High Growth in the Green Residential Building Sector Forcast

Several market research studies released over the past four months forecast high growth in the green building sector over the next three to five years. The latest study from venture capital firm Good Energies Inc. finds that about half of non-residential building stock will be “green” buildings by 2015, up from about 15 percent today, reports the Wall Street Journal. Driving the trend is the realization by many developers that costs are not as high as expected to implement green practices, according to a new study.

Greg Kats, senior director and director of climate change for Good Energies, told the Wall Street Journal he used the U.S. Green Building Council’s Leadership in Energy Environmental Design (LEED) standards to define what qualified for a green building in the study. Kats also noted that LEED certification wasn’t required, but the building had to meet LEED standards.

Kats said in the article that non-residential green building costs about 2 percent more than a traditional comparable building, although the public thinks on average that the premium is 17 percent, based on a 2007 survey by the World Business Council, reports the Wall Street Journal

Kats also said payback time for a green building is about three to four years, and over a 20-year period, the payback is four to six times the investment cost.

In November, Kats released the results of his two-year study in a book called “Greening Our Built World.”

Similarly, a report released in November last year from KMPG finds that energy consumption in buildings can be cut by 30 to 50 percent and still produce a positive return on investments.

In October 2009, McGraw-Hill Construction released a study that projects that the share of green building in the retrofit market could grow to 20 to 30 percent in the next five years, totaling between $10.1 billion to $15.1 billion, reports the Wall Street Journal.

Green building currently accounts for five to nine percent of the retrofit and renovation market, which equates to a $2 billion to $4 billion marketplace for major projects, according to the study.

Another recent study also indicates high growth in the green building sector. According to research from Zpryme, the combined commercial and residential green building markets should grow nearly 146 percent from 2009 to 2013, representing a $128.6 billion market by 2013. The study also reveals that the commercial/institutional market for green building could grow 137 percent from 2009 to 2013, from $26.5 billion to $63 billion

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