EFFECT OF SOLAR ENERGY IN REAL ESTATE DEVELOPMENT
Nigeria as a whole has an installed electric generating capacity of 12,522 MW but generates little above 4,000MW which is greatly insufficient for a country of almost 200 million inhabitants. According to World Energy Council through Enerdata the global average electricity consumption for households with electricity was roughly 3,500 kWh in 2010, this would mean the country would need 177,625MW of electricity. This pneumonia has made residents in the country to find alternative source of power generation for their consumption. These alternative sources are two, mainly; the Diesel or petrol generator popularly called by the latter name generator and the solar power.
Solar energy is radiant light and heat from the Sun that is harnessed using a range of ever-evolving technologies such as solar heating, photovoltaics, solar thermal energy, solar architecture, and solar power. Solar energy is an inexhaustible source of energy known to humankind, with an expected life span of at least 5 billion years. The energy from sunlight, which is intermittent and renewable, can be stored in batteries, as hydrogen, or in many other ways and converted to electricity. Then, why is all this important? For environmentalists, solar power is a safe alternative which can replace current fossil fuels like coal and gas for generation of electricity that produce air, water, noise and land pollution.
For real estate consumers and real estate practitioners, solar energy produces constant electricity and further offers the opportunity to lower operating expenses and boost revenue by reducing or even eliminating utility expenditures in houses.
In most developed countries, the diesel and petrol generators are used as backup or emergency power when the national grid fails or during power outage the case is reversed for the sake of most Nigerian households, businesses and corporations. Their primary source of power comes from the diesel or petrol generator meanwhile the solar energy sector is not being fully exploited. Why is this the norm? Some think about it as the case of lack of education in the sense that they are not duly aware of the pros and effectiveness derived from the usage and some also view the price of purchase and installation as well as the routine and correctional maintenance as hindrance. Regardless of this, the solar energy is becoming increasingly more prevalent between residential and commercial real estate professionals.
As a developer, when a development can boost of solar energy infrastructure, you can appeal to an untapped demographic number of clients and “environmental cautionists” who are willing to pay more for clean energy. At the same time, you can protect tenants and residents by hedging against volatile energy markets from tariff hikes and over-billing from the various electricity companies.
The most attractive benefit of solar energy for real estate projects has been removing tenants and residents from the volatile energy markets (especially with the estimated billing system which has refunded to be resolved by DISCOs in Nigeria), which see costs varying regularly while reacting to political pressures or demographic restraints. In major markets. This can be used to retain tenants, raise rents, and even cut prices when business owners and homeowners see their utility costs declining. For those investing in real estate, or buying a home, this brings exponential returns, especially with Appraisers or Valuers (Estate Surveyors & Valuers) taking note of the added value of solar-fitted homes.
Another important benefit of using solar is that recent studies show there is often zero opportunity cost. For example, panels are most often installed in vacant fields, on the tops of buildings, or in other areas that are not in use. This makes the barriers small to get started, because the space is usually present and small business owners and homeowners can start small if they would rather.
In all, the benefits of a solar energy powered home are long time and enormous. It is what real estate practitioners and home owners should focus on as a key means of energy supply in housing. The Federal and state Governments should also create policies around this means of energy supply to ensure it is regulated to acceptable standard, while ensuring the tax burden is not overwhelming to deter the users or reverse the gain that have been made in this energy sub-sector which is mostly private sector driven for now.
Author: Agbola, Daniel is an aspiring real estate practitioner with specializing interest in valuation and property development. He is a recent graduate of Estate Management from the Federal University of Technology, Akure. He likes listening to world news.