United Nations Environment Programme (UNEP) has stated that “No Other Sector has such a High Potential for Drastic Emission Reductions then the Building Sector”. India can be a Major Contributor to it if its Green Building Revolution picks up but for that, Government Policy and Private Sector must work in sync.
Exclusively for green buildings, the globally recognized Leadership in Energy and Environment Design (LEED) certification system established by the US Green Building Council (USGBC) is present in India as LEED India run by the non-profit organization India Green Building Council, a part of CII. Currently, it has more than 700 registered and 120 buildings in 2010 alone with around 1500 buildings registered and around 300 certified since the system's inception in India. But, it's in cost premiums incurred by developers of green structures wherein lies the twist in the tale. Or is there a twist? As per numerous experts, the total capital investments in a green building are just 3-5% higher than that of a conventional building. On the other hand, the breakeven for a green project occurs within 4-5 years, atleast 2-3 years earlier than conventional cases owing to reduced energy usage mostly in air-conditioning and maintenance. As per Chandrashekar Hariharan, CEO and Co Founder of Bangalore based BCIL, a major green building developer in South India, “There is indeed no extra cost. However, it must be added that where there are additional elements -- such as air-conditioners or any other facility that one builds as an energy-efficient feature, one should look at paybacks. The cost of such amortization of capital are low today extending some times to as much as 7 to 15 years, thanks to the very low tariff regimes for energy, water and waste collection. Our cities have to stiffen these prices. This is imperative for encouraging new technology and to improve payback frameworks."
The real difference lies in the category of a building. A majority of investments in India and globally are into commercial green buildings simply because of basic difference that commercial properties are leased out in more than 90% of the cases while residential property is almost always sold to the end consumer. Thus, for an office space, the long term benefits accrued through savings in air conditioning etc are huge for the client making it viable to pay a premium for the same. Its only in case of high end residential space where customer is more sensitive about the product than the price and can consider paying extra for a green residence while in the mass market low/mid end residential space, customer is extremely price sensitive prohibiting entry of green developers.
Exclusively for green buildings, the globally recognized Leadership in Energy and Environment Design (LEED) certification system established by the US Green Building Council (USGBC) is present in India as LEED India run by the non-profit organization India Green Building Council, a part of CII. Currently, it has more than 700 registered and 120 buildings in 2010 alone with around 1500 buildings registered and around 300 certified since the system's inception in India. But, it's in cost premiums incurred by developers of green structures wherein lies the twist in the tale. Or is there a twist? As per numerous experts, the total capital investments in a green building are just 3-5% higher than that of a conventional building. On the other hand, the breakeven for a green project occurs within 4-5 years, atleast 2-3 years earlier than conventional cases owing to reduced energy usage mostly in air-conditioning and maintenance. As per Chandrashekar Hariharan, CEO and Co Founder of Bangalore based BCIL, a major green building developer in South India, “There is indeed no extra cost. However, it must be added that where there are additional elements -- such as air-conditioners or any other facility that one builds as an energy-efficient feature, one should look at paybacks. The cost of such amortization of capital are low today extending some times to as much as 7 to 15 years, thanks to the very low tariff regimes for energy, water and waste collection. Our cities have to stiffen these prices. This is imperative for encouraging new technology and to improve payback frameworks."
The real difference lies in the category of a building. A majority of investments in India and globally are into commercial green buildings simply because of basic difference that commercial properties are leased out in more than 90% of the cases while residential property is almost always sold to the end consumer. Thus, for an office space, the long term benefits accrued through savings in air conditioning etc are huge for the client making it viable to pay a premium for the same. Its only in case of high end residential space where customer is more sensitive about the product than the price and can consider paying extra for a green residence while in the mass market low/mid end residential space, customer is extremely price sensitive prohibiting entry of green developers.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
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