Energy-efficient buildings – a business case for India? – An analysis of incremental costs for four building projects of the Energy-Efficient Homes Programme

The residential building sector is one of the largest consumers of electricity in India. Continuous urbanisation and the growth of population result in increasing power consumption in buildings. Thus, while experts express the huge potential for energy conservations in this sector, the belief still predominates among stakeholders that energy-efficient buildings are more expensive than conventional buildings, which adversely affects the “greening” of the building sector. A new comprehensive empirical study conducted by adelphi and the Indian Energy and Resources Institute (TERI) finds evidence for the opposite being the case. The study “Energy-efficient buildings – a business case for India?” focusses on the comparison of costs of both energy-efficient and conventional residential multiple-family dwellings in India. The study considers not only the construction costs, but also the costs of the entire life cycle of buildings. The empirical results demonstrate strikingly that (1) construction costs for energy-efficient buildings (improved insulation, reflective paints on the roof etc.) are only marginally higher than those for conventional buildings. (2) The implementation of active energy conservation measures such as air conditioners and solar water heaters are found to be relatively expensive. (3) However, both, costs for passive and active measures pay themselves off very soon (less than three years for all examined units). Overall, the green buildings analysed not only achieve energy savings of up to 36 percent compared to the reference buildings; also, their life-cycle costs are substantially lower than those of conventional buildings.