Green technology has slowly made its way into the Asia-Pacific markets. In Hong Kong, many new property developments have sought LEED Certification, which assigns a grade to buildings based on the amount of energy they save. However, waiting for all buildings to go green as they redevelop will be a slow process, because a building’s average life cycle can be as long as half a century. Thus, whether a city goes green depends crucially on how quickly existing buildings can go green.
One development to note is that many emerging technologies not only save on energy costs, they also make enough financial savings to generate a respectable internal rate of return. The Empire State Building, one of the most iconic buildings in New York, has gone through such a renovation scheme in 2010. Compared to figures before the renovation, the building has cut its energy consumption by 38 percent. Per year, this equates to roughly a financial savings of US$4 million in electricity bills.
Often the emerging technology is both actual technology and newer design paradigms. In the case of Empire State Building, one of the biggest energy savers is the adoption of wide-diameter air conditioning pipes. In the past, when energy usage was not a concern, buildings often used 4-inch pipes for air-conditioning. In the 2010 renovation, the piping system was converted to a 12-inch system. Since friction is a function of cross area, the wider pipes lower friction by 9 times. This significantly reduced the energy required to move cold air around the buildings.
More importantly, as the air conditioning system was scheduled to be replaced anyway, the pipe widening has only a small incremental cost, pushing the achieved rate of return to very respectable levels. Coinciding green implementation with existing building maintenance seems to be the most financial rewarding strategy. Since buildings typically have maintenance schedules of between five to ten years, depending on the asset type, this strategy is also capable of significantly reducing city-wide carbon footprint over a decade or so.
Some new products also come not from technological breakthrough, but a redesign of existing technology. Solar panels, for example, look and feel like part of a satellite because the panels were originally designed for satellites. Thus, most people who installed solar panels in the last ten years have to also install roof top mounts to hold the solar panels in place. Additionally, they will also have to accept the aesthetics of having parts of a satellite on their roof top. This is partially the reason why solar panel installation is still a relatively small movement, even though the financial payback period has dropped to five years.
In 2016, however, Tesla announced a new line of roof tiles that incorporated solar panels into the items. By using tempered glass as the material, Tesla’s tiles allow sun to shine through them to reach the solar panels, even as tiles look opaque from the ground floor. Tempered glass is also stronger than traditional tiles, and this improves the longevity of the tile system. In addition, homes that choose to use tempered glass do not need to install the traditional panel mounts, saving installation and material cost. Thus, if this line of product proves to be as good as advertised, it is imaginable that within one tile generation (roughly 15 years), all US homes could have solar panels installed in their roofs.
The real-estate industry can go green over the next decade, as many technologies and design principles are maturing overseas. Often, financial incentives are already in place, but progress will depend on whether landlords and other investors are aware of the strategies.
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