Payback period of Green Buildings in India
Real estate development uses about 40% of the energy and it is one of the prime contributors to global warming due to the emission of Green House Gas (GHG) caused by the energy used. Therefore there is an extreme need to develop green buildings. Buildings in India consume 20%-30% of the country’s total electricity and have a significant impact on the environment and resources indicating the need to develop green buildings in India. A green building uses less energy, water and natural resources. It generates less waste and provides a healthy living environment for the occupants.The benefits of green buildings depend on the extent of sustainability features taken into consideration during its design stage.The two green building rating systems in India are LEED by IGBC and GRIHA by TERI. LEED is most popular among the ratings and the credits earned through LEED ratings can be traded in the carbon market. Green buildings have tangible and intangible benefits. The tangible benefits accrue from the operational cost savings and reduced carbon emission credits and high rentals or capital value. The intangible benefits are generated from the better working conditions within the building.The prime sources of revenue generation for green buildings are from the non-sustainability discount which gives the green buildings a higher rental value than conventional buildings in the vicinity and the carbon credits earned due to the reduced GHG emissions.The challenges faced for development of green buildings in India are the extra investment in an unstable real estate market scenario and difficulty in sourcing green building materials and sustainability consultants.The CII – IGBC and other professionals are working to mitigate the challenges faced by green buildings to enable developers to develop and operate green buildings with ease.
The overall benefits of green buildings mostly depend on the extent to which the sustainable
features are addressed during the initial planning and design. A green building is most likely to
succeed in its objective if sustainable features are envisioned and incorporated right at the design stage. The design has to take into consideration the entire supply chain—from material sourcing,energy modelling, resource reuse, civic amenities and waste disposal to tenant education.
In terms of appearance or use, there is no difference between green buildings and conventional ones. The major differences are that green buildings have improved indoor environment and they offer operational savings. Green buildings have been observed to have tangible and intangible benefits. The tangible benefits such as the economical advantages are not immediately visible. However, the lifetime payback is much higher compared with that of conventional buildings, which mainly accrue from operational cost savings, reduced carbon emission credits and potentially higher rental or capital values. The intangible benefits such as social advantages are due to the positive impact of green buildings in the neighbor hood environment. Moreover, due to better working conditions, the productivity of occupiers increase and health problem decreases
The general sentiment among the developer community is that green buildings cost higher than
similar conventional buildings, and it is difficult to get positive returns on this extra investment. This issue is mainly due to:
The still-evolving nature of green buildings;
The lack of technical information;
The short-term view on returns, instead of focusing on lifetime return on investment (ROI)
of these buildings.
The tangible benefits such as the economical advantages are not immediately visible. However, the lifetime payback is much higher compared with that of conventional buildings, which mainly accrue from operational cost savings, reduced carbon emission credits and probably higher rental or capital values.
The green building experiences in India have been exciting and challenging as well.Since its introduction in 2001, the LEED rating has emerged as a very useful tool in designing a green building.The LEED rating provided opportunities to introduce new products and materials.The easy availability of most of the green materials and equipment in the country has made it easier for the designers to adopt local materials to a very large extent. Now there is an imminent need for service providers, who would be required in large numbers, not in hundreds but thousands, as the movement is heading to reach greater heights.The green building movement is here to stay for the benefit of individuals, society and the country at large.
source :IGBC,CII,Jones Lang LaSalle Meghraj