How Real Estate Is Influencing Renewable Energy Market Growth
- Oct 4, 2017 10:00 am GMT
- 892 views
Renewable energy sources are yet to reach the levels that many people anticipated they would a few years ago, as adoption continues to face several geopolitical and macroeconomic challenges. Some of the top country leaders, such as Donald Trump and various corporate leaders have expressed skepticism as to whether the effects of climate change are real thereby derailing developments in the renewable energy market.
In its Fifth Assessment Report, the Intergovernmental Panel on Climate Change, a group of 1,300 independent scientific experts from countries all over the world, concluded there's a more than 95% probability that human activities over the past 50 years have warmed our planet.
Given these findings it is widely believed that renewable energy could help humanity avert one of nature’s most ruthless punishments. Some industries, such as the real estate market have already began to embrace the use of renewable energy sources, predominantly solar power at this stage.
In today’s market, solar as a secondary power source has become a necessity for residential and commercial property due to an increasing need for energy efficiency. While some developers still opt for power systems that rely on non-renewable energy like diesel/gasoline generators, there are those that are beginning to endorse solar as the main energy source for secondary power.
When building houses, home owners are now aware of the energy efficiency of their property and are able to tailor the build to incorporate systems that will lower emissions. Simple strategy’s like placement of large windows away from the searing afternoon sun, or utilizing thermal mass in building materials, using natural light and ventilation where possible and suitable insulation, which will aid in keeping the house warmer or cooler where necessary. Solar Power has long been around but the popularity is set to surge with the introduction of Tesla tiles to the market.
In fact, there are some countries that have made it a requirement that every new apartment or a residential estate developed, be fitted with solar panels for water and thermal heating.
Whilst other industries like transportation, industrial and manufacturing continue to use the non-renewable and pollutant energy sources to power their production systems and services, real estate may present an unlikely catalyst for growth in the renewable energy market.
Government incentive plans are being implemented for businesses that minimalize their carbon foot print and also landlords and commercial property owners.
Solar energy has had a major impact on the real estate market over the last few years. In today’s markets, property developers and renovators are using solar to increase the value of their properties
Some of the leading cities in the U.S. and Europe have also adopted such policies including San Francisco, which recently introduced a law requiring all new buildings to be fitted with solar panel rooftops. However, others have not taken into the solar power idea, a good example in this case being the city of London.
While many of the other U.K. cities have embraced solar power, London lags significantly. According to a 2015 report published by The Guardian, London had less than 58,000KW installed solar power capacity, which was massively dwarfed by installations in the South West and the South East of England with over 500,000KW and 350,000KW, respectively.
For London homeowners, it is unclear why most have opted against capitalizing on this opportunity to cut energy costs. As for the commercial properties, this could be partly because many occupants operate in sectors that do not require a large consumption of energy.
According to the London Office Space Blog, a significant amount of commercial property occupants in London operate in the creative, fintech, technology, finance, and the media industries. These do not require massive amounts of power, compared to the operations of companies in the industrial and manufacturing sectors. This could explain why there is some level of reluctance to adopt solar power.
It is clear to draw a link between the real estate market and renewable energy. As more countries and governments continue to embrace and impose policies on using solar power in new properties, the industry will continue to grow and move towards reaching its full potential. Whilst some global leaders still throw conspiracy theories around rather than tackling such issues it is clear that individual conscience and moral responsibility will be needed to continue making a difference.
Nick is the editor of CAGRValue.com a growth investing focused blog, which discusses emerging industry trends and the best growth opportunities in the market. Follow our latest guides on Investing in general, and especially Growth Investing.Opinions expressed here are my own and do NOT represent an investment advice or recommendation.