Sustainable Spaces: Green building market in India set to double by 2022

Green building market in India set to double by 2022

The battle against climate change is being fought on two major fronts – clean energy supply and energy efficiency. As India continues to expand its renewable energy capacity to achieve the specified targets, the dialogue around energy efficiency is also picking up to improve demand-side power management in the country. In this context, green buildings have emerged as a holistic solution to creating sustainable set-ups for the country’s increasing population while curbing the resultant carbon emissions.

Green buildings are eco-friendly structures that use, harvest, generate and store water and energy efficiently throughout the building life cycle. They minimise waste at every stage, thus ensuring low cost of development and operations. Green buildings use renewable sources of power instead of depending on fossil-fuel based grid electricity.

To ensure the standardised development of green buildings, the Bureau of Energy Efficiency released the Energy Conservation Building Code, 2017. The code sets minimum requirements for energy efficient design and construction of new buildings. Apart from this, green buildings in India are required to comply with the Leadership in Energy and Environmental Design (LEED) certification, which is a globally accepted benchmark for the design, construction and operations of green buildings introduced by the United States Green Building Council (USGBC) in 2000. The Indian Green Building Council and The Energy Resources Institute-Green Rating for Integrated Habitat Assessment (TERI-GRIHA) are leading agencies that define, monitor and evaluate green buildings in India.

In January 2018, USGBC announced the international ranking of the top 10 countries for LEED. India secured the third position, following Canada and China in the second and first positions respectively. As per the council, India had 20.28 million square metres of LEED-certified green space across 752 projects. This indicates a growing sense of responsibility towards energy efficient operations in the infrastructure sectors. Moreover, the resulting convergence of the energy and real estate industries will open up a plethora of business opportunities in India.

According to ANAROCK Property Consultants, India’s green buildings market is expected to reach 10 billion square feet by 2022, valued at $35 billion-$50 billion. As of September 2017, more than 4,300 projects have been registered for green technology, with a cumulative built-up area of 4.7 billion square feet. This growth has been driven primarily by increased awareness, environmental benefits and the government’s impetus to renewable energy generation, particularly rooftop solar on buildings. In addition, multiple incentives are available for green buildings including property tax rebates and extra floor area ratio to encourage developers to create energy efficient infrastructure.

As per industry estimates, green building penetration in India is only 5 per cent at present, indicating the immense potential the real estate sector holds for driving the country’s energy efficiency efforts.  However, energy efficiency comes at an additional cost of about 15 per cent over conventional buildings. In the long run, the reduced operational costs of green buildings and their potential benefits to the environment and users will compensate for high capital expenditure.

In India, while the green buildings concept is yet to take off in a big way, some projects have already established the industry best practices. These include the Confederation of Indian Industry’s  building in Hyderabad, which was the world’s first LEED platinum-rated building outside the US; the Indira Paryavaran Bhawan, which received a platinum rating by LEED and a 5-star rating by GRIHA; the ITC Maurya Hotel in Delhi, which is the world’s first and largest LEED platinum-rated hotel that uses parabolic solar concentrators; and Infosys Hyderabad, which was the winner of the UK Ashden Award, also known as the Green Oscar.

With falling equipment and raw material costs, including the capital cost of solar power generation, developing green buildings is likely to become less expensive over the next five years, making it economically viable for developers. To further drive growth in the segment, the government will have to incentivise the concept and make it mandatory for all upcoming government-owned buildings. With these measures, private financing and increased awareness, India is expected to continue to retain its position among the world leaders in green building innovation and implementation.