The Numbers

Yes, the energy savings, strength, comfort and health benefits of using Formance are easily appreciated. But what is the FINANCIAL IMPACT of upgrading your project to Formance?

Bottom line – Choosing Formance will cost you a little more upfront (3-5%) than nominal code-compliant traditional framing but will save you in the long run. The savings start when you move in and they never stop.

Here are a few considerations to help you assess the financial impact of upgrading to Formance.

 

A relative decision.

A decision between Formance or sticks for your building envelope is a relative one. You need an envelope on your building so it’s just a question of what it’s made from. Think about other decisions you need to make, for example, cladding type, window types, bathroom spec, kitchen spec. In each decision, you have many choices. A high spec kitchen vs a low spec kitchen could be a $40,000 difference. Likewise, there could $40,000 between the mostly costly cladding vs the cheapest option. You get the idea. It is important to note that neither of these two decisions has any impact on your ongoing running costs.

We think a decision that saves an increasing amount over time for a modest investment upfront is a no-brainer.

Cashflow vs Capital.

Most of us need to borrow to afford a large capital item like a house. We must service this loan by making regular ongoing payments of principal and interest.

Let's say a home built with traditional framing takes $300 per month in power to maintain an acceptable living environment. If we conservatively estimate power costs in the same home built with Formance to be 50% of this, then we save $150 x 12 = $1800 per year. That is money coming in, inbound cashflow.

What we don’t yet know is how much the cashflow difference increases over time as the fibreglass insulation between the frames slumps while the Formance rigid foam insulation maintains its as-built high-performance envelope. You can bet the gap widens.

Design plays such an important role.

Cost gets baked into the design right from the start. The more detailed the plans are the less opportunity there is to remove cost if it's going over budget. For this reason we highly recommend getting pricing on Concept designs to ensure you stay on budget. 

 

Which projects work best? 

So with the higher upfront cost and lower running costs and great comfort what types of projects work best and which ones not so well? 

Projects well-suited to Formance

  • If you're building for yourself.
  • Dream homes.
  • Volume residential projects where the higher upfront cost is offset by the site efficiencies.
  • Passive House projects.
  • Homestar 6-10 projects

Projects less-suited to Formance

  • One-off developments you're not going to live in yourself.
  • One-off rental properties.
  • Projects where running costs and comfort are not important.

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