Reality of green residences - Is the premium justified?

Global Warming is a major environmental concern today and green buildingis one of the measures to reduce this affect. These structures utilize essential building resources such as energy, water, land and construction material in a way that generates less waste and in turn helps in making the life of residents healthier when compared to the non-green structures. This is achieved by adopting better design, operation, maintenance, construction and deconstruction strategies.Green buildings are promoted in India by agencies like IGBC and TERI. They utilize the ratings by LEED-India (Leadership in Environmental and Energy Designs) and GRIHA (Green Rating for Integrated Habitat Assessment) to measure sustainable design practices in constructed buildings and award a rating in accordance to the range to which they satisfy the specified parameters. But in general, the awareness about such green buildings or residences in India is scarce and many experts even question their financial credibility and limit their availability only to the elite class. This is all but a myth as research has proved that a minimal increase in the upfront investment (about 2- 10%) in the construction costs of green homes can yield a savings of over 20% of total investment costs in the time cycle. When it comes to their affordability then you would be surprised to know that there have been many affordable housing launches in this segment. The latest one being new launch by Yamuna Expressway Industrial Development Authority in Sector 22D. The apartment here would range from Rs. 7.5 lakh for 1 BHK to Rs 31 lakh for 2BHK. Neo Town by Patel Reality is another affordable range of green residences, situated in the prominent Electronics City, Bangalore and offered at a launch price of Rs 3100 per sq. ft.The township is pre-certified by IGBC. It comes integrated with rain water harvesting systems, sewage treatment plant, solar water heating, solid-waste management plant and an in house nursery. The township would support almost 90 percent of its water needs and would depend on Bescom only for 30 percent of their total power requirement.Let us dwell more on the financial aspects of Green Residences in India.•    At present, there are 200-plus LEED rated green buildings in India, about 40 IGBC green factory buildings and almost 250 IGBC rated green homes. This covers 2 billion sq. feet of land space and the green brigade targets a 10 billion sq. ft. mark by 2022. According to LEED reports (compiled in 2009) green residences cost an additional premium ranging from 2-10 percent but offers 10 times the costs undertaken in their entire life cycle. •    Construction costs typically increase by 5- 10 percent for a platinum rated (highest rating) house, while for gold and silver rated homes it could be 3- 8 percent. The premium that one needs to pay for houses is recovered in around 3-5 years due to low maintenance and operation costs.•    According to recent LEED reports green homes witnesses a reduction in water consumption by 20-30 %, reduction in waste generation of about 50 % and carbon saving of about 35 %. This typically saves the average monthly expense of a normal family on energy resources (water & electricity) by almost 20 -35 percent.The present scene in IndiaDespite several benefits and cost gains by green residences, I would say that the market in the country is still at a nascent stage but definitely moving in a positive direction. Should you put your money in green projects?If you are an end user looking for a property then I would suggest you to go for such residences as they would guarantee a comparatively healthy lifestyle to you and your dear ones even if you have to pay a premium for such houses. For investors this might not be key criteria due to lack of options in this category.