Passive House vs Code-Compliant House Construction Cost
Passive House vs Code-Compliant House Construction Cost
I know there are many people out there wanting to do better with their choices in building and renovating their new homes. But with a misconception of the increased costs of building better, it often gets dismissed early on.
We seem to evaluate the value of our homes based on the cost to build or renovate them, rather than consider the actual cost of our homes which is our mortgage. It’s the same considering a car only on the buy price, instead of comparing mileage, age, service requirements, warranty periods, and fuel efficiency. It seems we are good at evaluating the value of our cars over their lifetime and really bad at doing it with a financial asset that costs us considerably more and one we spend a great deal more time in.
So what is the True cost of differences in Construction over the lifetime of a mortgage? Well like a car, it has to factor in not only the initial cost but running costs over the lifetime that we need to pay off that loan (At the very least) So I did a little cost comparison.
Firstly it's valuable to point out that most of the homes in New Zealand (That would be 97% at least) only reach to the minimum standard as set out in the New Zealand Building Code if they reach that at all (thinking of existing housing stock). We have a large stock of very poor-performing homes It's like having a large market share of poor-performing investment shares, not great for returns and an investor's liability. It’s a large stock of the worst-performing buildings legally allowed to be built.
Secondly, to get a comparison, we need to level up the performance requirements of these two. Passive house sets targets for the Maximum amount of energy to be used to meet healthy and comfortable home requirements. The New Zealand Building Code sets Minimums with improvements optional. What that means is that we need to raise the health and comfort requirements of our poor-performing building code homes to see how it compare energy-wise to the Passive House Standard.
In a nutshell, this means to keep a minimum Code-Compliant Home at 20 degrees Celcius, which is a mandatory target by Passive House, the power bill of a Code-Compliant Home would be comparably larger. $6660 per year larger. This allows us to bring the two onto a comparative level.
Minimum Code-Compliant Home
For a constant temperature of 20oC year round it is estimated it requires 120kWh/m2a in power.
200m2 x 120kWh/m2a = 24,000kWh/a @ 32c a Kilowatt
Total Annual Power Bill = $7,620 Or $640 a month
Passive House
For a constant temperature of 20oC year round a Passive House cannot use more than 15kWh/m2a
200m2 x 15kWh/m2a = 3,000kWh/a @t 32c a Kilowatt
Total Annual Power Bill $960 Or $80 a month
With Passive house construction estimated to be 5-10% more expensive than our poor compliant home, how does this pan out if we are to be living to a healthy comfortable standard over the lifetime of our mortgage?
Let us see how it compares to a 200m2 Minimum code-compliant Home with a Passive House and see how the difference in power bills could help you pay off your mortgage faster (And save on money on interest) A 30-year term assumed with a 7% interest rate, 20% deposit and $3,200m2 build rate for the Code Compliant Home.
*calculations carried out on sorted.org.nz
Minimum Code-Compliant Home
Assumed m2 cost of $3,200 (Includes GST)
Build Cost 200m2 x $3,200 = $640,000
Deposit = $128,000
Loan Amount = $512,000
Monthly Mortgage Repayments = $3407 over 30 years.
Passive House
Build Cost $640,000 x 10% = $705,000
Deposit = $141,000
Loan Amount = $564,000
Monthly Mortgage Repayments = $3,753 over 30 years
If we add the power savings to the mortgage repayments to reduce the payment period down from 30 years and reduce the interest paid on the loan we get.
Power Savings added to monthly repayments $640—$90 = $550
Increased Repayments = $4,303 per month.
Get Mortgage Free 111 months earlier.
*based on space heating figures only
The ironic thing is with sustainable features we look at the payback period. But how feasible and valuable will your poor-performing building be when it's time to cash up and sell? It seems we do this in individual features rather than addressing the whole design as a sustainable system.
I firmly believe that as Energy Modelling becomes more common (and compulsory) consumers, clients, and customers are going to be asking about operating costs and quality far more. We have energy ratings on our appliances, and fuel efficiency information for our cars. It is only a matter of time before it comes to our buildings.
The question will be, what’s your number?