The real estate industry is going green as renewable energy takes centre stage.
Efforts to power buildings entirely by energy are starting to take shape amid a concerted push in the real estate industry to ramp up its green credentials.
In recent times, the real estate industry has been a major contributor to carbon emissions due in part to air conditioning systems running on fossil fuel-powered electrical grids, heating provided by natural gas boilers, and diesel generators used for backup power.
With energy bills rising alarmingly, amid the rapid inflation and the cost of living crisis, it is no surprise that many homeowners are considering installing technology such as solar panels for use as renewable energy.
In fact, data from eBay recently found that searches for solar panels were up to 45 per cent, with one search every minute for this sunlight-powered technology.
It is clear that renewables like solar and wind power are already on the rise in our homes and are becoming an increasingly popular choice among buyers and homeowners.
According to a report published by Dezrez and titled, “How Renewable Energy is Transforming the Property Market,” renewable energy is rapidly transforming the property market and estate as nearly 40 per cent of global carbon dioxide emissions come from the real estate sector, with the majority of these emissions coming from building operations and the rest coming from the construction processes.
According to a new report by Market Watch titled, “Smart Buildings Market 2023 will experience a noticeable growth during the Forecast Period -2028,” the global smart buildings market is anticipated to rise at a considerable rate during the forecast period, between 2023 and 2028.
In 2021, the market grew at a steady rate, and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon.
According to the report, smart buildings transform automated buildings into intelligent ones. It integrates building management systems with business systems and provides data analytical tools to all standalone systems to enable the control system’s capabilities of making decisions.
It said smart buildings had automated seamless integration of all the standalone systems backed by building the Internet of things to make each device intelligent to understand the environment beyond the provided controls and work.
It further stated that smart buildings could generate analytical reports with the help of analytical tools of cloud or big data to help managers understand the trends and how optimisation could be achieved further.
“The building management system segment held the maximum market shares during 2017. The segment is expected to retain its market dominance due to the increasing industrial development, commercialisation, and awareness of the effective utilisation of energy and building optimisation in regions such as Europe, the Middle East, and Africa, as well as the Asia Pacific region.
“Furthermore, technological innovations such as the Internet of things, analytics, and cloud computing for effective monitoring, controlling, and operating building facilities will also propel the adoption of battery management systems,” a part of the report read.
A real estate professional and Managing Partner, Availsys Limited, Moses Ida-Michaels, said the future of real estate in Nigeria was in energy efficiency.
Ida-Michaels said Nigeria would benefit as a nation by starting right, using natural products that could be recycled.
He said, “As the population grows, and as residential and commercial homes are concerned, there will be energy consumption. So, the whole idea is to make wise use of energy.
“This is why sustainability goals are being developed so that people can use facilities with a friendlier eco-system. There is more technology available and with this, there are more opportunities to do things better and promote efficiency.
In the world, Africa does not rank as high in the level of carbon footprint as China or the United States of America. These countries have also been telling us to be energy efficient.
“However, for us to grow as a nation, we cannot take everything we are being told energy-wise. We have to take what we need, and jettison what we do not need.”
In recent times, climate change has been a major source of concern all over the world. The discharge of greenhouse gasses was identified as a contributory factor to climate change.
Gas flaring, motor vehicle emissions, bush burning, industrial processes, land-use changes, and the transport and construction sector, amongst others, have been important sources of greenhouse gas emissions throughout the world over the years.
The climate change effect with its accompanying problems and challenges generated the need and clamour for a sustainable environment, which has gained significant momentum worldwide in recent times, particularly in developed nations.
According to the Green Building Council of Nigeria, green buildings are energy-efficient, resource-efficient, and environmentally responsible buildings, incorporating design, construction, and operational practices that significantly reduce or eliminate the negative impact of development on the environment and occupants.
A report by IntechOpen titled, “Exploring the Factors Hindering the Use of Green Architecture in Nigeria,” noted that the construction industry in Nigeria had continuously witnessed rapid development as a result of massive investments in infrastructure projects such as housing.
“The continuous growth of this industry and the conventional approach to construction practices in Nigeria has negatively affected the environment and the wellbeing of the populace.
“Therefore, the concept of green architecture, also known as sustainable architecture, is a new approach in Nigeria’s construction industry that strives to achieve environmental sustainability. However, various factors have hindered its adoption and utilisation,” it added.
The Availsys Managing Partner noted that Nigeria has a huge housing deficit as a nation, and buildings need to be built more cheaply.
“Shelter for all is a great objective for us to pursue as a nation. Looking at the big picture, to drive the objective of affordability, the government and stakeholders in the real estate sector’s input are of utmost importance, and one of the things to do is to look for ways that energy efficiency would come in. Hence, the objective of green buildings is to make buildings cheap.
“The truth is that the future of real estate in Nigeria is a measure of energy efficiency. Although, there have been arguments to rule out green energy because of the cost and the game continues to play out among the global powers on whether we are going all green or partially green. Green is amazing; however, I would opt for a wise green approach that does not hamper our development objective as a nation.”
An engineer, Kayode Joel, said with the continuous rise in the energy crisis, alternative sources or better still renewable energy for homes are in high demand.
He said, “The renewable energy option does not come cheap. However, statistics have shown that home buyers want the renewable energy option, and this has an impact on the cost of real estate, as the cost of buying homes is now high.
“The negative impact of these green buildings/smart homes is that, before now, there were low-cost housing schemes. If everyone must go to the renewable energy schemes, there may not be homes for the average Nigerian to buy in the near future because of the rise in cost as a result of renewable energy.”
The Chief Executive Officer, Riel Homes, Kolade Adepoju, noted that affordable housing and smart homes could not work hand in hand for now because of the cost of renewable energy.
He added, “The only way smart homes can bridge the deficit gap is by making smart homes affordable. However, this privilege will cost more and might become unaffordable.
“Hence, the major concern is how to rightsize the cost of smart homes to enable low-income earners to own them as well.
A realtor, Tayo Makinde, noted that the energy industry had a great influence on the real estate industry, with more emphasis on renewable energy.
Makinde said, “Everybody wants a safer environment that is why most real estate companies now consider the use of different renewable energy but the most commonly used around here are solar, wind, and biomass energy.
“Although it might be more expensive to produce in the long-term it is cheaper to run and it has invariably increased the value of properties which is a plus to the developers, and the investors are assured of a huge return on investment.
“There has been a great increase in demand for energy-driven properties and it has really shaped the real estate industry.”
Earlier, a report by Estate intel titled, “2023 Africa Real Estate Trends to Watch Out For,” disclosed that there were approximately 300 green buildings in Africa outside of South Africa, while this number was nowhere near the 120,000 global green buildings. Markets such as Nairobi, Accra, and Lagos have recorded over 200 per cent increase on average in the past three years.
“Notably, access to financing has been the lead driver for the majority of developers and investors steering the momentum towards green.
“This has resulted in major transactions across the continent such as the announcement of the largest syndicated sustainability-linked real estate debt facility secured by Grit in 2022 and organised by Standard Bank.”
The report further added that while Nigeria has had limited green building activity, it ranked second to Kenya at 64 per cent on the matrix in terms of the adoption potential, with significant progress being made towards green building legislation and its commitment to Net Zero by 2060.
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