating should also be considered. 

An example of this approach would be a security 

system that requires remote monitoring. The actual 

system has an initial cost, but it also includes a 

monthly expense to keep the technology effective.

As you consider operating costs, be sure to 

investigate different metering strategies and 

time-of-use plans offered by your utility. Such 

plans may offer economic advantages and warrant 

consideration of slightly different types or sizes 

of equipment to find the best-fit solution for your 

project.

Maintenance/Repair Costs

Maintenance costs required for the technology 

may be a little bit difficult to accurately predict, 

but these costs is certainly closely connected to 

your performance considerations. Talking with 

others who have used the technology is a good way 

to gauge the amount and type of maintenance it 

may require and understand how reliable it is. This 

assessment is also a good time to obtain input from 

your maintenance staff. Although they may not 

have experience with the exact technology, they 

may be familiar with its internal components, motors, 

or other similar technologies.

Case Study

Can You Fix It?

A builder constructing a new building 

decided on an innovative, energyefficient water heater for his project. 

Economic analysis showed the energy 

savings from the water heater would pay 

for the increased cost of the heater over 

a more conventional, inefficient unit.

Several years later, the unit needed a 

repair, but the building owner could not 

find any local contractors who would 

work on this particular unit. The cost of 

having a nonlocal company complete the 

repair was prohibitive.

The availability of a workforce and the 

ability to maintain technology often 

factors into the overall economic impact 

of an innovation. Although the initial 

assessment of energy savings as an 

economic decision point was a good 

approach, the builder failed to account 

for higher future costs resulting from the 

lack of local qualified repair contractors.

Lesson Learned

Consider All Costs

Often an energy-saving innovation is 

cost effective when considered over the 

life of the technology, but other factors, 

such as maintenance, should not be 

overlooked.
Innovative Building Technology Guide | 29

Chapter 2: Economic Considerations

Implementation Phase

Replacement Costs

Again, closely tied to performance, the expected life of a technology is an important economic 

consideration. This indicator will estimate how often you will have to replace it. Light bulbs are a good 

example. An incandescent bulb has a life expectancy of about 1,200 hours; a CFL bulb, on average has a 

life expectancy of approximately 10,000 hours, although an LED is expected to have a useful life of about 

50,000 hours. So, for any technology, you should also consider how often it will need to be replaced. Be 

sure to include the labor to replace it in addition to the cost of the product.

The durability of a product or technology will impact future costs for both replacement and 

maintenance. Therefore, as you select technologies to include in your project, always consider how well 

they will hold up under the expected wear and tear they will get. For example, more durable flooring 

materials will not only last longer than cheaper alternatives, but they also may not require as much 

maintenance, such as waxing or refinishing. The countertop is another product for which you may 

want to consider higher quality materials that will last longer than the least cost option. More durable 

materials and equipment may reduce the amount you need to set aside in your reserve fund each year.

Resale Value

Resale value is another economic consideration that you may want to take into account even in a 

building that you plan to own for many years. Although it may not be a deciding factor in your selection 

of technologies or products, it would be important to keep this value in mind should you sell the building 

sooner than initially anticipated. If this property is a rental, many of the same attributes that make a 

building or a site more attractive to a potential buyer also make it more desirable to a renter.

Indirect Costs or Savings

Indirect costs and savings are those that are not immediately attributed to the actual technology 

but are, in fact, related in some manner. One example of indirect savings may be reduced fire hazard 

insurance rates when monitored security systems are added. An example of an indirect cost might be 

the need to install carbon monoxide alarms when switching from an electric to a gas heating system. 

Another example of indirect savings might be made in reduced tenant turnover because of tenants’ 

higher levels of satisfaction with a dwelling unit, whether because of better comfort, a more secure 

facility, more durable fixtures, or any other benefit resulting from an innovation.
Innovative Building Technology Guide | 30

Chapter 3: Feasibility Considerations

Chapter 3—Feasibility Considerations

Feasibility Top 5

1. Does the innovation meet the occupant’s needs?

2. What are you allowed to do?

3. Have you talked to the building official

4. Is the innovation right for your location?

5. Can the innovation be maintained?

Introduction

Feasibility considerations regarding viable building systems, assemblies, or equipment for your project 

often may be automatic considerations that you take into account nearly without realizing it. For 

instance, if you have secured a grant to upgrade space-conditioning equipment in your multifamily 

building and have no other source of funding, it may not be feasible for you to think about a more 

substantial retrofit of the building envelope. Likewise, a gut rehab may not be viable if tenants 

are to remain in their apartments during construction. So, in many ways, the feasibility of certain 

improvements or technologies may be “givens” that are largely unconscious decisions.

So, why do we raise feasibility to a higher, intentional level of consideration in this guide? Although we 

discuss these reasons in more detail in a subsequent section, several reasons come to mind right away.

• A technology that ranks high in the performance and 

cost areas is not likely to be a good choice if it falls 

down with respect to one or more of the feasibility 

considerations. If a technology is simply impractical, it 

is not worth spending a lot of time researching pros and 

cons. You might think of economics, performance, and 

feasibility as the three legs of a stool. Without three solid 

legs, the stool will not stand.

• A second (and somewhat opposite) reason is so you do 

not overlook opportunities that might add value to your 

project. For instance, although you may not be able 

to open up walls in individual apartments as part of an energy retrofit, you might be able to blow 

insulation into wall cavities from the exterior. Or, perhaps, add insulation in the attic. Within the 

context of replacing heating and cooling equipment, it may be advantageous to consider a different 

type of equipment altogether rather than simply replace in kind. For example, a dual-fuel heat pump 

may make sense from a performance and economic standpoint rather than a stand-alone furnace 

and air-conditioner. As you can see, similar to performance and economic considerations, feasibility 

considerations are also closely linked with the other sections.
Innovative Building Technology Guide | 31

Chapter 3: Feasibility Considerations

Conceptual Phase—Occupant and 

Program Needs

From a feasibility perspective, the conceptual phase is the 

step in which the project is focused based on occupants’ 

needs and the goals of the individual or organization that 

owns or operates the property. A number of catalysts 

may drive a project or the consideration of an innovation. 

Clearly understanding and identifying these drivers will 

help in addressing feasibility in the conceptual phase of 

the project. A few situations that may create the need for 

a project include—

• Recognized need.

• New requirements.

• Failure or substandard performance.

• Funding opportunity.

• Site opportunity.

• Combination of all on this list.

In addition, a federally funded grant, for example), may have specific requirements tied to the work that 

has to be done with that funding. Knowing these program requirements will help direct the project.

A recognized need might be the need for more space because of a tenant waiting list. This need might 

drive a project that includes adding space to a building. A housing authority may decide that all their 

buildings must provide security systems, driving the implementation of new security innovations. 

A federal grant might be offered for converting bathroom fixtures to water efficient units. All these 

different drivers will affect what needs to be considered in a project.

•What	
  innova+ons	
  do	
  occupants	
  need?	
  

•Does	
  your	
  organiza+on	
  or	
  program	
  have	
  specific	
  limits	
  or	
  requirements?	
  

Conceptual	
  Phase	
  	
  

Occupant	
  and	
  Program	
  

Needs	
  

•Explore	
  zoning	
  and	
  code	
  issues	
  up	
  front	
  to	
  flag	
  obstacles.	
  

•Be	
  aware	
  of	
  local	
  regula+ons	
  that	
  may	
  limit	
  innova+ons.	
  

Scoping	
  Phase	
  

Local	
  Zoning	
  and	
  Building	
  

Codes	
  

•Explore	
  product	
  cer+fica+on	
  and	
  compliance	
  reports.	
  

•Confirm	
  overall	
  project	
  code	
  compliance.	
  

Design	
  Phase	
  	
  

Compliance	
  

•Consider	
  how	
  scheduling	
  and	
  sequencing	
  affect	
  adop+on	
  of	
  innova+on.	
  

•Explore	
  the	
  availability	
  of	
  skilled	
  maintanence	
  staff	
  for	
  innova+on.	
  

Implementa5on	
  Phase

Construc+on	
  Trades	
  and	
  

Schedules	
  

Conceptual Phase
Innovative Building Technology Guide | 32

Chapter 3: Feasibility Considerations

Conceptual Phase

During the conceptual phase, it is necessary to clearly lay out the needs and goals for the community or 

project and for the developer and funding agency. This discussion will help make decisions regarding site 

selection (if one has not already been identified), new construction, renovation of an existing building, or 

alteration of your own facility. At this phase, ask the following questions :

• What is the expected occupancy or use of the community/building? (For example, housing for 

seniors, affordable housing for families, and short-term housing for at-risk individuals.)

• What are the needs of the expected occupancy or use? (For example, proximity to public 

transportation, health care, schools, food shopping, security, and recreation.)

• Is a funding source in place? If yes, what are the 

associated requirements for the project location, site, 

or general building type?

• Does the project consist of multiple single-family 

buildings or one or more multifamily buildings?

• Does the project require an expanded environmental 

review (State Environmental Quality Review, or SEQR)?

• Are any variances or special permits required?

• Are the required utilities available?

Scoping Phase—Local Zoning and Building 

Codes

Any building project needs to consider a variety of 

regulations, and interacting with these requirements early 

in the process will help avoid any feasibility obstacles. The 

following example depicts situations in which a project may 

need to consider different regulations, depending on the 

scope of your project.

Scoping Phase
Innovative Building Technology Guide | 33

Chapter 3: Feasibility Considerations

Scoping Phase

During the conceptual phase, if you have a site in mind or in hand, it is not too early to discuss your 

project with the local officials or to ensure that it meets Local zoning ordinances and comprehensive 

plans, if any are in place. Make it a point to meet with the following boards or officials.

During the conceptual phase, if you have a site in mind or in hand, it is not too early to discuss your 

project with the local officials or to ensure that it meets Local zoning ordinances and comprehensive 

plans, if any are in place. Make it a point to meet with the following boards or officials.

Planning Board

Most towns, cities, and even villages will have local planning boards. The primary function of the 

planning board is to recommend and oversee land use ordinances and zoning. Although it is the role 

of the legislative body, for instance a town council, to actually adopt zoning laws, the planning board 

makes recommendations, participates in developing comprehensive plans, reviews subdivisions and 

large development projects for compliance with existing ordinances, and oversees the SEQR process or 

environmental impact assessment.

Zoning Ordinances and Zoning Board of Appeals

Zoning ordinances are developed at the local 

level (city, town, or village) and consist of written 

regulations and laws that define how property 

in specific geographic areas can be used. Zoning 

ordinances specify whether zones can be used for 

residential, commercial, industrial, or agricultural 

purposes, and they may also regulate lot size, 

building setback, density, and the height of 

structures. Local zoning ordinances also often cover issues such as required off-street parking, signage, 

grounds maintenance, trash removal, historic districts, and more. As individual or neighborhood-based 

renewable energy systems are becoming more prevalent, many jurisdictions are adding ordinances 

regarding size and placement of these systems. Some land use regulations may, either intentionally or 

unintentionally, place restrictions on wind-power generation, the use and storage of propane, onsite 

power generation for combined heat and power or solar electric systems that sell electricity back to the 

utility company, and the use of electric heat. In addition, the local zoning ordinance will lay out required 

procedures for handling infractions, granting variances, and hearing appeals.

Zoning Official

If a jurisdiction has a zoning ordinance in place, the city, town, or village board will appoint a zoning 

official to handle enforcement. In many cases, the building code official also fills the role of zoning 

official. For smaller and straightforward construction projects, such as a single-family home or even a 

single multifamily building, the zoning official will determine whether the proposed project complies 

with local ordinances, such as occupancy, use, setbacks, and so on. For subdivisions and other large 

projects, the project must be presented to the planning board. Such projects often trigger a SEQR or 

environmental impact assessment. Assuming no significant environmental issues exist, the SEQR is 

usually not lengthy but does require the applicant to file an environmental assessment form and often 

a draft environmental impact statement. After the public notice is made about the project, a 30-day 

(usually) public comment period ensues. If objections are raised, the planning board is likely to hold a 

public hearing before making its final decision regarding approval of the project. You can obtain a copy 

of the local zoning ordinance on your municipality’s website or through your local building department.

Because so many varied local 

ordinances might impact your 

project, it is important to check with 

zoning and building officials early in 

the conceptual phase.
Innovative Building Technology Guide | 34

Chapter 3: Feasibility Considerations

Scoping Phase

Potential Impacts of Zoning Ordinances on 

Your Project

Just as you want to make sure that all aspects 

of your project are compliant with the relevant 

building code, you also want to be sure you are 

in compliance with local zoning ordinances. Your 

design professional will usually take primary 

responsibility for this step, but depending on the 

characteristics of your project and the design 

development process, you, or your representative, 

may want to discuss your plans with the local zoning 

official or building code official and your own legal 

counsel early in the conceptual phase. It will nearly 

always be necessary to obtain formal site plan 

approval and it is wise to do this step before the 

details of the building/project design get too far 

along. For instance, a few examples of how a local 

zoning ordinance might affect your building design 

or even your entire project concept include—

• Setbacks from the lot lines affect the size or 

shape of the building.

• Space for offstreet parking must be adequate 

for proposed number of units/occupants.

• Proposed occupancy or use may require a 

variance.

• Project may be in a wetlands or 100-year flood 

zone.

• Building footprint and required green space.

What if your project does not comply with all 

local ordinances?

A process for appeal is used if a project is not in 

compliance with a particular local ordinance. It 

is likely that a jurisdiction will have appointed a 

zoning board of appeals to hear such cases and 

grant variances. The criteria for granting a variance 

are established by state law and typically revolve 

around the following attributes:

• Undue hardship as a result of the unique 

characteristics of the property; for example, the 

narrowness of the lot size and the hardship has 

not been caused by the appellant.

• Physical conditions of the property prevent 

reasonable use of the property.

Case Study

I Have Never Seen That 

Before!

A housing authority’s staff members 

were managing construction of a new 

multifamily housing unit. Because of a 

cost issue, the standard piping materials 

used in the authorities’ plumbing 

specifications would not work for the 

project. A local supplier proposed using 

an innovative new piping material to 

save on cost and improve connection 

durability.

Staff approached the local building 

department to ask about code 

compliance, but the product was not 

currently permitted by code. The housing 

authority submitted an application to 

the state plumbing review board for 

acceptance of this material.

After gaining approval, the housing 

authority was able to use the new 

piping material, realize cost savings, and 

improve the durability of the project, 

reducing future maintenance costs.

Lesson Learned

Know the Process

By understanding how to gain approval 

for new materials through the code 

process, the Housing Authority was 

able to use a material that met their 

performance and economic needs.
Innovative Building Technology Guide | 35

Chapter 3: Feasibility Considerations

Scoping Phase • Variance will not affect the essential character 

of the neighborhood and will not pose a danger 

to the public welfare.

• Variance is the minimum that can be done 

to afford relief and represents the least 

modification of the local law.

• Check with your zoning official regarding the 

timeline prescribed for taking a project through 

the appeals process.

After taking high-level feasibility considerations into 

account and identifying general needs and goals 

for the project, you can begin to take the next step 

in defining your project. With no major roadblocks 

affecting the overall feasibility of the project, 

you can lay out more specific characteristics of 

the project. During the scoping phase, you will 

identify any constraints or prerequisites that may 

dictate aspects of the design of the building(s). 

Examples of constraints may be the size and shape 

of the lot, the anticipated occupancy, the need 

for accessibility features or elevators, or required 

architectural features if these constraints have 

been put in place at the local level. Some scoping 

considerations that apply to nearly every project 

are discussed in the following section.

Is the project new construction or renovation 

of an existing building?

Example: Existing building:

• Is the project a significant renovation, an 

addition, a repair, or a replacement?

o Importance: Will trigger applicable code 

provisions.

• Will the project entail a change of use or 

occupancy?

o Importance: Will trigger applicable code 

provisions; may require a variance.

• Will the building be occupied during 

construction or is swing space available to 

house current residents?

o Importance: Will influence the type of 

work that may be feasible.

Case Study

You Do Not Want to 

Open That.

A multifamily building was undergoing 

a deep energy retrofit to try to save the 

building owner and tenants money on 

energy costs. Multiple energy-savings 

measures were considered for the project 

including updating HVAC equipment, 

adding insulation, upgrading windows and 

sealing air leaks.

During the planning process, it was 

discovered that the building had 

aluminum wiring. A discussion with the 

local building department determined 

that uncovering a significant amount of 

this wiring would require a complete 

rewiring of the building—well beyond 

the budget of the project. Because of 

the desire to leave the existing wiring in 

place, wall insulation was eliminated as 

a possible energy-saving measure. The 

budget was focused on other items, and 

the building was still able to achieve more 

than 40 percent reduction in energy use, 

despite limited options.

Lesson Learned

Talk to the Building 

Department

Early communication with the local 

building department identified code 

issues that would have added prohibitive 

cost to the project depending on retrofit 

choices. It is vital to identify code issues 

early for successful planning of any 

project.
Innovative Building Technology Guide | 36

Chapter 3: Feasibility Considerations

Scoping Phase • Are related improvements required that may enhance the planned scope or simply make sense to 

make at the same time?

o Examples: air sealing, duct sealing, replacing windows, upgrading interior and exterior 

lighting and controls, or replacing existing thermostats with programmable thermostats.

What is the approximate project budget?

For obvious reasons, the size of the budget that is available will influence the scope of the scope of the 

improvements to be included in a renovation project or the size of an addition or new construction 

project. It may define the types of technologies that are reasonable for you to consider. For more 

discussion of budgetary considerations in the scoping phase, see the economic considerations chapter. 

Do any site conditions constrain the project?

Consideration of site conditions will always come into 

play as you are planning and scoping your project. 

Such conditions may pertain to the lot, such as lot size 

or soil type, or they may pertain to the location of the 

site, such as geographic region or, more specifically, 

the surrounding neighborhood. The geographic region 

may warrant mitigation of risk, such as hurricane 

or earthquake resistance. The characteristics of the 

neighborhood may also influence project scope and 

design—for instance, if the building is in a historic district 

where certain features must be maintained or in an 

urban area that requires increased soundproofing or 

security.

Does the site have any issues with hazardous materials; for example, with brownfield 

contaminants, lead, or asbestos?

Environmental concerns such as these will have a significant influence on the measures that must be 

included in your project and on your project budget. Regulations regarding remediation, removal, or 

disposal are developed at the federal level and typically enforced at the state level by an agency such 

as a department of environmental conservation. In some cases, local governments come into play by 

specific land use laws included in their zoning ordinances.

During the scoping phase, visit 

the local building department 

and speak with the building 

code official regarding building 

codes that are in place for the 

jurisdiction where your project 

is located—especially if you 

are aware of some constraints 

cited here.
Innovative Building Technology Guide | 37

Chapter 3: Feasibility Considerations

Design Phase

Design Phase—Compliance

During this phase, the building design and technologies to 

be included are developed and specified. Depending on 

the size of the project, one or more design professionals 

are likely to be on board and take the lead in this phase.

As the building design takes shape and technologies are 

being identified and selected, in this phase you are likely 

to be considering performance, economics, and feasibility 

issues concurrently. Assuming that you have ensured or 

are in the process of ensuring that your project complies 

with all local zoning ordinances, the design phase is the 

time during which the most considerations related to 

elements of feasibility will come into play. As you review 

different technologies for inclusion in your project, 

evaluate them in light of the following questions:

Code Compliance

Background on Building Codes

Although the United States has no official national building code, the building codes developed and 

maintained by the International Code Council (ICC) are widely adopted by states and municipalities 

across the country. The ICC, a member organization of building code officials and other local 

government representatives, develops, publishes, and maintains building codes for residential 

buildings, commercial buildings, and energy efficiency. Two other national organizations—the 

International Association of Plumbing and Mechanical Officials and the National Fire Protection 

Association—develop the Plumbing Code, Mechanical Code, and National Electric Code. Collectively, 

these codes are often referred to as “the I-Codes.” As they adopt one or more of the I-Codes, many 

state and local jurisdictions include amendments to better fit their locale or region.
Innovative Building Technology Guide | 38

Chapter 3: Feasibility Considerations

Design Phase

Depending on the innovation, multiple codes 

may apply when determining compliance. A few 

codes, however, are likely to be more relevant as 

a resource than others. A locally adopted building 

code provides a way for builders, contractors, and 

building owners to evaluate whether a product 

or technology is permitted according to building 

regulations.

In addition, the code may provide information about 

applications in which certain product classes are 

required rather than others. For example, a certain 

piping material may be permitted for above-grade 

plumbing supply lines, but it is not permitted for 

underground use. This type of guidance will help in 

determining a product’s feasibility if a jurisdiction 

has adopted one or more of the ICC codes.

If a building code is in place in your jurisdiction, keep 

in mind that all new construction projects must 

meet this code at a minimum. Additions to existing 

buildings must also meet the local code, although 

the existing portion of the entire building is not 

required to be brought up to these standards as long 

as it was legal when it was constructed. Likewise, 

renovations to existing buildings do not always 

need to meet the current code. If the occupancy 

or use of an existing building will change, however, 

the building must meet code as if it were new 

construction. Check with your local code official 

about these specifics related to compliance.

Although your architect or 

contractor may know whether a 

particular product or technology is 

code compliant, it is still important 

to verify with the local building 

official regarding who has the final 

word.

Example: In a single-family home, 

if you open the exterior walls, the 

International Energy Conservation 

Code requires that you fill the 

cavity with insulation, although not 

necessarily to the level required 

by code for new buildings. When 

replacing mechanical equipment 

or water heating equipment, 

however, you must meet minimum 

code requirements for that new 

equipment.
Innovative Building Technology Guide | 39

Chapter 3: Feasibility Considerations

Design Phase

Primary I-Codes of Likely Interest

International Existing Building Code (IEBC)

International Residential Code (IRC)
Innovative Building Technology Guide | 40

Chapter 3: Feasibility Considerations

Design Phase

International Building Code (IBC)

International Energy Conservation Code (IECC)
Innovative Building Technology Guide | 41

Chapter 3: Feasibility Considerations

Design Phase

Although you do not need to have the same depth and breadth of understanding of the applicable 

building codes as your design professional, some familiarity with basic code requirements or those 

that are most relevant can benefit your project. Code requirements, whether pertaining to structural 

elements, energy efficiency, fire safety, or local risks are the minimum that can be done. In many cases, 

you may decide to go beyond the minimum to enhance the performance of your building. For instance, 

in a hurricane prone region, you may want to increase the strength of structural connections or raise the 

building higher off the ground, or use more durable and weather resistant materials than those required 

by code. In nearly any region of the country, you may decide to increase insulation levels or use higher 

performing windows or more efficient HVAC equipment to lower operating costs and increase comfort 

over the time you own the building.

To find out what codes are applicable to your project:

 Contact the local building department where your project is located.

 Check with your design professional or contractor.

 Check the website of the city, town, village where your project is located.
Innovative Building Technology Guide | 42

Chapter 3: Feasibility Considerations

Design Phase

Are the technologies/products/materials under consideration code compliant?

It may not always be clear if an innovative product you want to use is permitted by code. You may have 

a good grasp of the code or be able to find the answer through diligent research. You may also need to 

consult a design professional, however. Either way, it is important to touch base with your local building 

official to see how the jurisdiction views the product, or if they have even heard of it. If the product is 

already permitted by code, your job is not yet done. To achieve smooth integration of the product, make 

sure you understand requirements in the code and the manufacturer’s installation instructions. If the 

product is not currently permitted by code, you are not out of options. You may be able to point your 

local building official to a precedent at either the state level or in another jurisdiction. In addition, you 

may need to follow a process to gain acceptance for the product, such as submitting a code evaluation 

report on the product from an independent third party.

Code Evaluation Services

A number of independent third party companies evaluate products and materials for compliance with 

the major building codes. Developers and manufacturers of innovative products and materials will often 

have their products evaluated to achieve ready-acceptance by local building officials. This step can be 

significant in getting their products into the marketplace and increasing their use.

Evaluations for code compliance will undoubtedly entail requirements for testing according to relevant 

test standards. Usually the evaluation certificate will indicate the particular standards to which the 

product was tested.

Keep in mind that a successful evaluation for compliance with a particular building code paves the way 

only for its being allowed according to that code. Full code compliance will also entail proper application 
Innovative Building Technology Guide | 43

Chapter 3: Feasibility Considerations

Design Phase

and installation. A product may have a code evaluation report demonstrating compliance with certain 

provisions, but the product may not be appropriate for the specific application you are considering.

How to determine if a product has had such an evaluation:

• Check the product literature and the manufacturer’s website.

• Check the websites of the code evaluation services listed in the appendix. An area of the website 

may list all the products they have evaluated.

Also keep in mind that compliance with one or more of the I-Codes does not mean that the product 

complies with your local code or that your code official will adopt it without question.

Some available independent code evaluation services are listed in the appendix.

Climate Appropriateness

Considerations regarding climate-appropriate technologies are areas in which feasibility, performance, 

and economics often intersect. By selecting technologies that are practical for your climate, you will be 

optimizing the performance of your building, which, in turn, will result in cost-effective operation and 

maintenance.

Identify Your Climate Zone

DOE climate zones serve as the basis of IECC requirements for insulation levels, window performance 

characteristics, and HVAC and water heating equipment sizing and efficiency. 

As your climate becomes more severe (either hot or cold, or humid or dry), you will want to consider 

higher levels of insulation, better performing windows, and more efficient space-heating/cooling 

equipment. 
Innovative Building Technology Guide | 44

Chapter 3: Feasibility Considerations

Design Phase

Although not prohibited by code, certain types of space-heating equipment may not be as suitable 

for certain climates. For instance, a standard air-source heat pump will not perform cost effectively 

or produce desired levels of comfort in climates with very cold temperatures (for example, significant 

periods below 40 °F). Some manufacturers have developed air-source heat pumps that do perform well 

at these lower temperatures, however, so it is worth looking at what is frequently referred to as a “cold 

climate heat pump.”

In a hot, dry climate like Phoenix, Arizona, the emphasis will be on cooling, and selecting the most 

efficient air-conditioning equipment the budget permits may be advisable. Standard space-heating 

equipment for a short, moderate heating season may be all that is really warranted, given the amount of 

time it will operate.

The choice in selecting the most effective innovations may be driven by both temperature and humidity. 

For example, in colder climates, a heating recovery ventilator may be appropriate. In humid climates, 

dehumidification strategies may be needed.

For new projects or additions, your climate zone will affect the orientation and design of your building. 

When feasible, maximize southern exposure in all climates that have a heating season; maximize 

exposure to prevailing winds in cooling dominated climates; avoid significant north-facing glazing in 

cold climates and west-facing glazing in warm/hot climates. These examples are only a few of the ways 

that climate considerations may affect your design. The humidity or dryness of your climate affects the 

method of application of vapor barriers, strategies in HVAC duct location, and appropriate ventilation 

design.
Innovative Building Technology Guide | 45

Chapter 3: Feasibility Considerations

Design Phase

Regional Appropriateness

Feasibility considerations will also pertain to the geographic region where your project is located. 

Characteristics of the region, such as susceptibility to natural disasters, environmental specificities, or 

typical construction practices, will affect the feasibility of certain building technologies. For instance, if 

the building is in an area that is prone to flooding, a pier foundation rather than a basement foundation 

is likely to be a more practical, durable, and resilient choice.

High Hazard Areas

In areas where risks are very high, the building code will specify more stringent construction 

requirements for new construction, whether it is a new building or an addition. For replacements or 

renovations, the more stringent requirements may apply if the component or assembly in question is 

addressed by a particular code provision. For instance, replacement of roof underlayment or shingles 

in high wind areas will require additional fasteners and closer spacing of fasteners, whether directly 

specified by the code or specified in manufacturer installation instructions. Be sure to check with your 

design professional or code official regarding any special provisions or severe risks that apply in your 

region.

Even if your project is not in one of the high-hazard areas designated by the building code, you may want 

to consider the specified materials or construction practices that are recommended when a moderate 

risk is present. As an example, the International wildland-urban interface (WUI) code has mapped 

regions of the country where the risk of wildfire is high; the code requires fire-resistant materials and 

provides construction details for new construction in these locations. Yet, in recent years, a number 

of large and very serious wildfires have occurred in areas not specifically identified on the map. Given 

the property losses that have occurred, it may be wise to incorporate more fire-resistant construction 

practices if your project is located in an area where you believe the risk may be high.

Market Acceptance

In some cases the appearance of a product, or the perception of that product may be positive in a 

certain region and negative in a different region. For example, the exterior cladding used on a home or 

building (stucco, vinyl siding, fiber cement, cedar, and stone veneer) often varies greatly from region to 

region. In some cases, this variation is because of performance issues. In other cases, the reason is more 

because of aesthetics and market perception. Keep in mind that a product may perform well, but would 

not be consistent with the vernacular of the local community. If a certain type of exterior cladding is not 

accepted in your region, it may affect your ability to attract tenants or sell a home.
Innovative Building Technology Guide | 46

Chapter 3: Feasibility Considerations

Implementation Phase

Implementation Phase—Construction 

Trades and Schedules

The availability of experienced labor, in addition 

to scheduling of construction trades and careful 

staging of construction can have a large effect on 

the feasibility of an innovation. If the integration of 

an innovation is not carefully planned for, the most 

efficient point in construction for the installation 

of that innovation may be missed. Likewise, if 

construction trade personnel are not available who 

understand the installation of the innovation, it may 

not be feasible to use.

Schedule and Construction Staging

To ensure that the installation of the product is 

feasible ask a number of important questions
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Chapter 3: Feasibility Considerations

Implementation Phase

Availability of Experienced Labor

Typical construction practice may also vary 

according to geographic region. Often, it may be 

because of climate, but sometimes it is simply 

because of contractors being slower to pick up 

a new technology. For instance, although Pex 

piping is fairly widely used now, it did not have 

uniform regional acceptance across the country 

until recently. Tile roofs and stucco exterior 

wall finishes are much more common in the 

Southwest than they are in the Northeast.

Although innovative construction technologies may, by definition, not be “typical practice,” the 

availability of experienced installers should be taken into account when considering both initial 

installation and maintenance in the future. If the closest installer of a technology you are considering is 

100 miles away, it may be more expensive to procure and install and harder to obtain regular servicing 

and maintenance.

If your facility has a maintenance staff, their skill set is a related consideration. Consider the learning 

curve that will be required to ensure that your staff understands the day-to-day operation of the 

equipment or systems in the building and has sufficient knowledge to troubleshoot small issues and 

identify larger issues that may require the skills of an expert technician.

It is important that all trades involved in the 

installation of a new technology review the 

specifications well ahead of procurement 

and installation.
Innovative Building Technology Guide | 48

Chapter 4: Performance Considerations

Chapter 4—Performance Considerations

Performance Top 5

1. How do you want your innovation, home, or building to perform?

2. What innovations address that performance issue?

3. Has the innovation been tested or certified?

4. How does the innovation affect other systems or the whole building?

5. Make sure the innovation performs as designed.

Introduction

Evaluating a technology for performance 

considerations is a critical part of specifying what 

products and systems will be used in your project. 

How the technology performs will ultimately 

determine whether you have met the objectives 

of the project. For example, if you want to replace 

your appliances and want to achieve some energy 

savings in the process, you might be able to find 

a cheap clothes washer somewhere that will 

certainly wash your clothes, but the chances of 

your actually experiencing any energy savings 

as a result of that newly purchased equipment are slim to none. If you invest in an ENERGY STARcertified clothes washer (which also happens to be eligible for some rebates), however, you would 

have assurance (through testing) that the washer would not only clean your clothes but would also 

increase your energy efficiency. Likewise, if you are looking for quality and durability as performance 

characteristics in an innovation, you may find the lowest cost option does not necessarily meet your 

performance expectations.

Performance is a broad category that may vary widely depending on the technology under 

consideration and the context in which it will be installed. Specific attributes you look for will depend 

on a variety of factors, such as the local climate, the type of occupants or needs of residents, new 

construction versus existing, desired life expectancy, and, of course, any requirements associated with 

a funding source. In short, evaluating a technology for performance also requires you to consider both 

the economic and feasibility considerations of the project as well. As we have mentioned throughout 

this guide, all three of these considerations are critical to the success of a project.
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Chapter 4: Performance Considerations

Conceptual Phase

Conceptual Phase—Desired Performance Attributes

As you construct a new building, plan a renovation, 

or simply purchase an innovative product, your 

performance objectives will significantly affect how you 

choose innovations. For example, if your goal is to reduce 

water use, you may focus on low-flow plumbing fixtures 

or perhaps an efficient plumbing layout to minimize 

waste. If your goal is to replace worn-out flooring in 

a high-traffic area, you may choose a material that is 

highly durable or perhaps that is easy to clean. If you 

are building a new home in an area with high tornado 

risk, you will probably consider innovations that provide 

structural durability and resilience. Considering how you 

want your building or product to perform and the level of 

performance you want to achieve will help focus scope 

and design.
Conceptual Phase

Innovative Building Technology Guide | 50

Chapter 4: Performance Considerations

Energy Efficiency

Energy efficiency is often a top performance attribute desired in innovative building technologies. An 

energy-efficient building or system offers both the qualitative benefit of comfort and the quantitative 

benefit of dollar savings. With unpredictable and fluctuating energy prices—usually in the “UP” 

direction—an efficient building envelope and efficient equipment will help insulate (literally) you and 

the building residents from rising utility bills. Top energy-efficiency considerations include—

How energy efficient should your building be?

The short answer is, “As efficient as your budget 

permits.” The ENERGY STAR label for new homes 

and the Home Performance with ENERGY STAR

for existing homes can provide guidance about 

measures you can incorporate into your project. 

A new ENERGY STAR home is about 15 to 20 

percent more efficient than the same home built to code minimum 

standards.

Under the DOE Zero Energy Ready Home Program, builders have 

routinely constructed homes to achieve performance 30 percent, 

40 percent, and greater above code. Net Zero homes that produce 

as much energy as they consume over the course of a year are 

certainly not unheard of, although they do require some type of 

renewable energy on site, such as solar or wind power.

Both the ENERGY STAR and Zero Energy Ready home programs 

offer certification to lowrise (three stories or lower) and some 

midrise (four or five stories) multifamily buildings. ENERGY STAR 

also has a certification for highrise buildings. Although certification 

under these programs is not necessary to achieve an energyefficient home or building, certifications do provide a level of 

assurance that the designed efficiency has had some verification, 

Important Performance Considerations
Conceptual Phase

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Chapter 4: Performance Considerations

and, in the programs described previously, the efficiency level is set by a federal agency, adding 

credibility to any claims of energy efficiency.

Although a whole building label may not be a realistic option if you are making improvements to an 

existing building or replacing a piece of equipment or an appliance, remember that many products 

carry energy-efficiency labels. For example, look for the yellow Energy Guide label that you will find 

on many types of equipment and appliances. This label will show you the energy performance of the 

particular model compared with the highest and lowest performing similar products on the market. 

These products may or may not be ENERGY STAR-labeled, but the label does provide a snapshot of the 

energy ranking of the product you are considering. ENERGY STAR also provides labels for many classes of 

products that will indicate a high level of performance.

The U.S. Environmental Protection Agency’s (EPA’s) ENERGY STAR Products Program was developed as a 

way to make it easier for consumers to identify and purchase more energy-efficient products to save 

energy and in the process, save money. In addition to being available for many electronic products, the 

ENERGY STAR label is available for much of the equipment and appliances in buildings, including—

• Furnaces, boilers, and air-conditioners.

• Refrigerators and freezers.

• Dishwashers.

• Clothes washers.

• Water heaters.

• Windows, doors, and skylights.

• Light fixtures and bulbs.

What does the ENERGY STAR label mean?

The EPA uses the following criteria to determine 

whether a particular product is eligible for the 

label.

• Product categories must contribute 

significant energy savings nationwide.

• Qualified products must deliver the features 

and performance demanded by consumers, 

in addition to increased energy efficiency.

• If the qualified product costs more than 

a conventional, less-efficient counterpart, purchasers will recover their investment in increased 

energy efficiency through utility bill savings, within a reasonable period of time.

• Energy efficiency can be achieved through broadly available, nonproprietary technologies offered by 

more than one manufacturer.

• Product energy consumption and performance can be measured and verified with testing.

• Labeling will effectively differentiate products and be visible for purchasers.

Many HUD-funded programs, projects, 

and grants require that ENERGY STARlabeled products be used whenever they 

are available and cost effective.

Also, keep in mind that the Energy Code 

adopted in your jurisdiction is the lowest 

level of efficiency permitted by law. 

Unless your city or town has adopted 

above-code energy requirements, 

consider ways to incorporate abovecode measures in your project.
Conceptual Phase

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Chapter 4: Performance Considerations

The Economics of Energy-Efficiency Decisionmaking

Energy-efficiency considerations are one of the areas where you will constantly be moving back and 

forth between the performance benefits of increased efficiency and the associated economic costs and 

savings. Energy cost savings are an important performance metric to keep in mind while analyzing any 

energy-efficient innovation. Although some considerations, such as comparing several product options, 

may be fairly straightforward, other evaluations can be quite complex and involve building modeling, 

pricing projections, inflation, and depreciation.

Consider the energy and economics expertise you have access to and whether you might be well 

served to hire an outside expert in the field, such as the Building Performance Institute (BPI), Inc., which 

trains and certifies energy auditors who can prioritize energy improvements for your building, while 

ensuring that the indoor environment is safe and combustion appliances operate properly. An energy 

audit can help identify those measures that offer the greatest savings for the investment. See the 

economic considerations chapter for more discussion on economic analysis.

Sustainability/Green

“Green” is also a term that has become widely 

used in relation to building technologies and 

generally, can refer to the environmental 

impact of a particular product, system, or whole 

building. Green labeling takes into account 

the entire life cycle of the building or product 

including sourcing materials, manufacturing, 

use/operation, and disposal. A building lot or 

site can also be considered “green,” for instance 

an infill lot or brownfield site or a site within 

walking distance to shopping, schools, and public 

transportation.

Several national green building programs, such 

as LEED, LEED for Homes, and the National Green 

Building Standard, have been developed.

In addition, many local green building programs, 

such as those in Austin, Texas, Denver, Colorado, 

New Mexico, and several locales in Washington 

State, have been created. Nearly all consist 

of sections related to site development, 

resource efficiency, energy efficiency, water 

efficiency, and healthy indoor air quality. A 

set of mandatory requirements and a series of 

elective guidelines are typically associated with 

a point system. Each program usually offers the 

user the option of several “tiers of green.” All 

these programs involve some type of third party 

verification that includes plan review and site 

inspection. Even if you are not able to have or 

are not interested in having your 

Because many local jurisdictions have 

local green building programs, you 

should check to see if any are in your 

area. Be cautious, however, because 

“green” has become the ubiquitous 

endorsement of everything from 

building products to children’s toys, 

and manufacturers have rushed to 

find ways to market their products as 

environmentally preferable. Labels often 

can be misleading and claims vague, 

giving consumers a less-than-accurate 

understanding of what the green label 

means. The EPA and Federal Trade 

Commission are stepping in to provide 

more robust rules about “ecolabeling” 

and environmental marketing claims. 

So, it is recommended that you carefully 

“check the source” when selecting 

a product based on claims of being 

“green-certified.” Was it certified by a 

third party or recognized by a federal 

agency such as the EPA? Is the third 

party nationally recognized and certified 

as a qualified green-certification agency? 

What is the basis of the manufacturer’s 

claim that the product is green?

 CAUTION 
Conceptual Phase

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Chapter 4: Performance Considerations

project designated by one of these programs, it can be useful to review their guidelines to get ideas for 

sustainable measures that may be realistic to include in your project.

Durability/Resiliency

Durability and resilience are closely related but have slightly different implications. Durability refers 

to a product or system that is long lived, having characteristics that allow for it to withstand the 

anticipated conditions to which it will be exposed, while continuing to maintain its function or purpose. 

For instance, a siding material will be exposed to 

weather, including wind, sun, rain, and hail. On 

occasion, it may be exposed to the occasional 

baseball or lawn mower. We look for siding 

materials that maintain their shape and color, 

resist bulk water penetration, and do not crack 

easily.

Durability is also linked to maintenance in 

the sense that a product may last 100 years, 

with the condition that it is regularly painted, 

waterproofed, and so on. Quite often, you will 

be evaluating the durability of a product on a 

relative scale. How does one product compare 

with another option to fulfill the same function?

Resilience is quickly coming to be the focal point 

of good building design. Whether because of 

the numerous natural disasters in recent history 

around the country and around the world, the 

growing concerns about climate change, or the 

increasing interconnectedness and complexity 

of systems, building science professionals are 

looking to materials and detailing that will allow 

for a building to “bounce back” after a severe 

event. A number of elements can improve the 

resilience of a building:

• Redundancy.

• Flexibility.

• Adaptability.

• Self-sufficiency.

• Durability.

Case Study

The Up (or Down) Side of 

Carpet

A non-profit housing organization installed 

wall-to-wall carpet in a building that served 

as temporary housing for mentally disabled 

adults. The intent was to increase the 

occupant’s comfort.

The nature of the use of the housing, the 

population being served, and the nearconstant turnover of tenants required 

routine heavy cleaning of the carpeting.

The constant damage sustained and 

cleaning needed quickly destroyed the 

carpet. The organization decided to replace 

the carpet with a flooring type that was 

easier to clean.

Lesson Learned

Know Your Tenant 

Population

Despite desirable performance attributes 

that drove the flooring choice, the feasibility 

of using carpet with this specific population 

and building use made a cheaper, easier to 

clean, flooring choice a better option.
Conceptual Phase

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Chapter 4: Performance Considerations

Low Maintenance

As a public housing owner or manager, building products and finishes that do not require frequent 

painting, cleaning, or tinkering will save money in operating costs throughout the life of the building. If 

the building is in a climate with frequent severe weather, select durable materials for the exterior that 

will stand up to heavy rains, hail, snow, or whatever your weather conditions may be. Exterior building 

materials that require painting generally may not be the best choice if low maintenance is an attribute 

on your list. It is also important to keep maintenance considerations in mind when planning the lawn 

area and landscaping around the building. Frequent watering, pruning, and general care will require 

hired labor and use of utility-metered resources. On the interior, look for materials that are easy to 

clean and hold up well to the anticipated traffic or use different areas will get.

Low maintenance also includes the frequency of replacement that entails recurring costs over the life 

of your building. Consider purchasing materials that are expected to be long lasting and durable, even if 

they cost a little more up front. Again, consider the economic implications over the life of the building—

not just the initial purchase price.

Disaster Resistance

The extent to which disaster resistant is high on your list of attributes is likely to depend on the 

characteristics of the geographic region your building is located. To a certain degree, the building codes 

identify and address high-risk areas. Evidence of significant property damage certainly exists in areas that 

are not necessarily formally associated with high risk, such as the severe flooding in many Upstate New 

York towns as a result of Hurricane Irene. Although not natural disasters, widespread power outages or 

blackouts can also create significant issues for residential and commercial establishments alike. Depending 

on the nature of your facility and the demographic of the occupants, consider whether some measures 

to mitigate effects of a disaster might be warranted. Measures can range from the very basic, such as 

elevating equipment above floor level, to the more costly, such as installing backup generator capability.

The FORTIFIED HomeTMProgram developed by the Insurance Institute for Business and Home Safety (IBHS) 

is designed to strengthen new and existing homes against hazards that they may experience. The program 

identifies a set of mandatory measures, based on the location of your property, that must be implemented 

to receive the designation. A trained and certified FORTIFIEDTM evaluator provides third party verification 

that your project has been designed and constructed to meet the hazard-mitigation standards appropriate 

for your area. The program goes a step further than the building codes via a more conservative mapping of 

regions that are prone to high winds, severe winter weather, thunderstorms, and hail.

Resilience STARTM is a pilot program developed by the U.S. Department of Homeland Security to build and 

retrofit single-family homes to make them more hurricane resistant. This program employs guidelines of 

the IBHS and targets buildings under severe threat in the coastal regions of the South and Southeast. 
Conceptual Phase

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Chapter 4: Performance Considerations

Water Efficiency

The degree to which water efficiency is an important attribute for you is also likely to depend on 

your geographic region. Areas such as the Southwest, central California, 

and agricultural areas of the Midwest are regions where states and 

municipalities engage in significant efforts to encourage water conservation. 

In many of these places, water is rationed at least during certain times of 

the year and the price you pay for water is likely to be connected to the 

volume of consumption.

The WaterSense Program is another EPA-sponsored initiative that enables consumers to identify products 

that will use at least 20 percent less water than standard products without sacrificing performance. 

Products eligible to earn the label include bathroom faucets, showerheads, toilets and urinals, and 

weather-based irrigation controllers. In addition, new homes can earn the label whereby a third party 

rater verifies that the home will be water efficient both indoors and out. For a product to earn the 

WaterSense label, it must—

• Perform as well or better than its less efficient counterparts.

• Be 20 percent more water efficient than average products in that category.

• Realize water savings on a national level.

• Provide measurable water savings results.

NAHB/Bank of American Home Equity: Study of Life Expectancy of Housing Components

The life expectancy of housing components depends on a number of variables, including 

installation, maintenance, environmental conditions, use, technology, and consumer 

preferences. The average life expectancy for certain components has increased over 

time but has decreased for other components. In 2006, the National Association of 

Home Builders (NAHB) conducted a comprehensive telephone survey of manufacturers, 

trade associations, and researchers to analyze information regarding the longevity and 

life expectancy of housing components.

Many participants indicated that the quality of maintenance and changing consumer 

preferences have significant effects on the life expectancy of housing components. 

Components such as HVAC equipment require regular maintenance and can 

substantially affect the product’s longevity. Cabinets, appliances, and technology 

are vastly affected by consumer preferences, trends, and styles. The study covers a 

wide variety of housing components, ranging from electrical lighting to footings and 

foundations. For each component analyzed, the survey findings are summarized in a 

brief description of characteristics regarding presumed life expectancy. For example, 

for decks the study states, “Because they are subject to a wide range of conditions in 

different climates, the life expectancy of wooden decks can vary significantly. Under ideal 

conditions, they have a life expectancy of about 20 years.” Findings are also summarized 

in a table outlining the different components and their presumed life expectancies.
Conceptual Phase

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Chapter 4: Performance Considerations

• Achieve water efficiency through several technology options.

• Be effectively differentiated by the WaterSense label.

• Obtain independent, third party certification.

Even in regions of the country where water scarcity is not as large a concern, water quality may be. 

Rural and urban areas alike have sources of water contamination, including pesticide/chemical runoff, 

sediment and runoff near large cities and busy roadways, dumps and landfills, some types of energy 

production, and a host of other consequences of human activities. Often water use rights are also a 

political issue and demands, such as drinking water versus agricultural uses versus energy production, 

each compete for the limited resource. Numerous examples show that water is piped long distances 

from the source to areas with greater population or demand. So, regardless of where your building 

is located, it is important to give consideration to water-conserving plumbing fixtures, faucets, and 

outdoor use.

Health/Indoor Air Quality

Because Americans spend most of their time indoors—90 percent 

according to a 1989 EPA study2—indoor air quality has become an 

increasing health concern. Some attribute increasing severity of asthma 

symptoms in children to higher levels of indoor particulate matter.3

 As building envelopes become tighter and more efficient, fresh air needs 

to be introduced in a controlled manner. The International Code Council 

recognized the need for fresh air in tight buildings and has incorporated 

related requirements into the code. The EPA Indoor airPlus program offers 

guidance and certification for homes built with comprehensive indoor air 

quality measures.

As a building owner or manager of a public housing facility, whether it is a 

single-family home or multifamily unit, your building may pose special conditions regarding indoor air 

quality. The building and mechanical systems may be old, giving rise to specific air-quality concerns; 

dirt and particulate matter may have accumulated over the years; and some locations may have 

more residents who are likely to smoke. As you plan new construction or renovation projects, give 

consideration to the ways you might address or avoid indoor air-quality concerns. Examples include—

1. Are the finishes such as paints, carpets, and wall coverings low- or no-VOCs and free from other 

potentially harmful contaminants such as formaldehyde?

Have you checked the radon levels in the soil around your building?

2. Can local exhaust fans in bathrooms and kitchens be upgraded?

3. Can new or existing duct runs be shortened or hard ducted to move air more effectively?

4. Can some type of whole building mechanical ventilation be included?

5. Are windows easily operable to provide natural ventilation?

2

 U.S. Environmental Protection Agency. 1989. Report to Congress on indoor air quality: Volume 2. EPA/400/1-89/001C. 

Washington, DC.

3

 Johns Hopkins University, 1989. Indoor Air Pollution Increases Asthma Symptoms. Baltimore, MD.
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Chapter 4: Performance Considerations

Scoping Phase

Like some building certification programs that focus on energy, sustainability, and security, some 

voluntary programs recognize healthy homes. Again, regardless of whether you decide to pursue 

formal certification, the program guidelines can provide useful educational tools as you plan your 

project and select technologies.

Scoping Phase—Product Selection and Review

ü Identify and Prioritize Project 

Goals and Objectives

ü Perform initial research

ü Review manufacturer’s 

specifications and professional 

perspectives

ü Consult with your team

ü Check product labeling, 

certification, and testing

ü Evaluate the contractor/installer

Identify and Prioritize Project Goals and Objectives

What is the driving force behind the project? Is it a failed 

piece of equipment? Are you taking advantage of a recently 

advertised incentive program? What are the desired performance attributes you hope to obtain from 

the technology?

To know what technology is going to be the best fit for your project, you must first identify what your 

project is and why you are doing it. For example, maybe you have not replaced any windows in the 

building because it was built 50 years ago. You just found out that another window has cracked, leaving 

you with more broken windows in the building than working ones. You ultimately decide that now, 

because of failing equipment, it is finally time to replace all the old windows.

Now you need to decide what kind of windows you want. Have you been losing a lot of heating and 

cooling through your windows? Maybe you have a new HVAC system but have not been able to see 

the energy savings because most of the energy was being lost through the old broken windows. In that 

case, you might want to go with windows with ENERGY STAR-rated windows that will better accompany 

your efficient HVAC system. Whatever the case may be, you need to start identifying the different 

needs and desired attributes you want from a technology. You can start to categorize these attributes 

into two groups: (1) those you NEED and (2) those that would be NICE TO HAVE.

Perform Initial Research

Now that you know what your project is and have determined what performance attributes you desire, 

you can begin performing some initial research on the different technologies that will apply. Internet 

searches, web reviews, and consumer publications are all good places to start your research. Check 
Innovative Building Technology Guide | 58

Chapter 4: Performance Considerations

Scoping Phase

out what other people are saying about these technologies to get a feel for how they might operate. 

Although information from manufacturers will certainly be important, these channels are a great way 

to get an idea of real user interaction with the technologies.

If you have not already started searching for any relevant rebate or incentive programs for that type 

of technology, you should start now. In many cases, rebate and incentive programs will permit a wide 

range of products under a specific technology category. Some may limit it to ENERGY STAR-certified 

products for example, but generally you will have a number of different options to choose from. 

Specifying the exact product you will use will not come into play until you are a little farther down 

the road, but you need to identify any financial support programs you might be eligible for a given 

technology.

Performing this initial third party research will begin to narrow the scope of the technologies that will 

achieve your desired results and are within budget.

Review Manufacturer Specifications and Professional Perspectives

After you have performed some initial research and have identified a couple of different options 

for your project, your next move is to further investigate these technologies to see how they stack 

up against each other. The initial research you performed weeded out some options right off the 

bat, enabling you to focus on those that best fit your project. Get a closer look at these identified 

technologies to help you weigh the pros and cons of each when it comes time for a final decision. You 

can use a number of sources to further examine the applicability of these technologies.

Manufacturer’s Literature

A good place to start your review is with the product specifications, brochures, and other materials 

available directly from the manufacturer. Reviewing the manufacturer literature can help you 

determine if the technology is going to be a fit for your project. You need to make sure that the 

technology you are researching will be compatible with the other components in your building. 

Remember, think of your building as a whole rather than the sum of its parts. The various components 

interact with each other on a daily basis and can significantly affect how each performs. Simply because 

a technology provides your desired attributes does not mean it will work for your building.

At this point, you can also review what third party certifications a particular technology has earned. 

A number of agencies and companies test and certify various products for performance measures for 

every type of technology. Products that earn certification marks or labels from third parties provide a 

level of assurance that a product is going to meet a certain set of criteria or standards of performance.

Professional Perspectives

As a building owner or manager, one of your best sources of information is the professional who has 

first-hand experience with the technology. Reaching out to contractors, labor specialists, other building 

owners, and tenants will enable you obtain a better perspective on how the technology has worked in 

other applications that might be similar to your project. You should identify local projects that are using 

these technologies and talk with both the tenants and owners/managers to gain their perspectives. 

These opinions may differ. Maybe the building owner likes his new HVAC system because it saves 

him money on energy bills; however, the tenants may complain that the temperature of their units is 

uncomfortable. A building owner may be considering an innovative faucet, but a professional review of 

that specific product or model may reveal the unit is difficult to maintain.
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Chapter 4: Performance Considerations

Scoping Phase

You should also look to see what skilled labor is locally available to you. It may be that nobody in your 

area has ever used this technology making installation of technology expensive or run the risk of it 

being done improperly. These professionals are also a great source of information. The people who 

handle these technologies on a regular basis are likely the ones who have the strongest opinions on 

which ones perform the best, are the most reliable, and will last the longest.

Another important contact to make is with your local code official. He/she will know whether a 

technology will be compliant with the local building code. In addition, they are likely to see the 

technology through a different lens and might be able to give you an alternative point of view. Learning 

how these different professionals view a certain technology will help make you feel more comfortable 

when you ultimately make your choice.

Consult With Your Team

After performing a more indepth review of various technologies, talk with your team and weigh 

your options. Your team will include those who are directly involved in designing, developing, and 

implementing your project. It is critical to include each team member in your decisionmaking process, 

because they are the ones who will execute the plan. They will be able to determine what is needed 

and what will work best for the project.

Your team also includes all those who will be affected by the project, such as the building maintenance, 

security, and residential staffs. It is likely that all these people will have different viewpoints, desires, 

and opinions related to the project. A member of the maintenance staff, for example, is likely to heavily 

emphasize reliability and durability, while a residential staff employee might push for technologies with 

better indoor air quality for a healthier environment.

All the information you have gathered to this point for each technology should be organized and 

evaluated by you and your team. Develop a list of the pros and cons of each option and determine 

how they compare with the goals, objectives, and desired performance attributes you previously 

identified. Be sure to consider the economic and feasibility aspects of the technology as well. Although 

performance is important, combining evaluations of these three considerations will enable you to make 

the best decision for your project.

Check Product Labeling, Certification, and Testing

What does product certification or labeling mean?

A product certification or label indicates third party testing or review regarding a particular attribute 

or performance metric in addition to ongoing oversight and inspection of the manufacturing process 

to ensure consistency and quality are maintained. A certification provides assurance that a product 

or material will meet certain standards of performance related to attributes such as fire or life safety, 

energy efficiency, water efficiency, and environmental sustainability. In some cases, a product may hold 

a certification regarding overall quality, such as the Quality and Performance Mark by Intertek. In many 

cases, some of the same companies that perform product testing also offer product certifications. The 

federal government also offers product certifications or labels such as the EPA’s ENERGY STAR or Water 

Sense labels. The following labels frequently appear on building products, equipment, or appliances.
Innovative Building Technology Guide | 60

Chapter 4: Performance Considerations

Scoping Phase

Agency/Company Logo Type of Certification

AAMA4 Windows and doors

AHRI5 Heating and Refrigeration equipment

ASTM6 International Varied standards of performance

ENERGY STAR Energy performance

Factory Mutual Industrial and commercial product testing to prevent against 

loss-insurance industry associated

Home Innovation Research 

Lab Accessibility, insulation, plumbing products, green

Intertek Product safety, performance, and quality

NFRC7 Thermal performance, visible transmittance of windows and 

doors

UL8 Life safety

List may not be exhaustive of all certifications available for building products. 

4

 American Architectural Manufacturer Association

5

 Air-conditioning, Heating, and Refrigeration Institute

6

 American Society for Testing and Materials

7

 National Fenestration Rating Council 

8

 Underwriters Laboratories

Are product certification and product testing the same?

No. Product testing is more a snapshot in time that demonstrates a product performed to a particular 

standard when it was tested. Certification, on the other hand, involves ongoing oversight of the 

manufacturing process and product sampling to ensure that a uniform level of performance and quality 

is maintained over time. Certification is likely to cover a broader range of performance attributes than 

testing to a single standard. When evaluating a certification, make sure that the certification agency 

is ISO accredited by an agency approved by the International Laboratory Accreditation Agency. Do 

the same for product testing laboratories that you may encounter when reviewing manufacturers’ 

literature. A comparison from the website of NTA Testing, Inc. (www.ntainc.com) provides a good 

comparison of the differences between testing and certification.
Innovative Building Technology Guide | 61

Chapter 4: Performance Considerations

Scoping Phase

Building Product 

Certification

Building Product 

Testing

Generates data using nationally recognized standards (test report) X X

Provides performance data for a product. X X

Includes continual assessment of a product over time. X

Requires an in-house quality system inspected by a third party 

agency.

X

Provides evaluation beyond a test standard (evaluation or listing 

report).

X

Table 1: Source: http://blog.ntainc.com/topics/building-products

Although in-house testing may certainly be reliable, it does not carry the weight or offer the assurance 

of testing by an outside third party. Third party testing and certification provide a level of confidence 

that a product will perform according to the manufacturer claims. As a building owner, the verification 

provided by an independent third party gives you confidence that the manufacturer’s claims regarding 

performance relative to a specific attribute are warranted. Keep a few things in mind, however—

1. Products are most often tested in a laboratory situation—not as they are typically installed in the 

field.

2. Products are typically tested in isolation—not as they behave in a building assembly alongside of 

other materials.

3. Products are tested with respect to their behavior under a very specific set of conditions. Thus, test 

standards do not warrant the overall quality of a product or material; they warrant only its ability to 

withstand certain effects, exposure, and so on.

4. Neither product testing nor product certification automatically implies that the product meets the 

international building code or is accepted by your local code official.

Evaluate the Contractor/Installer

Confidence regarding the performance of a particular product or technology is only part of the equation. 

If a great product is installed poorly or improperly, you will end up with a poor result that does not meet 

your expectations. Your contractor(s) needs to be qualified and skilled in the product or technology area 

for which he is performing work. You can gain confidence in several ways.

References. Local references are probably one of the best ways to verify a contractor’s experience and 

his ability to complete work on time and within budget. Be sure to check with multiple sources and make 

sure the scope and type of work were similar to those he will be performing for you. Although he may 

give you only the names of satisfied customers, it is usually fairly evident if they have reservations.

Licenses. Requirements for general and trade contractors’ licenses vary by state and by jurisdiction 

and by the particular trade. Although some states require builders and general contractors to hold a 

license, in other cases, particular municipalities require a license. Trade contractor licensing is most often 

found for the electrical or plumbing trades. The National Association of States Licensing Agencies tracks 

contractor-licensing requirements and has an interactive map in which you can search requirements 

by state. The National Association of Home Builders maintains similar information about all licensing 

required in a given state.
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Chapter 4: Performance Considerations

Scoping Phase

http://www.nascla.org/

http://www.nahb.org/directory.aspx?directoryID=1836

Keep in mind that licensing requirements may simply be a registration requirement to track building 

professionals within the state. Or, it may carry education requirements and, thus, mean that the builder 

or contractor has completed a certain amount of training—sometimes more business oriented than 

skill oriented. Regardless, it is important to find out if a license is required and, if it is, what the license 

means in terms of qualifications and also to find out if the contractor or builder you are considering is 

in good standing in the eyes of the state board.

Association Membership. Although not a guarantee of quality workmanship, membership in a 

professional association, such as the National Association of Home Builders or one of the remodeling 

councils, is an indication of commitment to the building profession. Check your local chapter of these 

associations to find out who are members in your area. These associations usually offer training, 

education, and certifications in the following subjects:

• Certified Graduate Builder.

• Certified Graduate Remodeler.

• Certified Green Professional.

• Graduate Master Builder.

To find out more about these designations, go to http://www.nahb.org/page.aspx/category/

sectionID=119.

Other Certifications

Home Energy Rating System (HERS) Rater. A HERS rater is typically associated with the ENERGY STAR 

Homes Program as one who inspects and tests the energy-efficiency features of your building to verify 

compliance with program standards. The rater will model the building using approved software to 

determine the HERS score, verify that the specified equipment and materials were installed properly, 

and complete the necessary paperwork for your project to be formally recognized at the state or 

national level. To become a HERS rater, one must complete training under a HERS provider approved 

by the Residential Energy Services Network (RESNET) and must complete multiple supervised onsite 

ratings.

RESNET is a not-for-profit membership corporation that is a recognized national standards-making body 

for building energy-efficiency rating and certification systems in the United States This RESNET link will 

direct you to further explanations regarding the advantages of working with a HERS professional and to 

information that will help you identify raters in your area http://www.resnet.us/certified-auditor-rater.

Building Performance Contractor. The Building Performance Institute administers several designations 

for residential contractors having particular training and expertise in building performance—specifically 

energy efficiency, combustion safety, air sealing, and HVAC system performance. BPI certifications 

include the following designations, among others:

• Building Analyst

• Envelope Professional
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Chapter 4: Performance Considerations

Design Phase Scoping Phase

• Heating

• Air Conditioning and Heat Pump

• Manufactured Housing

• Multifamily

All certified contractors must initially attain the building analyst designation and then may move on 

to one of the more specialized areas. BPI has also developed more advanced certifications for auditor, 

installer, crew leader, and quality control. Visit the BPI website to learn more about the designations 

and how this expertise can enhance the performance of your project at www.bpi.org/professionals.

In general, BPI certifications are primarily geared to existing buildings and retrofit work, while ENERGY 

STAR raters are trained for inspection and verification of new homes. Yet, each carries an emphasis on 

ensuring that certified professionals have a solid understanding of building science and how different 

systems in a building interact.

Keep in mind that a formal, third party certification is only one indicator or path to expertise and high 

quality. Many builders, remodelers, and trade contractors have developed skills through trade journals, 

Internet research, conferences, and simply longstanding experience.

Design Phase—System Integration

During the design phase, performance considerations are studied in context of how an innovation 

interacts with the other systems around it and with the building as a whole. Innovations can be 

optimally designed into a system that maximizes the performance of that innovation. When you are 

considering use of an innovation, three basic levels of rigor can be applied during the design phase.

At the high-level review, you would use software to 

analyze how the entire building would function from 

a building science perspective and how that function 

would change with the addition of an innovation. 

If the desired attribute of the innovation is energy 

efficiency, a whole building energy simulation would 

show the energy saved by that innovation in context 

with the rest of the building. If hurricane resistance 

was the desired attribute, a performance calculation 

of wind load resistance of the entire system including 

the innovation would show if the product helped reach 

the desired level of performance. These procedures 

are complex and would likely require specialized 

staff or outside professionals to complete. These 

procedures should definitely be used when building 

new construction.

Many projects will probably fall into the medium-level 

review. This review includes a step-by-step analysis 

considering how to optimally use the innovation, but 

without a whole building modeling. A standardized 

set of questions at this level will help ensure that all 
Innovative Building Technology Guide | 64

Chapter 4: Performance Considerations

Design Phaseimportant issues are considered. An example of this assessment might be considering changing from 

a wood to a steel framed wall to increase structural integrity, but in considering other effects, you 

discover the need to add insulation to reduce heat loss across the more conductive framing material.

A low-level review would simply be considering the technology as a stand-alone system and optimally 

using that innovation without consideration for other systems. An example in which this level of review 

might be appropriate would be changing appliances (such as a dishwasher or refrigerator) and 

considering the performance characteristics (such as efficiency and durability) in selecting the item, but 

not taking the analysis any further. In this example, the low-level analysis is probably appropriate, given 

the limited effect these systems would have on other systems in the home or building.

Project Example: New Construction

You are planning to develop a new site, the first phase of which will be 12 two-family townhomes. The 

architect suggests that you consider a particular type of sprayfoam insulation for the exterior walls and 

that you also use the sprayfoam in the rafters to create an unvented attic. What considerations should 

you take into account and where should you go to find reliable information regarding performance?

Must Have Would Like To Have

R-3.0 or more per inch R-value more than R-3.0 per inch

Resistant to air flow or compatible with air-sealing 

system

Sound deadening

Able to meet or exceed code requirements regarding 

total insulating value and fire resistance

Easy to install/forgiving

Not susceptible to mold growth Resistant to moisture

Not susceptible to damage from rodents/pests

Fire resistance characteristics and ratings

Cost effective/within project budget
Innovative Building Technology Guide | 65

Chapter 4: Performance Considerations

Design Phase

1. Identify the characteristics you are looking for in an insulation product. Lay out the attributes that 

you must have and those that you would like to have, but might be willing to compromise on. For 

example:

2. Review manufacturer’s literature and claims.

3. Perform Internet search for product applications and for unvented attics. 

4. Has the product undergone any testing by recognized outside third parties?

5. Has the product been locally installed? Are there local examples of unvented attics?

6. Who are the local installers of the product? What are their qualifications?

o Length of time in business.

o References.

o Certifications, training in product installation.

7. Is the product recognized/acceptable to the 

local code official? 

8. What are the cost implications of using this 

product versus the lowest cost option? 

9. Does using the sprayfoam obtain additional 

benefits versus a conventional, lower cost 

option?

Examples:

Offers added structural integrity to wall and roof 

system. 

Air sealing function is integral to insulating function.

Project Example: Renovation of Existing 

Building 

When considering an innovative technology for an 

existing building, many elements that go into the decisionmaking process will be the same as for new 

construction regarding performance issues. Of course, you will want to—

• Review manufacturers’ literature regarding performance, reliability, and longevity; compare with 

other product options.

• Identify third party testing that has been performed and product designations, if any.

• Perform an Internet search to gain perspective on broader experience nationwide.

• Identify examples of local installations.

• Identify local installers and their qualifications.

In addition, however, an existing building will warrant additional considerations simply because of the 

need for the technology to “fit in with” the systems and materials that are already in place and not 

planned as part of the renovation. It is also important to ask the following questions regarding your 

maintenance staff and the current residents of the building.

Manufacturer’s Literature

 Read the fine print.

 Be wary of unrealistic claims.

 Read warranty language and 

conditions.

 Look for third party testing or 

endorsement.

 Look for case studies.
Innovative Building Technology Guide | 66

Chapter 4: Performance Considerations

Design Phase • Does the maintenance staff have the skills to perform routine maintenance and troubleshooting?

• Do the residents have the skills and knowledge to operate the system properly, or can they develop 

the knowledge?

• What are the consequences if either of these 

groups fails to maintain or operate the system 

properly? Would such a failure result in complete 

breakdown or simply less than optimum 

performance?

Project Example: Space-Heating/Cooling 

Equipment Replacement

You are planning to replace 30-year old gas 

furnaces and wall-mounted air-conditioners in your 

multifamily apartment building in Maryland. One of 

the requirements of funding is that the equipment 

must be ENERGY STAR labeled. You are trying to 

decide between a 95-percent efficient furnace and 

an ENERGY STAR window-mounted air-conditioner or 

a dual-fuel heat pump that provides central cooling 

in the summer and heats via a heat pump in winter 

until outdoor temperatures fall below about 40 o

F 

when it then cycles into gas mode. If you replace 

the thermostat, the code official will likely require a 

programmable thermostat.

Because the furnace/air-conditioner combination 

maintains the same basic type of equipment, you feel 

comfortable that it will perform well with greater 

efficiency than what currently exists, that it will be 

reasonably familiar to your maintenance staff and 

residents because it does not deviate significantly 

from the operational elements they are accustomed 

to, and that it is likely to be at least as reliable and 

long lived as the existing equipment was.

From what you have read, however, the dual-fuel 

equipment has some compelling advantages, such 

as reduced operating costs because of partial winter 

heating in heat pump mode plus greater comfort in 

the summer because of central cooling. In addition, 

the maintenance staff will not have to remove and 

replace window air-conditioners each spring and fall. 

Yet, given the senior occupants, you are concerned 

that they may not “feel” warm enough under winter 

heat pump operation and they may not use the new programmable thermostats correctly. This scenario 

could significantly affect the anticipated energy and operating cost savings. How to decide—

Case Study

How do I work this 

thing again?

A nonprofit organization renovated 

a group home to cut operation costs 

from energy use. They installed new 

windows, improved air sealing, and 

changed the HVAC system to a new 

highly efficient unit. So why were their 

energy costs still so high?

After talking with staff at the group 

home, it was discovered that 

maintenance personnel were adjusting 

the set point on the thermostat 

whenever any room became 

uncomfortable. The thermostat was set 

to 80 oF in the winter, eliminating the 

possibility of any energy savings from 

the new efficient unit.

Lesson Learned

Training With 

Technology

When implementing any new 

technology, make sure the user 

understands how it works. Without 

some training, the benefits from 

innovations can be lost.
Innovative Building Technology Guide | 67

Chapter 4: Performance Considerations

Implementation Phase Design Phase

• Look for examples of dual-fuel heat pumps in your area and installations where seniors live.

• Talk with your HVAC contractor about his experience with the equipment and whether he has 

encountered any issues.

• Consult with your maintenance personnel asking them to review literature and specs and provide 

their input.

• Consult with your code official about his experience with the equipment.

• Can you implement other efficiency measures to ensure comfort, such as—

o Air sealing?

o Seal ductwork?

o Replacement windows?

o Increase insulation levels?

• What type of training can you provide to bring residents up to speed on use of new thermostats and 

tips on achieving both comfort and energy efficiency?

• What type of routine checks or inspections can you put in place to ensure proper operation?

• Implement a pilot whereby the equipment and programmable thermostats are installed in a subset 

of apartments to help gauge appropriateness.

• Perform an economic analysis to compare the two alternatives.

Implementation Phase—Verification

For any innovation used in a new or existing building, verification 

of performance is important. Integrating new technologies 

without increased performance will merely add cost to a project, 

with no benefit. Several options need to be considered during 

any project with a performance goal. Depending on the level of 

performance needed, and the extent of the project, one or more 

of these options may be appropriate.

At a minimum, a quality installation checklist should be used to 

ensure proper installation of the innovation. This checklist should 

include—

• Construction details designed for optimal performance.

• The manufacturers’ installation instructions, which will often 

be linked to warranty requirements.

• Any code requirements identified during the feasibility 

review.

For a more rigorous level of verification, some technologies can be tested to ensure that they are working 

properly. For example, if air-sealing innovations are used in a building, a contractor can conduct a blower 

door test to ensure that the desired target for air tightness has been reached. For lighting innovations, 

a foot-candle test can be conducted to measure the achieved brightness of the lighting. When specific 

testing is not possible, inspections of the installers work can help add more assurance that the innovation 

was properly installed. These inspections could be conducted by a third party inspector, or they could 

simply be conducted by an internal inspector as part of a quality program.
Innovative Building Technology Guide | 68

Chapter 4: Performance Considerations

Implementation Phase

Finally, verifying the actual performance as the innovation is used by the occupants can help determine if 

the innovation is working as advertised or as designed. For example, a building owner who pays tenant 

utilities may be interested to see the actual energy reduction resulting from a new, efficient lighting 

system. Monitoring equipment could be installed to measure the actual energy use by that lighting 

equipment. For a new dehumidification system, occupant surveys could be conducted before and after 

installation to determine the effect on comfort. For a homeowner using a new innovation, simply taking 

notes on the noted performance of the innovation will help keep a record of how well it worked.
Innovative Building Technology Guide | 69

Chapter 4: Performance Considerations

Appendix: Evaluation Tools and Resources

What Are You Looking For?

Consideration

Economics

Simple payback

Cashflow

LCCA

Value engineering

Operating costs

Feasibility Code compliance

Climate-based resources

Geographic resources

 High winds/hurricanes

 Flooding

 Earthquakes

 Termites

 Wildfire

Performance

Desired attributes

 Disaster resistance

 Durability

 Health/indoor air Quality

 Sustainability/green

 Maintenance

 Water efficiency

Building components

 Ceiling/roof

 Foundation

 Electrical/lighting

 Exterior wall

 HVAC

 SMART® technologies/

controls

 Water heating/

plumbing/piping

 Windows/doors
Innovative Building Technology Guide | 70

Chapter 4: Performance Considerations

Economic Tools and Resources

Simple Payback 

Economic 

Tool and Resource Description Link

U.S. Department of the 

Interior: Calculating 

Payback

This resource offers guidance on standard 

methods for calculating payback. Calculating payback

U.S. Department of 

Energy’s (DOE’s) Federal 

Energy Management 

Program (FEMP) Energy 

Cost Calculator for 

Compact Fluorescent 

Lamps (CFLs)

This user-friendly tool calculates energy savings 

related to CFLs and will calculate the energy 

savings potential of lighting upgrades.

CFL calculator

U.S. Environmental 

Protection Agency’s 

(EPA’s) ENERGY STAR 

Calculators

This tool calculates the potential energy savings 

of a proposed project compared with the average 

available non-ENERGY STAR new products. 

Efficiency calculators

Cashflow

Economic

Tool and Resource Description Link

Good Mortgage 

Investment Property 

Calculator

This tool provides a guide to possible financial 

outcomes of the purchase and rental of an 

investment property.

Investment property 

calculator

Rental Cash Flow 

Analysis Worksheet

This step-by-step template for and guide to 

conducting cashflow analysis for a rental property 

includes separate worksheets for income, 

expenses, loans, and debt, and it gives the user an 

overall cashflow analysis of the rental property.

Cashflow spreadsheet 

template

Investment Property 

Analysis

This resource serves as a primer on how to look 

at investment property. It provides only a general 

example, and any property will have more factors 

to look at, but this analysis provides the basics on 

how to begin an analysis of investment property.

Property analysis
Innovative Building Technology Guide | 71

Chapter 4: Performance Considerations

LCCA

Economic

Tool and Resource Description Link

U.S. General Services 

Administration: LifeCycle Cost Analysis 

(LCCA)

This resource introduces LCCA and discusses the 

methodology, procedures, and approach behind 

conducting this type of analysis. 

LCCA

LCCAid: Life-Cycle Cost 

Analysis (LCCA) for 

Integrative Design

This LCCA tool provides an easy-to-use method 

to conduct LCCA for building design professionals 

(architects, engineers, and energy modelers) who 

have little or no previous experience with financial 

analysis. 

LCCAid

L-Cycle: The Lifecycle 

Cost Modeling Tool

This tool estimates whether a property’s 

replacement reserve balance will effectively be 

able to cover the cost of repairs, replacements, 

and renovations over time. 

L-cycle

National Institute 

of Standards and 

Technology (NIST) 

Building Life-Cycle Cost 

Program

This tool evaluates water and energy cost savings 

and renewable energy projects. BLCC

Whole Building Design 

Guide: Life-Cycle Cost 

Analysis

This resource provides an introduction to 

performing an LCCA and best practices for when 

to use this type of economic evaluation.

LCCA
Innovative Building Technology Guide | 72

Chapter 4: Performance Considerations

Value Engineering

Economic

Tool and Resource Description Link

Whole Building Design 

Guide: Value Engineering 

(VE)

This resource provides an introduction to VE and 

best practices for how to effectively use VE for 

building projects. 

Value engineering

SAVE International: 

What is VE?

This resource provides guidance and example 

methodologies for conducting VE analysis. SAVE

Green Building Advisor: 

Advanced Framing

This blog discusses the pros and cons of using 

advanced framing techniques, a common VE 

application in the construction industry.

Advanced framing 

pros and cons

Operating Costs

Economic

Tool and Resource Description Link

U.S. Environmental 

Protection Agency’s 

(EPA’s) ENERGY STAR 

Portfolio Manager

This tool provides possible improvements for 

reducing consumption and monthly operating 

costs. 

Portfolio manager

Bright Power 

EnergyScoreCardsTM

This online tool helps track building energy and 

water use, benchmarking one building against 

other similar building types in the same climate 

and recommending upgrades that will reduce 

consumption. 

EnergyScoreCardsTM

WegoWise Energy 

Benchmarking

This software tool benchmarks the energy 

consumption of a building and tracks and analyzes 

the usage of that building. 

WegoWise
Innovative Building Technology Guide | 73

Chapter 4: Performance Considerations

Feasibility Tools and Resources

Code Compliance

Feasibility

Tool and Resource Description Link

Architectural Testing: 

Code Compliance 

Research Report (CRR)

This report provides code and building 

officials with evidence, technical information, 

and professional evaluations to determine if 

products, components, and systems meet code 

requirements. 

ATI

ICC Evaluation Service

The ICC Evaluation Service is one of the better 

known code evaluation services. This resource 

provides manufacturers with code-compliance 

evaluations and testing for products. The service 

publishes reports about compliance evaluations 

for public use. 

ICC-ES

Intertek Code Evaluation 

Services

Intertek provides manufacturers with code 

compliance evaluations and testing for products. 

This service publishes reports about compliance 

evaluations for public use.

Code Evaluations 

Structural Building 

Components Research 

Institute (SBCRI)

This resource performs product and assembly 

testing and provides code-compliance services. SBCRI

Underwriters 

Laboratories (UL) 

Evaluation Service 

Reports

These resources help manufacturers get 

their product to market faster and with more 

confidence. The evaluation reports reveal findings 

from UL’s testing and analysis of the products to 

ICC-ES Acceptance Criteria and evaluate them for 

code compliance. 

UL evaluation 
Innovative Building Technology Guide | 74

Chapter 4: Performance Considerations

Geography-Based Resources

Hurricanes/High Winds

Feasibility

Tool and Resource Description Link

Building Science Digests:

Flood and Hurricane 

Resistant Buildings

This resource discusses lessons learned from flood 

and hurricane disasters and provides guidance 

for building better, more resilient homes in these 

high-risk areas. 

Flood- and hurricaneresistant buildings

Hurricanes/High Winds

Feasibility

Tool and Resource Description Link

Against the Wind: 

Protecting Your Home 

from Hurricane Wind 

Damage

This document discusses protecting the home 

from hurricane and wind damage. Against the Wind

Coastal Construction 

Manual: Principles and 

Practices of Planning, 

Siting, Designing, 

Constructing, and 

Maintaining Residential 

Buildings in Coastal Areas

This manual provides guidance for designing 

and constructing residential buildings in coastal 

areas that will be more resistant to the damaging 

impacts of natural hazards. 

Coastal Construction 

Manual

Flooding

Feasibility

Tool and Resource Description Link

Design and Construction 

in Coastal A Zones

This document recommends design and 

construction practices in coastal areas where 

wave and flood conditions during the base flood 

will be less severe than in V Zones but where such 

conditions can still cause significant damage to 

typical light-frame construction.

Coastal A Zones

Whole Building Design 

Guide (WBDG) Flood 

Resistance of the 

Building Envelope

This resource provides design and construction 

best practices for flood resistance.

WBDG flood 

resistance 
Innovative Building Technology Guide | 75

Chapter 4: Performance Considerations

Geography-Based Resources

Flooding Continued

Feasibility

Tool and Resource Description Link

American Society of Civil 

Engineers (ASCE) 24: 

Flood Resistant Design 

and Construction

This resource highlights the requirements of ASCE 

24 referenced in the International Building Code 

regarding minimum requirements and expected 

performance for the design and construction of 

buildings and structures in flood hazard areas.

Flood-resistant design 

and construction

Earthquakes

Feasibility

Tool and Resource Description Link

FEMA 232: A 

Homebuilders’ Guide to 

Earthquake-Resistant 

Construction

This publication presents seismic design and 

construction guidance for one- and twofamily houses in a manner that home builders, 

knowledgeable homeowners, and other 

nonengineers can use. 

Earthquake-resistant 

construction

Faultine: Damage Control

This resource provides guidelines for building 

and retrofitting to mitigate damage caused by 

earthquakes. 

Damage control

Termites

Feasibility

Tool and Resource Description Link

Termite Prevention: 

Approaches for New 

Construction

This resource addresses approaches and steps to 

take during renovations and new construction to 

help reduce the likelihood of termite problems.

Steps to reducing 

termite damage

Termite Resistant 

Construction and 

Building Materials

This resource addresses current developments 

and trends contributing to the construction of 

termite-resistant buildings, particularly regarding 

control of the Formosan subterranean termite.

Termite-resistant 

construction

Preventing Termite 

Infestations

This resource presents best practices in design, 

construction, and building materials to prevent or 

reduce termite infestation.

Termite prevention
Innovative Building Technology Guide | 76

Chapter 4: Performance Considerations

Geography-Based Resources

Wildfire

Feasibility

Tool and Resource Description Link

Fine Homebuilding: FireResistant Details

This report presents studies of homes that 

survived the 1993 Laguna Beach firestorms to 

yield lessons in building to withstand heat.

Fire-resistant details

Designing Your Home To 

Survive Wildfires

This report provides basic architectural design 

decisions to greatly improve chances of a home’s 

survival during a wildfire.

Surviving wildfires

California WildlandUrban Interface (WUI) 

Code

This resource highlights the requirements and 

standards set in California’s WUI code.

Wildland-urban 

interface code

2012 International 

Wildland-Urban Interface 

(WUI) Code

This resource highlights the requirements of the 

2012 international WUI code.

International 

wildland-urban 

interface code

Climate-Based Resources

Feasibility

Tool and Resource Description Link

Building America 

Climate-Specific 

Guidance

This resource demonstrates real-world solutions 

for improving the energy performance and quality 

of new and existing homes in five major climate 

regions. 

Climate-specific 

guidance

10 Steps to ClimateResponsive Building 

Design

This site provides basic steps for designing a 

building that will optimize the potential of a 

specific site and reduce energy consumption 

based on different climates.

Climate-responsive 

design
Innovative Building Technology Guide | 77

Chapter 4: Performance Considerations

Performance Tools and Resources

Desired Attributes

Disaster Resistance

Performance

Tool and Resource Description Link

Insurance Institute for 

Business and Home 

Safety: Fortified Homes

This resource provides design guidance and 

criteria for building or renovating homes for 

disaster resistance.

Fortified Homes

Federal Emergency 

Management Agency 

(FEMA) Best Practice 

Portfolio: Mitigation

This resource provides mitigation stories that 

describe measures individuals and communities 

have taken to reduce the loss of life and property 

from disasters. 

FEMA Best Practices

FEMA: Protect Your 

Property

This resource instructs property owners and 

contractors about construction techniques 

to protect their property, home, or business 

from disaster with short, easy-to-understand 

pamphlets. 

Protect Your Property

Whole Building Design 

Guide (WBDG): Secure/

Safe

This resource explains the interrelationship of 

disaster resistance and security with other WBDG 

design objectives early in the design process 

to help overcome the obstacles commonly 

encountered in achieving a secure and safe 

building.

Natural hazards and 

security

Durability

Performance

Tool and Resource Description Link

Resilient Design Institute

This resource provides guidance and design 

solutions related to disaster resistance and 

resilience related to buildings, communities, and 

infrastructure.

Resilient Design 

Institute
Innovative Building Technology Guide | 78

Chapter 4: Performance Considerations

Desired Attributes

Durability Continued

Performance

Tool and Resource Description Link

ResilientCity.org: Building 

Design Principles

This resource provides guidance and design 

solutions related to disaster resistance and 

resilience related to buildings, communities, and 

infrastructure.

Building Design 

Principles

Durability by Design: A 

Guide for Residential 

Builders and Designers

This manual addresses building durability as a 

design consideration in housing. Durability by Design

Health/Indoor Air Quality

Performance

Tool and Resource Description Link

U.S. Environmental 

Protection Agency (EPA) 

Indoor airPLUS Program

Building on the foundation of EPA’s ENERGY 

STAR requirements for new homes, this resource 

provides additional construction specifications 

to provide comprehensive indoor air-quality 

protections in new homes.

Indoor Air Plus

The Inside Story: A Guide 

to Indoor Air Quality

These publications and resources provide 

information about indoor air quality, how it 

affects a homeowner, and best practices for 

improving air quality in a building.

Guide to Indoor Air 

Quality

American Lung 

Association: Healthy Air

This resource offers important indoor air 

quality factors to consider when constructing or 

retrofitting a home.

New construction and 

remodeling tips

Sustainability/Green

Performance

Tool and Resource Description Link

U.S. Environmental 

Protection Agency (EPA): 

Green Building

This online site provides information about green 

building practices. Topics include components 

of green building, building types, and funding 

opportunities.

EPA Green Building
Innovative Building Technology Guide | 79

Chapter 4: Performance Considerations

Desired Attributes

Sustainability/Green Continued

Performance

Tool and Resource Description Link

BuildingGreen, Inc.

This resource combines information with insight, 

convening conversations and generating knowledge 

to help building industry professionals and 

policymakers improve environmental performance 

and reduce the adverse effects of buildings.

BuildingGreen

GreenBuildingAdvisor.

com]

This online resource provides information about 

designing, building, and remodeling energyefficient, sustainable, and healthy homes. Green basics

GreenSpec Building 

Products

This resource lists more than 2,600 green 

building products. The editorial team selects all 

products based on their independent research 

that assesses manufacturers’ claims. 

GreenSpec

American Institute 

of Architects (AIA) 

Affordable Green 

Guidelines

This resource offers design guidance to architects 

related to green building. Green criteria

Enterprise Green 

Communities

This resource helps developers, investors, 

builders, and policymakers make the transition to 

a green future for affordable housing. 

Green resources for 

housing 

Maintenance

Performance

Tool and Resource Description Link

STRUCTURE magazine

This resource disseminates useful tips, tools, and 

techniques that will help structural engineers 

increase the quality, productivity, and profitability 

of their work, and it introduces new and 

innovative concepts in structural engineering.

Structure resources

American Financial 

Resources official blog

This resource provides tips for a low-maintenance 

home interior and exterior

Low-maintenance 

home tips
Innovative Building Technology Guide | 80

Chapter 4: Performance Considerations

Desired Attributes

Water Efficiency

Performance

Tool and Resource Description Link

U.S. Environmental 

Protection Agency (EPA) 

WaterSense: Product 

Certification and Labeling

This tool makes it easy for consumers to recognize 

products and programs that save water without 

sacrificing performance or quality.

EPA WaterSense

Energy Efficiency

Performance

Tool and Resource Description Link

Building America 

Solution Center (BASC)

This resource allows the user to search for building 

science or energy-efficiency research and design 

guidance by climate, building component, or 

publication title. It is a compilation of research 

performed by the Building America Program

BASC

Building Components

Ceiling/Roof

Performance

Tool and Resource Description Link

Building Science 

Corporation (BSC): High 

R-Value Roof Assemblies

This resource identifies and evaluates residential 

assemblies that cost-effectively provide an 

improvement in thermal resistance over current 

building code minimums.

Roof Design

U.S. Environmental 

Protection Agency’s 

(EPA’s) ENERGY STAR: 

Roof Products

This resource provides information about ENERGY 

STAR-qualified roof products.

ENERGY STAR Roof 

Products
Innovative Building Technology Guide | 81

Chapter 4: Performance Considerations

Building Components

Electrical/Lighting

Performance

Tool and Resource Description Link

Energy.Gov: Solid-State 

Lighting (SSL)

This resource provides research and information 

on new technologies related to SSL. Solid-State Lighting

U.S. Environmental 

Protection Agency’s 

(EPA’s) ENERGY STAR 

Lighting

This resource provides information on ENERGY 

STAR-qualified lighting products. ENERGY STAR Lighting

Exterior Wall

Performance

Tool and Resource Description Link

Building Science 

Corporation (BSC): High 

R-Value Wall Assemblies

This resource identifies and evaluates residential 

assemblies that cost-effectively provide a 

50-percent improvement in thermal resistance 

over current building code minimums. 

High R-Value Wall 

Assemblies

Foundation

Performance

Tool and Resource Description Link

Building Science 

Corporation (BSC): High 

R-Value Foundations

This resource identifies and evaluates residential 

assemblies that cost-effectively provide a 

50-percent improvement in thermal resistance 

over current building code minimums. 

High R-Value 

Foundations

HVAC

Performance

Tool and Resource Description Link

Energy.Gov: SpaceHeating/Cooling 

Research

This resource provides research, best practices, 

and other information on efficient heating and 

cooling technology and strategies.

Space Heating and 

Cooling

Innovative Building Technology Guide | 81
Innovative Building Technology Guide | 82

Chapter 4: Performance Considerations

Building Components

HVAC Continued

Performance

Tool and Resource Description Link

U.S. Environmental 

Protection Agency’s 

(EPA’s) ENERGY STAR AirConditioning

This resource provides information about ENERGY 

STAR-qualified air-conditioners.

ENERGY STAR AirConditioning

EPA’s ENERGY STAR 

Boilers

This resource provides information about ENERGY 

STAR-qualified boilers. ENERGY STAR Boilers

EPA’s ENERGY STAR 

Ductless Heating and 

Cooling

This resource provides information about ENERGY 

STAR-qualified ductless heating and cooling.

ENERGY STAR Ductless 

Heating and Cooling

EPA’s ENERGY STAR 

Furnaces

This resource provides information about ENERGY 

STAR-qualified furnaces.

ENERGY STAR 

Furnaces

EPA’s ENERGY STAR AirSource Heat PumpsThis resource provides information about ENERGY 

STAR-qualifies air-source heat pumps.

ENERGY STAR AirSource Heat Pumps

EPA’s ENERGY STAR 

Geothermal Heat Pumps

This resource provides information about ENERGY 

STAR-qualified geothermal heat pumps.

ENERGY STAR 

Geothermal Heat 

Pumps

EPA’s ENERGY STAR 

Ventilation Fans

This resource provides information about ENERGY 

STAR-qualified ventilation fans.

ENERGY STAR 

Ventilation

SMART® Technologies/Controls

Performance

Tool and Resource Description Link

Energy.Gov: Sensors and 

Controls

This resource provides research, best practices, 

and other information on sensor and control 

technology and strategies.

Sensors and controls

Water Heating/Plumbing/Piping

Performance

Tool and Resource Description Link

Energy.Gov: Water 

Heating Research

This resource provides research, best practices, 

and other information regarding efficient water 

heating technologies and strategies.

Water heating

Innovative Building Technology Guide | 82
Innovative Building Technology Guide | 83

Chapter 4: Performance Considerations

Building Components

Water Heating/Plumbing/Piping

Performance

Tool and Resource Description Link

U.S. Environmental 

Protection Agency’s 

(EPA’s) ENERGY STAR 

Water Heaters

This resource provides information about 

ENERGY STAR-qualified water heaters.

ENERGY STAR water 

heaters

Windows/Doors

Performance

Tool and Resource Description Link

Energy.Gov: Windows 

and Building Envelope

This resource provides activities in windows and 

building envelope that focus on technologies 

such as highly insulating materials and 

systems; methodologies and analysis tools 

for measurement and validation of building 

envelope performance; and market-enabling 

efforts such as the creation of an organization 

responsible for rating, certifying, and labeling 

fenestration attachment products to better 

inform consumers.

Windows and Building 

Envelope

U.S. Environmental 

Protection Agency’s 

(EPA’s) ENERGY STAR: 

Residential Windows, 

Doors, and Skylights

This resource provides information about 

ENERGY STAR-qualified windows, doors, and 

skylights.

ENERGY STAR 

Windows, Door, 

Skylights
 

 -

U.S. Department of Housing and Urban Development 

Office of Policy Development and Research 

Washington, DC 20410 6000 

October 2017