Capex vs Opex | Can sustainable design impact long-term costs?

How does sustainable architecture affect your construction budget?

In today’s market of higher borrowing costs, inflation and energy price instability, having consideration to capital expenditure has never been more critical. Are the minimum legislative requirements enough in this economic climate? Right…we can’t predict the future, but we can help plan for the ‘known unknowns’.

What is Capex vs Opex?

When constructing a building the capital expenditure (Capex) is the money you pay to the point of completion of the construction of the building, a one-time expenditure, and operational expenditure (Opex) is the recurring costs required to maintain and support the building, including utilities bills, once occupied. Capex and Opex can be seen as competing with higher capital expenditure probably resulting in lower operational expenditure.

When you spend more to start with on benefitting design features, you usually save money in the future. The alternative would be to spend less on the design, cutting out features that save energy and increase sustainability, but face increased energy and operational costs later, possibly being forced to retrofit your building further down the line because the energy consumption is so high. So is it better to spend more on the Capex and less on the Opex, or spend less on the Capex and more on the Opex?

How can sustainability decrease Opex?

Sustainable aspects of a design in some circumstances may not seem budget-friendly or cost-effective initially, yet investing in things like integrating renewable energy solutions and using a fabric-first approach can lead to longer term savings.

The ‘fabric-first’ approach prioritises energy efficiency right from the start of the design and development process, rather than treating it as an afterthought or ‘add-on’ to meet building regulations. This ensures energy efficiency is considered at every stage, particularly when selecting materials for key building components.

A highly sustainable design may require higher Capex initially, but it significantly reduces Opex over time while benefiting the environment.

Key Sustainable Features

Renewable energy systems – Solar panels, wind turbines, and ground/air source heat pumps provide clean, renewable energy, reducing reliance on fossil fuels and cutting electricity bills.
High thermal performance – From ground floor construction, wall construction, roof, windows and doors, reducing heat loss and solar gain will have lower demand for heating and cooling.
Airtight construction with breathable, non-toxic materials – Minimises drafts and heat loss while allowing moisture control, improving energy efficiency and indoor air quality.
Energy-Efficient Ventilation – MVHR (Mechanical Ventilation with Heat Recovery) systems improve air quality by recovering heat from outgoing air, reducing heating demand with low-energy use.
Rainwater harvesting and greywater recycling – Reduces water consumption and demand on mains supply, lowering costs and environmental impact.
Sustainable materials – Natural, low-maintenance materials like FSC-certified timber, lime plaster, and reclaimed bricks reduce environmental impact, save resources, and lower long-term maintenance costs. Light gauge steel can also be used and reused at the end of its lifetime; arc furnaces can lower energy consumption in steel production.
Green roofs and living walls – Improve insulation, reduce urban heat gain, support biodiversity, and extend roof lifespan while lowering heating and cooling costs.
Smart building systems with energy-efficient controls – Automated lighting, heating, and water systems optimise efficiency, reducing unnecessary energy use.
Local supply chain – Sourcing materials and services locally reduces transportation emissions, supports the local economy, and shortens lead times, ultimately lowering carbon footprint and operational costs.

So Capex or Opex?

As architects, we understand the fine balance of Capex and Opex, we understand where long-term savings can be made. However, the initial cost can present a significant barrier for many, making it a challenge to move forward. While it’s tempting to focus on short-term savings during the early stages of a project, these tend to be outweighed by the long-term operational costs and impact.

We can work with you to highlight the benefits and work though the challenges across all RIBA Stages of Work. We can help you to understand your longer-term costing over the building’s lifetime to maximise your investment potential and help reduce your operational expenditure.