Get the maximum ROI from green buildings

Willy Wilson
Investing in green properties might just be the way to go in 2010.
While it may be too early to predict the trend, a panel of the industry’s movers and shakers is certain that with the Malaysian government’s GBI incentives and proposed Feed-in Tariff (FIT) stimulus, sustainable properties are the blue-chip investments this year.
Star Property sits down with a panel of industry experts at Desa Sri Hartamas to discuss the issue. The panel includes: • BK Sinha, project manager director of C2C • Y.K. Wong, director of Rehda Institute • Dev Kumar Nair, director of Khong & Jaafar (property valuers) • Yang Sean Fook, principal of GE Consultant • Kenny Chong, business development manager of Kumpulan Ikram and • Lincoln Lee, executive director of Lucas Works
Why is going green a good investment?“When we take into account the ROI in the long run, we know green properties are much more economical,” says Lincoln Lee.
Malaysia Energy Center is designed to be a super-energy-efficient building using only 286 kWh/day.
“As an industry that allegedly consumes more than two-thirds of the world’s energy, we should look into the best possible solution for our industry,” adds Lee, whose Smart & Cool home technology is GBI-qualified.
The Smart & Cool technology is able to reduce the temperature inside a house. Although it is revolutionary, Lee acknowledges that its high cost is a big turnoff to both developers and consumers. However, he is quick to point out that the real issue is not the cost; instead, it is the lack of awareness.
Lee is currently in talks with Kumpulan Ikram Sdn Bhd to launch a real estate project that uses Smart & Cool tech. He explains that a green project of 50 houses or more will cost 2% to 3% more than a conventional housing project.
“The good news is, the Government has our backs. GBI incentives and the proposed FIT mechanism will generate the maximum ROI for green properties,” says Dev Kumar, who also suggests that property owners invest in the Solar Photovoltaic (PV) system (cells that convert solar radiation into direct current electricity).
Kenny Chong of Kumpulan Ikram nods in approval and states that a green building will have higher market value in 2011.
“Malaysia seems to be well on its way to becoming one of the few Asian countries that practices the FIT system,” says BK Sinha.
The FIT proposal will be introduced in Parliament in 2010 and is set to become a part of Malaysia's 10th energy plan for 2011 to 2015. If the Parliament passes the proposal, the tariffs will take effect early 2011.
Get FITThe FIT mechanism is an incentive structure plan. Owners of the Solar Photovoltaic (PV) system are connected to the grid and are allowed to receive monthly revenue from utility companies at above-market rates set by the Government.
FIT is seen as the most effective mechanism to aggressively drive renewable energy development. This principle has been adopted in more than 40 countries worldwide, and Malaysia is set to join the bandwagon.
The Malaysian government has set medium- and long-term objectives for renewable energy growth under the proposed Renewable Energy Policy and Action Plan (REAP). Datuk Dr. Halim Man, the Secretary-General of the Ministry of Energy, Green Technology and Water wrote in The Star last December, that PV is estimated to have a cumulative capacity of 55MW in 2015.
It is predicted that solar energy will surpass all other forms of renewable energies in Malaysia after 2020.
The Government has played an instrumental role in promoting the use of renewable energy over the past decade. It is reported that the Government has successfully attracted more than US$3 billion in Foreign Direct Investment in the solar PV manufacturing industry, and is working towards becoming a solar PV manufacturing hub.
“This trend should further encourage the use of sustainable energy in the country,” says Lee.
ROI details of a conventional house (left) and a green house (right).Source: Smart & Cool Homes Sdn Bhd