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 it 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.

Choosing between Formance or traditional framing is a relative decision. You need an envelope on your building, so it’s just a question of what it’s made from. Consider other decisions you need to make, such as cladding type, window types, bathroom spec, and kitchen spec. In each case, you have many choices. A high-spec kitchen vs. a low-spec kitchen could be a $40,000 difference. Similarly, there could be $40,000 between the most expensive cladding and the cheapest option. However, neither of these decisions impacts your ongoing running costs.

We believe that a decision that saves an increasing amount over time for a modest upfront investment is a smart choice.

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 you save $150 x 12 = $1800 per year. That’s money coming in – inbound cashflow.

What we don’t yet know is how much the cashflow difference will increase over time as the fiberglass insulation between the frames slumps while the Formance rigid foam insulation maintains its as-built high-performance envelope. But 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. That’s why we highly recommend getting pricing on Concept designs to ensure you stay on budget.

Which projects work best?

With the higher upfront cost, lower running costs, and increased comfort, what types of projects work best with Formance? And which might not be as suitable?

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.

Want to discuss your project? Get in touch here.

Looking for a builder? Check out our build partners around the country.