Green Roof ROI Explained
by Oscar Warmerdam on Thursday, December 6, 2018 updated Tuesday, February 22, 2022
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Why detention is the green roof ROI
Almost all green roofs are sold in regulatory environments where there are incentives, and rebates, but mostly requirements to build green roofs. Often, the million-dollar question is dodged:
“What is the real economic benefit of building a green roof?”
How is it possible that in Washington DC more or less every building has a green roof, but just over the border on the other side of the street in Fairfax County one rarely sees a green roof built voluntarily?
We’d like to take a close look at this from a purely economic perspective without the environmental or architectural discussion.
In the end, most green roof customers are not eccentric billionaires with millions to spend on do-good stuff. Sure, it’s fantastic if we can help the environment, but to be honest, most of us simply can’t save the world on our salaries. We must get something out of the green investment.
However, it is possible to do good and get a return on your investment when it comes to green roofs.
Continue reading to understand how!
Green roof secondary benefits
Most people look at a green roof and see the following benefits:
On a building scale:
- Aesthetics – a green roof sure is pretty!
- Biodiversity - an extremely important current topic. Biodiversity is declining globally at rates unprecedented in human history, but few have the finances to let this reason be the only determinant for building a green roof.
- Doubling the life of the membrane – this gives some economic incentive if you think long-term.
- Energy savings – always interesting, but is it enough?
On a city scale:
- Reduced heat island effects - reduction in heat-related illness will lead to savings, but they are diffuse and hard to put a number on.
- Biodiversity – this is also extremely critical for human survival, but again, hard to put a number on when it comes to financial savings for a city resulting from installed green roofs.
- Fewer Combined Sewer Overflows (CSO) - less flooding of the city that can lead to significant savings.
- Improved air quality - this is an amazing benefit, but it is hard to put a number on.
On their own, these seven arguments do not generate an ROI for the green roof, with the result that green roofs are being VE’d (value engineered = removed). A clear ROI will lead to faster acceptance of green roofs.
However, green roofs are a great investment, even for us mere mortals.
There is a clear ROI for green roofs, and that is found in detention.
Let us explain…
A green roof is a water bucket
A green roof is like a big water bucket that retains water. The roof merely holds the water, which is then removed by upward evapotranspiration. Well, at least that’s the dream scenario. That’s not always what happens. If the green roof bucket is full, only evapotranspiration can empty it out again. Hence, one can say that the maximum retention capacity of a green roof is equal to the maximum evapotranspiration of that roof.
Retention works well for about 80% of routine rain events, as most often there is enough time in between rain periods to empty out the green roof bucket through evapotranspiration. The rub is that those 80% rain events only equate to about 50% of the annual rain volume! The other 50% of the water that is not retained is called detained water or detention.
Why can a roof not retain 100% of the water?
That is for a rather simple reason. A green roof becomes an instant pipeline once saturated. This is what happens in those cases when we get a second rain event. We call that the 2nd-day storm. It might even rain several days in a row. Rain events that are extra-large, 10-, 25- or 100-years storms cause almost instant outflows, and that water must go somewhere.
These are not routine rain events. These are large or even massive storms that cause flooding, erosion, and pollution. Thus, temporarily holding or detaining this 50% is most critical. And as it turns out traditional green roofs are not so good at managing this aspect.
In order to handle the other 50% that is not retained, the civil engineer builds a second bucket. This second bucket is not a retention tool, but this is a detention tool that instantly can receive the stormwater volume of a large rain event, and it slowly releases this over a set period of time.
Detention is stormwater volume released over time.
How do we deal with that second bucket?
The second bucket often sits at-grade either in the form of a tank or in the form of bioretention, such as a dry pond. This second bucket works all the time, due to its pre-designated detention release rate (think of a bottleneck with a release rate of 255L/min [ 0.15 ft3/s] for instance).
This second at-grade bucket is potentially less costly than the green roof, but unlike the traditional green roof, it works 100% of the time and is independent of vegetation. The main drawback is that this second bucket at-grade is taking up space that could be used for alternative development.
One then wonders why one would invest in a stormwater solution that has two buckets (a green roof and an at-grade solution) when the one at-grade bucket would suffice?
That is what we see most.
Cities have an incentive to require building owners to build green roofs because green roofs are known stormwater volume reduction tools, they help the city manage and minimize the annual volume of water. But the city passes on the cost of the green roof to the building owner. For understandable reasons, the green roof cost is thus perceived as a tax.
To be honest, because a traditional extensive green roof has no clear ROI, most often it is only the wealthy do-gooder that would do both buckets. The moment the city doesn’t require the developer to build a green roof, most building owners opt-out and VE the green roof.
There is, however, a double-bucket approach for a green roof, with a clear ROI. This solution is not green, but purple.
You should invest in that green roof bucket – but not in the way, you might think!
If we place a Purple-Roof compliant system on the roof, we transfer some, or all, of the detention responsibility of the building to the Purple-Roof concept on top of the building which has a designated detention release rate of its own (e.g. 10/L/s/ha). The result is that the underground tank can be significantly reduced or removed. This allows for lower excavating costs or even extra parking, and in some cities, parking generates $10.000 per year in revenue so, over a 40-year lifespan, a single extra parking spot generated by the detention-type green roof can pay for the green roof many times over. Or, the bioretention area can be reduced or removed. This saves cost and allows for development.
The value of the saved space and the lowered construction costs will pay for some if not all the green roof costs, at least in urban areas. For rural areas with a lot of undeveloped land with space for rain gardens, the situation is very different. In those cases, we propose to build a rain garden or a bioretention pond instead for the "detention bucket", as this would make more financial sense. However, a green roof can bring a lot of other benefits to the owner. It is all about the right solution in the right place.
Now add the secondary benefits to this detention strategy
There are also additional savings for the owner!
There will be an estimated 5-10% energy savings from an additional insulation impact perspective combined with lower intake temperature when air handlers are placed on the green roof.
There will be an extra real estate value due to the green roof visual impact. This is often 5-10% higher rent for units facing a green roof.
There will also be a doubling or tripling lifespan of the membrane. Replacing a low-cost roof membrane costs between $4-8/sqft (0.09 m2) every 10-15 years.
Those are real savings for the owner.
The owner also has the other additional benefits: it’s easier to sell/promote the sales or rental units with a green roof as a PR tool, and now the bees and the butterflies are a great selling point.
And lastly, long term the owner can avoid rainwater tax (USA). A lot of cities already have this rainwater tax, or will get this soon, and anyone with a Purple-Roof concept investment will be protected from this, as the release rate from the roof already matches pre-existing conditions.
Every roof, every building, every city, and every situation is different.
For good advice on the matter, don’t hesitate to contact our experts for tips and advice!
What is Purple-Roof?
Reading tip: data-driven green roof development
We warmly recommend the book Green Roof Ecosystems for a good introduction to current green research.
This article is available as an audio version on all major podcast directories such as iTunes, Spotify and many more.