Drivers of the accuracy of developers' early stage cost estimates in residential construction

Purpose – Preliminary cost estimates for construction projects are often the basis of financial feasibility and budgeting decisions in the early stages of planning and for effective project control, monitoring and execution. The purpose of this paper is to identify and better understand the cost drivers and factors that contribute to the accuracy of estimates in residential construction projects from the developers’ perspective. Design/methodology/approach – The paper uses a literature review to determine the drivers that affect the accuracy of developers’ early stage cost estimates and the factors influencing the construction costs of residential construction projects. It used cost variance data and other supporting documentation collected from two case study projects in South East Queensland, Australia, along with semi-structured interviews conducted with the practitioners involved. Findings – It is found that many cost drivers or factors of cost uncertainty identified in the literature for large-scale projects are not as apparent and relevant for developers’ small-scale residential construction projects. Specifically, the certainty and completeness of project-specific information, suitability of historical cost data, contingency allowances, methods of estimating and the estimator’s level of experience significantly affect the accuracy of cost estimates. Developers of small-scale residential projects use pre-established and suitably priced bills of quantities as the prime estimating method, which is considered to be the most efficient and accurate method for standard house designs. However, this method needs to be backed with the expertise and experience of the estimator. Originality/value – There is a lack of research on the accuracy of developers’ early stage cost estimates and the relevance and applicability of cost drivers and factors in the residential construction projects. This research has practical significance for improving the accuracy of such preliminary cost estimates.

The cost estimate for a novel cheap solar cell

The estimate for the lowest cost of SODL (silicon on defect layer) solar cell is made according to the price standard of present market. The estimate shows that the PV (photovoltaics) energy costs can be reduced from today's 25-30 cents/(kW h) to 7-8 cents/(kW h) which is comparable with the present cost of electricity generated by traditional energy sources such as fossil and petroleum fuels. The PV energy costs could be reduced to a value lower than 7-8 cents(kW h) by developing SODL technology. The SODL solar cell manufacture featuring simple processes is suitable to large scale automated assembly lines with high yield of large area cells. Some new ideas are suggested, favoring the further reduction in the cost of commercial solar cells.

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