How Solar can revolutionize the Real estate market?

The integration of Solar into the real estate market offers many benefits.

The Pandemic has changed a lot of things such as customer behavior, buying preferences, types of properties, budget, security, and stability.

All these factors are reflected in the real estate market too.

Although, it is evolving according to the customers’ preferences.

But with solar, real estate can evolve better.

Real estate market in India

In India, it is the second largest employment provider after agriculture.

The real estate market contributes 6-7% to India’s GDP.

And it is expected that the Indian real estate market will reach US $ 1 trillion by 2030.

And the growth trajectory can be shown as follows:

The demand for residential properties has increased due to urbanization and an increase in disposable income.

The need for a suitable abode has increased due to the changing working style.

Now people are working from home.

The families are looking for houses that can meet both requirements.

This is the right time for the developers to understand this and fulfill their needs.

Many top developers have understood the need of the buyers.

And they are coming up with customized solutions such as:

Studio apartments, Apartments, Duplex, Independent Villas.

And all of these are full of amenities.

We can also classify residential homes in terms of price like:

• Under 40 lakhs
• Mid-range: 40 lakhs to 80 lakhs
• Premium: 80 lakhs to 1.25 crore
• Luxury: Above 1.25 crores

Let me name a few top real estate developers in India:

• Godrej Properties
• Lodha Group
• Mahindra Lifespace developers
• Kolte Patil Developers
• DLF
• Emaar India
• Tata Value Homes
• Indiabulls Infra-estate
• Sobha Limited

Although real estate development is throughout India.

But there are certain states and regions where we see more concentration than others.

These real estate clusters regions are:

• Mumbai
• Delhi/NCR
• Bengaluru
• Pune
• Chennai
• Hyderabad
• Goa
• Dehradun
• Lucknow

Concerns for climate and nature

The recent online trends show that Indians are concerned about their environment.

People are aware that how human activities are impacting the environment and our earth.

Global warming and climate change are a result of this.

Deforestation and the use of fossil fuels have increased carbon emissions beyond the permissible limit.

Our earth is now becoming hotter than before.

And we are seeing the consequences of this such as:

• Melting of glaciers
• Droughts
• Floods
• And the migration of humans, animals, and birds.

People are looking for solutions to mitigate this effect.

And they are ready to invest in solutions that can mitigate this effect.

And Solar Electricity is one of the best options for generating power.

Real estate developers must integrate solar into their new upcoming projects.

This will offer many benefits to all.

Benefits of integrating solar into Real estate

It is a fact that solar electricity is environmentally friendly.

Real estate developers can create a sustainable solution for their users by integrating solar power systems into their upcoming projects.

This integration is beneficial to all (environment, project developers, and end users).

i) Solar helps in preserving the environment

Do you know?

A 5-kW solar power system can offset over 7 tonnes of CO₂ emissions from the air in 1 year.

Therefore, solar electricity helps in mitigating climate change and preserve the environment.

b) The project developers earn income by integrating Solar in Real-estate

The project developers can create voluntary carbon credits for developing sustainable solutions.

A carbon credit is a way of reducing greenhouse gas emissions in the atmosphere.

And developing solar solutions is one of them.

“1 carbon credit offset 1 tonne of carbon emissions from air”

And these voluntary carbon credits can be sold on a platform.

Recently, Indian Energy Exchange has formed a 100% wholly owned subsidiary to facilitate the trading of voluntary carbon credits.

The project developers can benefit from this platform and can earn income by selling carbon credits.

iii) Solar gives an attractive return on investment to the buyers

Finally, the end user which is the home buyers can benefit by using solar electricity.  When you are using solar, you are saving money by not paying it to the grid.

The more the grid price in your area, the more you save by using solar electricity.

If I take the average grid price in India, it is near Rs. 6.6 per unit.

And by analyzing the last 10-15 years’ data, it is growing at 8% annually.

This means, Rs. 6.6 on 1 unit today will cost you close to Rs. 45 in the 25^th year.

By using solar, you are saving more every year.

Also, solar electricity is smooth which makes your electrical appliances run quietly.

It protects from overheating of windings and motors of the devices. Hence, improves their useful lives.

And you save money on their maintenance too.

 So, solar is a win-win situation for all.

Quantifying the benefits

Assuming a project developer builds 1000 units on 10-acre land with integrated solar power systems.

Each unit is allotted 3 kW of power from solar.

This makes a 3 MW (3 kW x 1000 units) solar power system.

And this system size has the potential to mitigate over 4000 tonnes of CO₂ emissions (equivalent to 4000 carbon credits) in the air in 1 year.

Let us see the monetary benefits that a home buyer gets when using solar for running household appliances.

One unit is allotted a 3 kW solar power system.

How much a 3-kW solar power system generates per day in India?

India is a big country with an area of over 3.3 lakh km² with latitude from 8ᴼ4’ North to 37ᴼ6’ North.

The latitudes are the imaginary lines that tell how far (angular distance) is the particular location from the center of the equator.

The proximity of a location to the equator is an indication of good sunlight intensity.

Good sunlight means more power from solar panels.

India receives good sunlight throughout the year with an average Peak Sun Hours (PSH) of over 5.

This makes it an ideal destination for solar power.

A 3-kW solar power system in India can produce an average of 12 units in a day.

This makes it 4380 (365 x 12) units in 1 year.

Money saved: Rs. 6.6 per unit x 4380 units = Rs. 28,908

Price of a 3-kW solar power system in India:

Yes, the price of a solar power system depends on many factors such as:

• Brand of solar panels
• Solar Panel technology
• Solar inverter technology
• Type of roof
• Installation cost
• Labor costs and more

The average cost of a 3-kW solar power system is between 180,000 to 2,00,000.

I’m taking it the middle value of Rs. 1,90,000/-

This makes our calculations easier.

The payback of solar power system

The solar power system offers a fast payback.

The 3-kW solar power system pays back the money invested in less than 7 years.

Payback (years) = Cost of the system/Money saved every year

= Rs. 1,90,000/Rs. 28,908

Payback = 6.6 years

Thereafter, solar electricity is free to the user.

Although the payback does not consider the time value of money.

When we consider the time value of money.

The financial metrics would look something shown below:

• Net Present Value: Rs. 2,79,431
• Internal Rate of Return: 15.79%
• Cost of Solar electricity: Rs. 2.93 per unit
• Net savings in 25 years is over Rs. 11,00,000/-

What do builders need to integrate solar into real-estate?

Understand the need and design the complete solar power system considering the future demand of the users and also the present urgency of climate change and global warming.

• The roof of the project needs to be designed in a way that it can support the solar panels.
• Choosing the right direction for the solar panels so that they can produce optimum power for the residents.
• Taking care of the annual maintenance of the solar projects.
• Safety of the residents: Take measures to keep residents away from the solar power system.

Let us see how fast the real estate developers adopt solar and revolutionize the whole Indian real estate market.

Are you looking for a solar power system for your home?

Not sure about the size, design, and financial feasibility of your new solar power system?

Try my solar feasibility spreadsheet NOW!

Or

If you want to start in the solar business then try my Online Solar Course.

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